How can Malaysia’s medical tourism growth survive rising costs?

China is becoming a faster-growing source of healthcare travellers.

Malaysia’s medical tourism industry is attracting more patients and revenue, but rising hospital costs and higher patient-acquisition expenses are forcing providers to raise revenue per patient without losing their price advantage.

“Transitioning from price-led competition toward experience-led differentiation will be important for Malaysia’s next phase of medical tourism growth,” PricewaterhouseCoopers PLT (PwC Malaysia) said in a June report.

PwC Malaysia identified rising patient enquiries but uneven conversion, higher acquisition costs, and inconsistent practices among providers as constraints.

Providers need to improve the international patient journey from enquiry and admission through post-care, rather than relying mainly on marketing, it said.

Revenue from Chinese healthcare travellers rose 23% in the first quarter from a year earlier, whilst traveller volume increased 17%, the Malaysia Healthcare Travel Council said.

Indonesia remains the biggest source of Malaysia’s medical tourists, accounting for about 50% to 80% of total arrivals, according to Kenanga Research.

Affordable prices, healthcare infrastructure, medical professionals, geographical proximity, cultural ties, and ease of travel support demand.

Rising costs could weaken that advantage. MBSB Research expects medical inflation at Malaysian hospitals to exceed 10%, putting pressure on earnings before interest, taxes, depreciation, and amortisation.

Hospitals are likely to focus more on complex and serious cases, whilst medical tourism will remain dependent on regional visitors, it said.

PwC Malaysia said providers should segment international patients by source market, treatment needs, and value rather than applying one strategy across all foreign patients.

Questions to ponder

1. Can Malaysia raise revenue per patient without losing its price advantage?
2. How can hospitals convert more international enquiries into patients?
3. Which medical specialties offer the greatest potential to attract higher-value international patients?