Interview: Malaysia Healthcare Travel Council CEO Sherene Azli on the past, present and future of medical tourism in Malaysia.
The Malaysia Healthcare Travel Council (MHTC), is an agency under the Ministry of Health Malaysia, tasked to raise Malaysia’s profile as the world’s top-of-mind destination for world class healthcare services. Established in 2009, MHTC functions to facilitate the overall development of the Malaysian healthcare travel industry, by coordinating industry collaborations and building valuable public-private partnerships, at home and abroad.
We asked MHTC CEO Sherene Azli to tell us more about the council.
If you look into the history of Malaysia in terms of the medical tourism market, we were latecomers into the game. Penang started a bit earlier, but 20 or 30 years ago we were well behind natural destinations like Singapore and Thailand. So, when we wanted to get onto the bandwagon of medical tourism, one of the key things we recognised is that we need to get a boost in order to be competitive in the industry. The private sector requested the ministry of health to start looking into medical tourism as a potential economic growth area. In 2009, they set up the Malaysia Healthcare Travel Council under the Ministry of Health, with a mandate to enable the industry. In 2011, we moved forward with two mandates. One was to promote medical tourism for the country, and the second concerns facilitation for the industry when it comes to enabling players to come on board, then creation of enablers like tax allowances, visas, etc. Those were the two main thrusts: promotion and facilitation. Since then, we started promoting into all the different parts of the world. Then 2015 was when I came on board. 2011-2015 was the first phase, during which the council operated very much like a government agency, rather than being a marketing-driven organisation. When I came in, the mandate was to turn around MHTC into a fully-fledged marketing-driven organisation, and in a way running it like a private sector organisation. When I came in, I saw gaps in things like market intelligence, and how to look into the ROIs of going into markets, and so on. We also began engaging more closely with the private sector in terms of looking at what exactly they want to do, versus what we think they should do. That public-private partnership has strengthened over the past few years, and the mandate from the Ministry of Health is that even though we are promoting medical travel, we must make sure that we protect the quality delivery of the healthcare services to the medical travellers, putting the patients’ safety as the number one priority. It’s not about the commercialisation. This is why the MHTC falls under the Ministry of Health and not the Ministry of Tourism. If it was part of tourism, it would be more tourism focussed, and may be over-commercialising the industry. In the past three years, in our experience “growing up”, we found that it turned out to be a strong competitive edge for Malaysia. The fact that people know we are under the Minister of Health, and I report directly to him, means he is able to oversee the patients’ interests and the quality delivery of healthcare first and foremost. Another thing that contributed to our competitive edge in the market is the fact that we have the immediate access to our specialists and our hospitals, unlike in other countries, where you may have to book a long time ahead. But the selling proposition that is strongest on top of the quality is, I believe, the affordability. Because the market is heavily regulated, and the fact that under the Ministry of Health, we actually do have fee schedules and capping, our doctors cannot overcharge patients. This is especially comforting for patients coming from abroad, knowing we have world class quality, immediate accessibility, and we are very affordable. Looking into this region, the strongest players are Malaysia, Thailand, and historically, Singapore. Singapore have priced themselves out, as they are three to four times more expensive than Malaysia. Thailand is seventy percent higher or even double our prices.
The fact that we have fee capping does help to moderate all prices and this has been key in bringing Malaysia up to the level it is now. The fact that we are under the Ministry of Health and that through the public sector we are enabling the private sector gives trust to the medical travellers. They can come in to Malaysia knowing that the quality is world class because. All members of the council need to meet certain criteria before they can officially join the MHTC. The main criterion is that of having international accreditation. There are about 250 private facilities in Malaysia, 90 of which are hospitals, while the rest are clinics and so on. But how do you differentiate among them? How do you know that they are good enough for foreign patients? How do you know that they can deliver the world class services? The first filter is that they need to have international accreditation. You may host a huge number of medical travellers but if you don’t have international accreditation we won’t admit you as a member.
Are just hospitals and clinics members?
No. We are also now looking at associate members such as travel agents or even airlines; all the players along the value chain of delivering end-to-end care to medical travellers. We also provide concierge services. The MHTC even has lounge at Kuala Lumpur international airport, at gate eight in the arrivals area. Outside the lounge, we have an ambulance bay. The lounge is very comfortable with settees and recliners for the patients. We are also able to welcome patients at the aero bridge and take them through the fast track for immigration, so it gives the patients peace of mind in knowing that if they need this kind of assistance it is available. For those who do not need the concierge services, we make sure that they receive the right level of standards, especially for those needing translators for example. That’s why we have partnerships with travel agents and facilitators in the region. We are seeing growing markets from China and their culture is very different. So, it’s not just about being able to communicate, but it is also important to understand their sensitivities and their culture, and that is something that we enable.
So, you’re really talking about an end to end solution.
Exactly, from the minute they land at KLIA and right throughout all the processes, finally flying back home.
How do you help establishments grow and promote themselves abroad?
We give investment tax allowances for the enhancement or renovation of hospitals, or the building of new hospitals catering for medical tourists. We also look into giving tax breaks for them when they market abroad. We collaborate with a number of agencies in enabling the facilities to get to sort of “booster shot” and to expedite them into the business a bit faster.
How are your KPI’s?
