In Focus
HEALTHCARE | Staff Reporter, Singapore

Singapore's staggering healthcare costs may be pushing medical tourists away

Malaysia and Thailand offer more cost-competitive alternatives.

The rising cost of healthcare in Singapore is increasingly diminishing the city’s attractiveness as a medical tourism hub with patients opting to turn to neighboring countries for their medical needs, according to RHB Research.

“As healthcare costs in neighbouring countries like Malaysia and Thailand are much lower, they have been attracting medical tourists from the region – thereby eating into Singapore's market share,” analyst Juliana Cai said in a report.

The strengthening of the Singapore Dollar against regional currencies also adds to the already expensive cost burden even as healthcare providers in other countries have been investing in the quality of their services whilst keeping costs down.

“Although there is no official data on the number of medical tourists, our channel checks with the companies under our coverage suggest that these numbers have been declining YoY. We believe this is a structural problem, and will continue to impact the Singapore players in the near term,” added Cai.

Also readSingapore needs to control inpatient costs amidst high medical inflation

The rising cost of healthcare is also hitting close to home as a growing number of Singaporeans also lament the staggering cost burden.

With healthcare insurance providers no longer offering integrated shield policies with 100% medical cost coverage, Cai expects the likelihood of softening demand for private healthcare which will consequently impact hospital bottomline.

“We think that some of the private healthcare providers‟ margins will be negatively impacted, with the local government keeping tabs on rising healthcare costs, due to public discontent,” she said.

A separate report by insurer Aon notes that medical inflation in Singapore is expected to hit 10% in 2019. The headline figure is above the global average of 8% as cancer and cardiovascular diseases continue to drive the cost of medical plans up. 

Beyond the threat of losing foreign patient, private hospitals like Raffles Medical, IHH Healthcare and Health Management International are in a capex-intensive expansion phase which is also set to weigh in on margins in FY19.

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