Demand and Supply of Medical Tourism in Malaysia

The practice of people traveling to another country to receive medical treatment at lower prices and high-quality medical facilities is referred to as Medical Tourism (Meštrović,2018). Individuals have become accustomed to traveling abroad for medical treatment (Deepa, 2020). In the graph below, 25 percent of individuals prefer to seek medical care within their own country, but 35 percent prefer to seek medical treatment overseas, while the remaining 40 percent are classified as emergency cases (Deepa, 2020). In Asia, Malaysia is considered to be among the best and most attractive medical tourism destinations (Ayob&Masron, 2014).

Essay Title: Demand and Supply of Medical Tourism in Malaysia
Course Name (Course Code): Introduction to Microeconomics (ECO151)
Program: American University Program
Section: B
Date of Submission: 9th October 2020

Introduction
The idea of people traveling out of the country to get medical treatment to seek high-
quality medical facilities, hospital treatment at lower prices is referred to as Medical Tourism
(Meštrović,2018). Over time, individuals have grown familiar with the concept of traveling
abroad to receive medical treatment (Deepa, 2020). As seen in the graph below, about 25% of
individuals are seeking medical care in their own country, while 35% of the population prefers to
seek medical treatment abroad and the remaining 40% are classified under emergency cases
(Deepa, 2020). Due to the significant growth in the popularity of the medical tourism industry, it
has caught the attention of economists, researchers, and the media. According to the Global
Medical Tourism Market Statistics 2019, the worldwide medical tourism marketplace size is
anticipated to attain USD 207 billion by 2027, at a compound annual growth rate (CAGR) of
21.2%. Due to this fact, many countries are now focused on integrating medical tourism as part
of their own economy, realizing the strong economic benefits it brings.

South Korea
One of the upcoming destinations for medical tourism is Seoul, the capital of South
Korea. As per the Korea Tourism Organization's "2017 overview on Korean clinical and medical
tourism," Korea was ranked third in the nation after the United States and Germany as the
preferred destination for medical tourism (Episkopos,2020). As indicated by the Ministry of
Health and Welfare, South Korea spends $1 billion a year on the development of its medical
tourism industry. To date, Korea boasts 1,709 enlisted clinics/facilities and 1,413 authorized
private organizations that actively participate in attracting medical tourists (Episkopos,2020).
Even though Korea is only known for cosmetic and plastic surgeries among international
patients, it has developed and expanded its medical services to other treatments as well like
cancer and medical check-ups (Arcodia,2019). South Korea is also home to many globally
acclaimed plastic surgery clinics which explains why they have the highest liver transplant
success rate (96%) in the world and they are also set to surpass the U.S. in cardiovascular and
spinal treatments (South Korea,1970). Along with its lower-cost care and excellent facilities,
South Korea has utilized its qualities in high innovation to turn into a force to be reckoned
alongside the best countries in the medical tourism industry.

India
Recently, India has emerged as one of the most prominent destinations in the world to
receive medical care. India's medical tourism could develop up to 200% by 2020, hitting $9
billion, as indicated by the Ministry of Tourism figures (Suri,2019). The nation promotes
progressed facilities, talented specialists, and conventional practices, for example, yoga and
Ayurveda (A pseudoscientific medical system) to provide professional treatment (Suri,2019). In
2015, India’s medical industry was estimated to be worth $3 billion and it was ranked as the third
most mainstream destination for medical tourism (Suri,2019). Indian specialists have gained
popularity due to their top-notch medical training that causes them to be the cream of the crop.
Many medical tourists come to India specifically for heart medical procedures, ophthalmology,
and pathology as it is not provided in many other countries in the world. India also has the most
lenient guidelines on fertility treatment (permitting medicines for ladies as long as they are below
55 years old) to treat them (Bhattacharyya, 2020). The majority of patients that have undergone
medical care in India strongly agree that India has qualified clinical experts and affordable and
effective treatment fees (De Arellano, 2007). The government of India values its medical tourism
as a brand-new and vital component of its financial system that may raise and further develop
India’s $17 billion-a-year healthcare enterprise by 13% as compared to previous years (De
Arellano, 2007). India’s medical industry has always been widely regarded as one of the best in
the world and with the advancement of technology, the Indian government hopes to fully utilize
its medical resources to further improve its economy.

