Bangkok // While oil prices are now on an upward trajectory the consequences of the recent plunge reach well beyond the petrochemicals industry.
The UAE economy is sufficiently robust to survive what seems to be a temporary downturn but the repercussions have been serious for a previously thriving industry in a country nearly 5,000 kilometre away.
Since the start of 2015, stocks in Thai hospitals have been on the slide. Bumrungrad Hospital, which is particularly popular with medical tourists from the Middle East, has seen its share price fall from Dh22 at the beginning of the year to Dh19 last week.
That came after Thailand’s healthcare shares surged by more than 800 per cent over the previous seven years according to Bloomberg. But the slump in oil prices has coincided with a 20 per cent drop in the number of patients from the UAE seeking treatment at Bumrungrad in the first quarter of 2015, a significant fall from five years previously.
According to a World Health Organisation study in 2010, the highest numbers of medical tourists who visited one of the five hospitals it surveyed in Thailand came from the UAE (21,568), followed by Bangladesh (8,443), the US (7,855) and Myanmar (7568).
Kasem Prunratanamala is the head of research at CIMB Securities in Bangkok and he sees a direct correlation between the recent fall in oil prices and a reduction in the numbers of patients travelling from the UAE to Bumrungrad.
“Weaker oil prices [will] negatively affect all Middle Eastern patients who come to Thailand for medical treatment although the Qatar and Kuwait economies seem to fare better this year than last year, relative to that of UAE and Oman which see their GDP slowing down more significantly,” he said.
However, Mr Prunratanamala does feel there are other factors, too, which might be deterring medical tourists from making the journey from the UAE to Thailand.
“One factor is the lower oil prices which in turn depress their [Middle East] economies but I think it could be due to a few factors such as the better healthcare infrastructure at home and new regulations on health insurance which have been gradually phased in since 2014.”
Of course, there are other hospitals in Thailand that cater to foreign patients. Bangkok Dusit Medical Services (BDMS), for instance, said late last year it was investing $122.7 million on new facilities at its Bangkok Hospital. BDMS is adding 300 beds to be reserved for overseas patients, of which 100 will be dedicated to customers from the Middle East and Myanmar with the balance for patients from western countries.
It is not only UAE medical tourism that has fallen. Russian visitor numbers fell sharply late last year, coinciding with the fall in the rouble, although increases in arrival numbers from other countries, along with a general rebound forecast for the tourism industry, are expected to offset downturns from individual markets, according to Oxford Business Group.
Until recently, the prospects for medical tourism were boosting the shares of the 15 health services providers listed on the Thai stock exchange, which were among the prime movers on the market’s index last year.
Shares gained 57.8 per cent in the 11 months to the end of November, according to exchange’s most recent report, outperforming the general tourism index which gained 31 per cent.
Sudi Narasimhan is the corporate director of marketing and business development at Bumrungrad Hospital. He acknowledges that falling oil prices have created a more hostile economic climate for his company.
“The slowdown driven by the big drop in the price of oil in the first half of this year has certainly been a headwind but, surprisingly, we continue to see a growth in patient numbers especially in countries that are adjacent to the GCC along with the GCC itself.”
While it is estimated by analysts that UAE nationals account for less than 20 per cent of the country’s approximately 9. 3 million population, Mr Narasimhan says expatriates account for a significant proportion of medical tourists to Bumrungrad.
“It should also be mentioned that we get many patients who are resident in the UAE but who are not nationals. They are also travelling here to receive care.”
There are currently 18 hospitals in Thailand accredited by the US-based Joint Commission International medical group but none enjoys quite such a stellar international reputation as Bumrungrad.
Situated in central Bangkok, it was founded in 1980 and has grown to become one of the most popular destinations in the world for medical tourists, with approximately a third of its overseas customers coming from the Arabian Gulf states, it says.
