Raffles Medical's earnings could take hit as footfall stumbles in Singapore

Doctors were advised to stop or defer accepting new foreign patients.

The Singapore government’s advisory to focus on treating domestic patients could hurt near-term patient footfall for Raffles Medical Group’s (RMG) hospitals in the island, according to a CGS-CIMB report.

On top of intensifying global travel restrictions, foreign patients contributed to nearly 30% of their hospital revenue, and its Singapore hospitals form 54% of its revenue in FY2019.

Given these, the company’s earnings per share (EPS) in FY2020-22 could take a hit, accounting for the loss of medical tourism and a possible macro slowdown, which could drag healthcare spending on elective procedures.

Based on the Ministry of Health’s (MOH) directive, hospitals and private specialist clinics were instructed to stop or defer accepting new foreign patients who do not reside in Singapore, and encourage their current foreign patients to seek continued care in their home countries.

This follows as Singapore closes its borders to all short-term visitors effective from 24 Mar 2020 and as many countries implement and intensify travel restrictions.