Brazil
According to the World Health Organization, Brazil has the best medical care system in
Latin America and ranks alongside the other top nations in the medical tourism industry.
Recently, Brazil has picked up a reputation for its cosmetic specialists and plastic surgeries,
allowing it to become a top clinical destination for medical tourism (Edmonds,2011). Brazil is
considered to be a pioneer in the field of plastic surgeries with many local plastic specialists
having remarkable success with their patient’s surgeries (Edmonds,2011). Not to mention, Brazil
has many qualities that appeal to a tourist such as the quality and the reasonable prices of their
medical services, fascinating culture, extraordinary food, and amazing sceneries. Brazil has been
formed into a focal point of greatness relating to medical care in Latin America, with many
significant medical experts using their facilities to conduct research (Edmonds,2011). Global
visitors are also attracted to Brazil due to its excellent treatment at low costs, impressively lower
compared to other European nations (Why more and more medical tourists are heading to
Brazil,2016). Treatment costs in Brazil are priced at a whopping 66% lesser compared to the
medical costs in the United States. The Brazilian government is also taking initiative to make
efforts to improve their medical system such as the dispatch of the Brazilian Association of
Medical Travel, a goal for regularization of a health visa for worldwide tourists looking for
clinical treatment. This organization substantially improves the framework of Brazil’s medical
tourism industry and also brings about many other benefits such as better public transport, new
streets, and even new lodgings (Why more and more medical tourists are heading to
Brazil,2016).

Importance of Medical Tourism to Malaysia.
Malaysia is recognized as one of the best medical tourism destinations by clinical tourists
from Australia, the United Kingdom, and Asia due to its advanced medical system that is
accompanied by a significantly cheaper cost for treatment (Why Malaysia is a Preferred
Destination,2017). Malaysia provides the best facilities for medical treatments such as
chemotherapy, heart surgery, and cancer treatment. In 2018, approximately 1.2 million people
traveled to Malaysia for clinical and healthcare purposes (Number of medical tourists,2020).
According to the graph below, it can be seen that medical tourism in Malaysia has only grown
since then because of the high-quality treatments and the satisfaction of the patients. The ETP
also labeled Malaysia's health care industry as one of the country's 12 National Key Economic
Areas (NKEAs) deemed to have the ability to spur growth (Ormond,2014). According to the
NKEA, medical tourism contributes significantly to the country’s economy and is meant to
generate MYR 9.6 billion in profit and MYR 4.3 billion in gross countrywide profits through
2020 (Ormond, 2014). In short, medical tourism is so vital to Malaysia as it creates foreign trade
profit, increases job opportunities, and broadens the nation's finances. (Why Malaysia is a
Preferred Destination,2017). Not only that, but medical tourism also improves tourism activities
in Malaysia, attracting thousands of tourists from other countries and thus, giving the nation a
monetary lift (Sarwar,2013). When a nation gives the best clinical treatment as well as obliges its
international tourists well, it will urge them to visit once more provision (Ormond,2014). The
Malaysian government greatly values its medical industry and is always working on improving
and providing the best medical care that it can.
Factors Affecting Demand of Medical Tourism in Malaysia
Over the last decade, the number of people who visit Malaysia for healthcare had been increasing
(Statista, 2020). The increase in the demand for their medical tourism offerings are due to a
number of factors.
First of all is the affordability of medical procedures in Malaysia. Medical tourists are able to
enjoy cost savings ranging from 40% to 80% depending on the procedure, this is in comparison
to treatments in the United States, Australia and Europe (Medical Tourism Malaysia, 2018).
Some of the uninsured individuals from the United States might not be able to afford expensive
medical treatment (Turner, 2007, as cited in Afthanorhan, Awang, Salleh, Ghazali & Rashid,
2018), therefore they would travel to developing countries like Malaysia to get treatments instead
due to the cheaper price of procedures (Karla & Milica, 2007, as cited by Afthanorhan et al,
2018). Apart from the availability and waiting time, Anvekar (2012) reported that cost of
treatment is the main reason for people travelling abroad (as cited by Afthanorhan et al, 2018).
However, the issue of follow-ups and post-surgery complications may lead to additional costs
being incurred. Some surgeries require at most a 24-month medical follow up with the surgeon