In terms of performance, from where we started in 2011 ‘till now, we have been seeing an average annual growth of about 14% to 16% every year. It has always been double-digit growth… and from 2015 to 2016 we actually saw 23%. ‘16 to ‘17 was about 16% and we are hoping that we will exceed 20% this year as well. Compared to “general” tourism, our growth rate is much higher, and in terms of spending, a medical tourist spends about 3 to 4 times more than a normal tourist. Then they also bring their family members along, which we don’t take into account in the calculation, so technically, the spill-over effect is really huge. Last year, we recorded about 1.3 billion Ringgit in medical revenue alone. So, with the multiplier effect, plus wellness, plus dental, which are not included in that 1.3 billion, this will contribute about 4 to 5 billion Ringgit to Malaysia’s GDP. If we do as well in terms of driving growth as we expect to, we project about 10 billion Ringgit contribution to the economy by 2020.
What are your main source markets?
The number one market is Indonesia which accounts for 50% to 60% of our arrivals. Last year we exceeded our target of 1 million arrivals and close to 60% are still Indonesians as our main source country, but we are seeing growth from other ASEAN countries like Myanmar and Vietnam; so much so that we have started opening offices in these two countries. We saw double-digit growth from China every year for the past two years. China is growing – especially for fertility, and then we have India. So if you look at 690 million population for southeast Asia and then you add 1.2 billion in China and 1.4 billion in India we have around half the world’s population, so we don’t need to look much further.
Why is ITB Berlin important for you then?
For us, it is important to go to ITB Berlin, as Malaysia is Official Partner Country, and because branding Malaysia strongly and creating awareness about Malaysia in a global sense is very important.
You are strongly promoting Malaysia as the “fertility hub of Asia” and “the cardiology hub of Asia”. Why fertility?
Malaysia currently has among the highest success rates in the world for IVF. The world average is about 50 to 55% clinical success rate, while Malaysia on average records about 66% and we have centres exceeding 80%; so, we started positioning Malaysia as a fertility hub. Two years ago, China lifted the one-child policy, so they have about 90 million couples looking to have more children, and out of that 19 million over half of them are over 40… so they need help. If 40 million couples need help, and if Malaysia can serve just 0.1% of them, we would be very happy. If there was one percent, our hospitals wouldn’t have capacity for them. The biggest spenders when it comes to medical tourism are still also the Chinese. Our medical travellers actually spend more than four times more than the normal tourist, and for one ringgit spent in the hospital, three or four ringgits are spent in travel accommodation, shopping and so on… so everything goes to tourism. An average Chinese tourist spends about 500 ringgits per day in Malaysia, according to the most recent studies I have seen. We did a study on our Chinese patients, and they spent 2,700 ringgits per day – and that’s excluding shopping, because we don’t have data for shopping. With this, we can see how much medical tourism, if done right, would be able to drive the tourism growth in totality.
Is there a longer-term vision, looking 5 to 10 years out?
We are looking at industry sustainability, meaning that it’s not just about this year or about 2020, it’s about 2030 and beyond. Consequently, one of the projects we’re doing now is for flagship medical tourism hospitals. If you look into Singapore people know Mount Elizabeth, but in Malaysia, when we talk about medical tourism, we have segmented players everywhere. Penang is the main one, but which hospital in Penang? You have many hospitals. We do not have a flagship star hospital that is really driving medical tourism aggressively and holistically. So, we plan to enable perhaps 3 to 5 existing hospitals to grow as star medical tourism hospitals, or flagship hospitals, and we will create a platform to boost their promotion, like a booster injection. We may even look at creating a medical trade zone within each hospital. These developments have already been approved and we are already rolling out about 20% of the total project. This is a journey of about 3 to 5 years, so once these medical tourism hospitals are established, and the brand-name is established globally, then they can start their own trajectory of driving medical tourism on their own without needing the assistance of the government moving forward.
We have other projects when it comes to industry sustainability. We are looking for example into how to further develop cardiology as a hub, or fertility as a hub, and that’s an enabler. But it’s not just about medical tourism, it’s about developing the industry within Malaysia. You have to look at the whole ecosystem before you can actually market abroad, so we are looking at all these niche centres of excellence. So, when people around the world know about the success of fertility clinics in Malaysia, naturally, medical travellers will be attracted to it. We are looking into organising an industry roundtable looking into training more embryologists, and enabling the latest technologies for IVF, so the industry can continue growing and be sustainable for the long term.
Looking into the future, we also have to continue to keep a close eye on cost management, because we are still very competitive, and if we lose that competitiveness then it’s going to be hard for us to maintain the industry growth for the next five or ten years.
Just to recap, but I know you spoke about this in the first part of the conversation. What would you say are the three key selling points or USP’s of medical tourism in Malaysia?
The first is vital, because without it no one would want to come to Malaysia, and that is the quality. If you don’t have the quality in terms of outcomes for example in terms of IVF; if you don’t have the success rate, people will not come. Malaysia is rated as a country with amongst the best health care in the world. For three years in a row, International Living magazine in the United States even rated Malaysia as the country with the best healthcare quality, accessibility affordability in the world – in 2015, ‘16 and ‘17. The second USP is about immediate accessibility. You don’t have to wait. In places like the UK or Australia you have to wait a long time to get to see a specialist, but in Malaysia you can get real-time access to our specialists. And our most important USP, as a complement to the other two, is actually the affordability. Our prices compared to other countries are about 1/3 or at the most half the price of Thailand. We also don’t differentiate in tariffs between foreigners and local patients. In other countries, foreigners are charged double or triple what the locals are charged.