Asia and Asean as a region have a great advantage, a young and dynamic population, that has helped it to become the world’s engine of growth, but with any such growth comes demand for much a more sturdy backbone of healthcare infrastructure.
Asia as a region is in desperate need of better health infrastructure and despite the various promises made by governments to offer ”universal healthcare” to their citizens, not many countries have been able to afford to carry out such populist policies.
This is why so many countries across the region have allowed 100 percent ownership of healthcare infrastructure, but while such lenient rules should help encourage investments, not much has been invested. There could be various reasons for this, but one of the key factors could be the very fragmented nature of the sector; not many hospital groups have the financial might to undertake big moves and also bear potential risk.
There are others that have the resources and have made very tentative ventures abroad, but it seems they may have got their strategy wrong. Thailand’s two leading hospital groups, Bumrungrad International (BH) and Bangkok Dusit Medical Services (BGH), are in a good position to expand beyond home turf but they seem to prefer to limit their exposure mainly to Thailand and have foreign patients come to them.
BGH has a market capitalisation of nearly $5 billion and recently became a major investor in BH, capitalised at $1.7 billion. The two are comparable in size, expertise and quality to many other global players but their strategy of concentrating only on Thailand’s market is likely to put them behind their regional competitors, who could eventually become the leaders.
Having ventured into unknown territory and failing should not discourage the likes of Bumrungrad but instead should teach the hospital a lesson about how to refine its strategy and management skills to move forward. But instead of taking the bold step, the hospital (of which I am a customer) has opted to cocoon itself and not look for future growth potential.
It may be the time right time for the Thai medical industry to start to move out of its comfort zone. Otherwise, the likes of Fortis Healtcare, which has 75 hospitals under its umbrella and more than 12,000 beds, could move way ahead leaving the Thai players to bite the dust.
Falling and the standing up again is the basic nature of humans and businesses: they learn from experience and hope they do not repeat the same mistakes. So despite the setbacks Thailand’s two leading medical firms have encountered in their ventures outside the country, they should stand up and take a step forward.
These organisations should open their eyes and look at what is happening. Companies that were nowhere just a few years ago have started to copy the concept of Bumrungrad and BGH and carry out it in their countries, becoming leaders and not followers.
Thailand was one of the pioneers in medical tourism but that position could be endangered with moves in the region by growing rivals to BH and BGH. Despite the dominance these two hospitals have in their home market, once their competitors have the size and might, their next target surely will be Thailand.