being present causing certain difficulties for patients. Due to this issue patients from abroad
might reconsider travelling all the way to Malaysia.
Besides that, political stability can also affect the demand for medical tourism. The Political
Stability and Absence of Violence/Terrorism measures the likelihood of political instability
and/or violence motivated by politics, which includes terrorism (Trading economics, 2020, p.2).
According to World Bank (2020), Malaysia has maintained a relatively stable political stability
index of 0.24 with -2.5 being weak and 2.5 being strong (as cited in The Global Economy, n.d.).
Signs of domestic turmoil can greatly hinder a traveler’s decision to visit a foreign country
(Ankomah & Crompton, 1990). Entering a country in amidst of any political crisis can be
dangerous and unnecessary but compared to countries like Bangladesh (-1.3) and Philippines (-
1.12), Malaysia is considered to be very safe to travel to with little to no risks ranking at 83
safest out of 195 countries (The Global Economy, n.d.). Thus, making it much more appealing
and assuring to visit for medical purpose alongside other factors.
In addition, attractive promotion of medical tourism in Malaysia through the use of the media
had too contributed to the increase in demand. There are many websites such as Medical
Tourism Malaysia, International Medical Travel Journal (IMTJ) and other private hospital
websites that allows people from all over the world to read up on what Malaysia’s healthcare
sector has to offer without being physically present. The abundance of information that can be
found on these websites are being promoted in a very attractive manner, with awards as proof of
excellence, corporate backgrounds, contact information and more. According to Ormond (2013),
before the Malaysian national government recognized the potential of medical tourism,
individual hospitals had already been promoting themselves as medical tourism destinations (as
cited by Moghavvemi et al, 2016). Since then, tourists visiting Malaysia for medical purposes
had been gradually increasing.
Finally, one of the most important factors affecting demand for Malaysia’s medical tourism is
the quality. Thanks to technological advancements in the healthcare industry, the face of medical
practices and saving lives had been transformed (Azimi, 2018). Medical Tourism Malaysia
(2018) reported that many of Malaysia’s private hospitals are accredited internationally by
renowned, gold-standard organizations such as the Malaysia Society for Quality in Health
(MSQH), Joint Commission International (JCI), Australian Council on Healthcare Standards
(ACHS) and more (p.8.). Doctors from Malaysia had also received extensive training from
reputable institutions from all over the world, making Malaysian healthcare professionals
culturally attentive and multi-lingual (p.9), allowing them to provide medical tourists with
exceptional services.

Factors Affecting Supply for Medical Tourism in Malaysia
In Asia, Malaysia is considered to be among the best and most attractive medical tourism
destinations (Ayob & Masron, 2014). Malaysia has always been considered to have a remarkable
healthcare system, winning multiple awards such as the “Medical Tourism Destination of the
Year”, “International Hospital of the Year”, “International Cosmetic Surgery Clinic of the Year”
and many more. (Malaysia Healthcare Travel Council, 2017). Malaysia’s success as one of
Asia’s leading medical tourism destinations can be attributed to various factors.
One of the main factors that affect the supply of medical tourism in Malaysia is the government’s
strong initiatives and support in developing the healthcare system. Malaysia’s government has
put alot of effort into promoting medical tourism due to the fall in revenue for many hospitals in
Malaysia. In 2009, the government established the Malaysia Health Travel Council (MHTC), an
agency with the sole purpose of spearheading the growth and development of the healthcare
industry. This agency is tasked with various jobs such as promoting health tourism in foreign
countries, provide suitable tax incentives, treatment packages, and many more. With the addition
of the government’s initiatives, the number of healthcare facilities that have registered for the
promotion of medical tourism has substantially increased from 35 hospitals in 2010 to 76
hospitals in 2017 (MHTC,2017). This committee has most definitely proven to be vital to the
medical tourism industry’s success in Malaysia today.
Another factor that significantly impacts the medical tourism in Malaysia is the service quality of
the hospitals available in the country. The quality of treatment plays an integral role in the
decision of many people when they choose to travel abroad for medical reasons. Malaysia’s
healthcare industry has well-trained medical experts, affordable transport, and medical costs, and
not to mention state-of-the-art medical facilities and technologies (Herberholz and Supakankunti,
2013). With these key factors, Malaysia has reportedly received more than a million healthcare
tourists who have provided more than RM1 billion in revenue for the industry in 2016. Another
standout factor of medical tourism in Malaysia is the customer service and support provided.
Hospitals in Malaysia consists of impressive support services, with doctors and nurses in
hospitals reported to be approachable, sincere, kind, and capable. In addition to that, Malaysia
boasts the ease of communication between foreign customers due to the presence of a multi-
lingual healthcare workforce. Amidst all these key factors, Malaysia continues to develop its
healthcare industry and strives to provide the best available service to any and all customers.
Last but not least, the destination image also plays an important part in affecting the supply of
medical tourism in Malaysia. A goal for most people who seek medical attention in foreign
countries is to simultaneously enjoy their vacation whilst they are receiving medical care. One
reason why Malaysia is such a popular medical tourism destination is the fact that it has various