Patients Beyond Borders estimates that the global medical tourism industry is worth somewhere between US$45 billion and $72bn annually and recent research has suggested that figure is set to rise to a staggering $143.8bn a year by 2022. Thailand remains one of the most popular destinations and attracted 1.8 million international patients last year, according to Bloomberg.
The industry is driven by global fluctuations in the cost of medical procedures and for many patients, it is cheaper to fly overseas than it is to seek treatment in a local hospital. As a result an increasing number of medical tourists are travelling from comparatively wealthy countries to less developed places to take advantage of this price disparity.
Some 24.8 million general tourists visited Thailand in 2014 according to the United Nations World Tourism Organisation. Approximately 7 per cent of these people are likely to have travelled specifically to seek medical treatment and Mr Narasimhan says millions of patients from the Gulf region have checked in to Bumrungrad Hospital over the years.
“We have been looking after patients from the GCC and surrounding countries for nearly two decades now. Nearly 1.5 million patients from this region have come to the hospital since we began focusing on this segment in the early 2000’s [and] approximately half of this number is comprised by visitors from the UAE.”
In the past, cultural and linguistic barriers would have dissuaded all but the most adventurous of medical tourists from flying to foreign destinations for treatment. But in the modern era hospitals such as Bumrungrad are able to cater to international clientele with a bespoke service designed specifically for visitors from specific regions. Mr Narasimhan says.
“Geographically we are located just next to the Middle Eastern quarter within the city so it is very convenient for the patients and their family to stay nearby while receiving care here.
“Our team understands and has hands-on experience with the culture, including a team of Arabic-speaking doctors and cultural support officers. We also provide the appropriate cultural services such as a Halal kitchen and a prayer room.”
Sometimes medical tourists will be seeking to circumnavigate the laws in their country of residence, and this particularly applies to fertility treatment.
But according to Mr Narasimhan the majority of visitors from the UAE travel to Bumrungrad for a range of procedures.
“By volume, the largest specialities are gastroenterology, health screening, paediatrics, cardiology and obstetrics/gynaecology.
“As one of the top tertiary hospitals we do also treat many cases in the sub-specialities of oncology, neurology, orthopaedics and pulmonology.”
Bumrungrad share price might have fallen recently but the stock had made dramatic gains in the past five years, increasing in value by 450 per cent. Visitors from the UAE currently account for about 8.3 per cent of the hospital’s revenue from resident patients, down from 10.2 per cent in the first quarter of 2015.
Mr Prunratanamala feels that this trend could be set to continue with Thailand’s medical tourism industry becoming more dependent on visitors from emerging economies in the local region than the Middle East.
“I think if Middle Eastern economies are not recovering much and their healthcare sectors continue to improve at a fast pace. This could have a negative long-term impact on our healthcare industry,” he says.
“This has been our concern for a couple of years but we are seeing more patients from neighbouring countries such as Myanmar, Cambodia and Laos.”
Earlier this year CNN broadcast a documentary comparing the respective costs of medical treatment at Bumrungrad and at hospitals in the United States. The report calculated that the presenter could fly to Bangkok for two nights and get a colonoscopy, MRI scan, in-depth blood screening and a consultation for a sore shoulder for $4,300.
According to CNN the average cost of receiving this treatment in the US would have been $43,000 USD. So, while a combination of falling oil prices and improved local health care is persuading patients in the UAE to stay at home, hospitals in Thailand such as Bumrungrad still have tremendous appeal to medical tourists from other territories.
As long as medical tourists from the US are willing to travel 13,000km to receive treatment the industry will continue to thrive and Mr Narasimhan says that patients from all over the world are flying to Thailand specifically to undergo a procedure at Bumrungrad.
“We receive significant patient volumes from locals and expats in Thailand along with the neighbouring countries in South East Asia.
“We also get patients from south Asia, central Asia, China and east Africa and we receive more than 20,000 patients each year from residents in the US, which is significant given that they are able to afford to get care in many parts of the world and that Thailand is a 24-hour journey by plane.”
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