Medical tourism key for KPJ’s recovery

Since the reopening of international borders, KPJ Healthcare Bhd (KPJ) has made medical tourism a key focus to expedite recovery post pandemic.

Thus far the group has generated RM93.1 million worth of revenue from healthcare tourism in the first nine months of 2022 (9M22).

“In terms of foreign patient volume, it is worth noting that the 9M22 volume has recovered close to CY19 levels, despite international borders still remain closed in 1Q22,” observed analysts at Hong Leong Investment Bank Bhd (HLIB Research).

“We would also like to highlight that treating foreign patients is a good way to boost revenue intensity as hospitals are allowed to charge foreign patients 20 per cent more (industry practice) than the charges stipulated in the 13th Fee Schedule.”

The team with MIDF Amanah Investment Bank Bhd (MIDF Research) saw that in line with this growth, KPJ had developed a health tourism ecosystem with 11 hospitals designated to cater to health tourists.

“Medical tourism in Malaysia is currently contributing about RM11 billion, and is expected to grow with 10-year average cumulative annual growth rate of seven per cent. Tourists are expected to be from Indonesia, India, Singapore, Japan, and Australia, as well as countries in Europe, Americas and the Middle East.

“Medical tourists seek treatments and procedures, which included but not limited to, NCD treatments, cosmetic surgery, dental, reproduction treatments and organ transplants.”

The challenge to the medical tourism industry continues to be the scarcity of follow-up care, MIDF Research cited. However, with KPJ’s international affiliation and subsequent expansion, this could mitigate this risk and continue to leverage on the care chain further.

“In line with the return to prepandemic levels and in mutual collaboration with the Malaysian Health Tourism Council (MHTC), we believe KPJ will leverage on this recovery in the near to midterm.”

“The reopening of international borders and the shift into endemicity have both positively impacted positively on the healthcare sector, with elective medical treatments and health tourism increasing in demand.

“As such, KPJ has return to performing on its pre-pandemic level, and is anticipated to maintain this momentum for the remainder of the year. The group will keep increasing its capacity in order to meet the rise in patient demand and continuously enhance the provision of patient care.”

The group’s expansion will be accelerated by the inauguration of its Damansara Specialist Hospital 2) as its flagship hospital and divestments of its Indonesian operations and Jeta Gardens, as well as its plans for KPJ University and Ambulatory Care Centres to add value to its workforce and care quality in the near future.