tourist attractions coupled with low-cost accommodations and transportation (Khan & Alam,
2014). Malaysia also boasts a wide variety of entertainment factors such as tourist attractions,
shopping centers, holiday destinations, and many more. Due to these reasons, Malaysia has
gained alot of popularity as a famous medical tourism destination in Asia (MHTC, 2016).
To this very date, the Malaysian government is actively promoting medical tourism to other
countries with the aim of attracting more visitors. The government has realized the potential of
medical tourism in Malaysia alongside the economic benefits that it brings. With these
continuous efforts and development of technology, Malaysia can no doubt solidify its position
and status as one of Asia’s most famous medical tourism destination.
Future Trends for medical tourism in Malaysia
From 500,000 medical tourists in 2011 to over a million arrivals in 2018, Malaysia’s
revamped medical tourism industry is on the path to becoming of the world’s best. A large
portion of this success can be attributed to the formation of the Malaysian Travel Healthcare
Council (MHTC), an agency tasked with promoting medical tourism in Malaysia to international
countries. While the MHTC has done a splendid job so far, the future is looking even brighter
with the recent advancement in technology. We are currently amidst the Fourth Industrial
Revolution (IR 4.0), and the technological growth is set to positively affect the medical industry
in various ways. With new and improved technology, medical treatments can be made more
easily accessible and affordable. One particular method that IR 4.0 addresses relating to the
medical industry is the mobility of treatment. Medical treatment is made to not only be more
precise but also made to be brought faster to patients. The technology digitalizes healthcare,
making the idea of a “Smart Hospital” one step closer to reality. This technology scans patients’
health patterns and determines if a follow-up is required in hospitals. This benefits the patients
who have transportation issues or if they don’t have easily accessible healthcare.
The number of people who travel to Malaysia for healthcare purposes has been gradually
increasing over the past few years. Since 2015, there has been a continuous increase of about
10% each year (Statista, 2018). It is expected that these numbers will either continue increasing
or remain at elevated levels in the future due to a number of factors such as the solid support
from the government, advancements in treatment, minimal costs, and more. The growing
demand for advanced medical technology at affordable prices will likely lead to profitable
growth opportunities for the Malaysian market in the coming years (“Medical Tourism Market”,
2020). Therefore, we can conclude that the future of Malaysia’s medical tourism industry will
flourish.
Currently, the recent COVID-19 pandemic situation has threatened medical travel to
Malaysia. The gradual reopening of Malaysia for the purpose of inbound medical travel from
Indonesia is now being put to a halt due to the country's extended movement curbs, Malaysia’s
Penang state government had also announced that permissions to receive patients under medical

tourism were no longer being granted (International Medical Travel Journal [IMTJ], 2020).
Besides that, stringent SOP’s are to be adhered to by foreign patients, where very few hospitals
in Malaysia are ready to take in medical tourists. The National Security Council (NSC)
announced that patients from abroad are able to receive treatment in Malaysia, only after a
mandatory 2-week quarantine in the hospital room upon arrival. (IMTJ, 2020). Initially,
Malaysia had hoped to attract about 2 million medical tourists from abroad in 2020, however,
this had been dashed due to the pandemic and its travel restrictions (Puvanesway, 2020). There is
no doubt that this unexpected complication has led to a short-term decline in the demand for
medical tourism. Therefore, only after this situation is fully curbed can Malaysia get back to
providing medical tourists with its healthcare offerings.
Conclusion
Conclusively, this research-based essay has addressed many of the key questions relating
to recent developments in medical tourism in Malaysia. Through our research, we are now better
able to understand the importance of medical tourism, factors of medical tourism affecting the
demand and supply along with the future tends of medical tourism that brought to Malaysia. In
the context of our essay, we learnt that the countries which are popular for medical tourism are
South Korea, India, and Brazil because the medical tourism in these countries are affordable
treatment costs, and qualified clinical experts. Moreover, medical tourism is important to
Malaysia because it promotes Malaysia’s economic growth, such as boost Malaysia’s monetary,
provide employment opportunity to Malaysian, and promote the development of tourism
industry. Furthermore, the factors such as the affordability of medical procedures, stability of
politics, attractive promotion of medical tourism, and the quality of healthcare have affected our
demand of Malaysia’s medical tourism. Besides, as an Asia’s leading medical tourism
destinations, there are some main factors that affect the supply of medical tourism in Malaysia
are the strong measures, and support from our government in the development of the medical
system, the service quality of the hospitals available in Malaysia, and Malaysia’s image. Through
these factors, Malaysia’s medical tourism can develop smoothly and rapidly. In terms of future
trend, Industrial Revolution 4.0 plays an important role in medical tourism as IR 4.0 technologies
will improve medical accuracy and quality, change the patient's medical travel options and
methods, and increase expert mobility. Besides, based on past trends, the future of Malaysia's
medical tourism industry in long term trend will flourish as there are having a solid supply from
government and patient able to afford the price of medical tourism. Due to the COVID-19
pandemic situation nowadays, Malaysia’s government will no longer accept patients undergoing
medical tourism and foreign patients should comply with SOP. The unexpected complications
have led to a short-term decline in demand for medical tourism, but we are fully confident of
medical tourism in Malaysia will be advanced in the future because it has potential for a healthy
tourism. It hopes that Malaysia’s domestic economic and tourism grow rapidly in the future.

(3289 words)
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