Assalamualaikum Warahmatullahi Wabarakatuh, good afternoon and salam 1Malaysia.
Y.B. Dato’ Sri Liow Tiong Lai
Minister of Health Malaysia
Y.B. Tan Sri Nor Mohamed bin Yakcop
Minister in the Prime Minister’s Department (Economic Planning Unit)
Excellencies, Distinguished Guests, Ladies and Gentlemen
1. During my 2010 budget speech I pointed out that our economy is at a critical juncture, we are either to remain trapped in a middle-income group or advance to a high-income economy. We have enjoyed the fruits of growth driven by exports from the manufacturing sector, however, competition in our traditional areas of strength are getting more intense. This is inevitable. It is incumbent on us to meet the challenge and change. This involves transforming our economy by moving up the value chain of economic activities in order to create higher paying jobs.
2. I have also said that for Malaysia to achieve the developed economy status by 2020, it must be a more service-sector driven economy. While a strong and vibrant manufacturing sector will still remain important for the country, we expect more contribution for growth to come from the services sector. For 2010, we expect the services sector to be the main driver of growth, expanding by 3.6%.
3. Today the world recognises that the healthcare sector provides a strong potential to be developed into a global industry. The OECD has recently started a study on the trade policy implication of this phenomenon. Relatively still an “infant industry”, data from research houses have indicated that the global healthcare travel market is projected to grow from US$20 billion in 2005 to between US$40-60 billion in 2010, with some even projecting up to US$260 billion in 2020. It has also been reported that, in 2007, about 750,000 Americans sought medical care outside the U.S.A. and the number is expected to reach 15.75 million in 2017.
4. Taking into consideration global trends and our domestic capacity, the Government has identified healthcare travel as one of the new sources of growth in its effort to push for sustained economic growth with greater emphasis on the services sector. The Third Industrial Master Plan launched in 2006 has identified healthcare travel as one of the potential services sub-sectors to generate national economic growth. Various agencies have also embarked on healthcare travel projects such as in the Iskandar Development Region, Northern Corridor Economic Region (NCER) and the Wellness Zone in Port Dickson.
5. There is no doubt Malaysia is fast-gaining recognition as a preferred destination for healthcare travellers with its highly-trained and skilled medical professionals and personnel, state-of-the-art medical equipments, modern facilities and infrastructure. The establishment of the Malaysian Society for Quality in Health (MSQH) in 1997 is a testimony of our pursuit of quality in health care services. This is an industry accreditation based on national and international healthcare standards. I am also glad to know that six of our healthcare facilities have obtained international accreditation from JCI or the Joint Commission International.
6. Compared to many countries, developed and developing, our healthcare costs are very competitive. An angioplasty which costs around UD$57,000 in the US and US$13,000 in Thailand, is only about US$11,000 in Malaysia. A knee replacement procedure which costs around US$40,000 in the US and US$13,000 in Singapore, is only UD$8,000 in Malaysia. These indicative prices illustrate our competiveness in the region. It is no surprise then that Nuwire Investors (2008), an online news source, has ranked Malaysia amongst the world’s top five medical tourism destinations in terms of quality, affordability as well as receptiveness to foreign investment. Indeed, our competitive cost of treatment, along with excellent service, has enabled Malaysia to provide quality healthcare services.
7. We are also not short of medical achievements in Malaysia. Recently our National Heart Institute or IJN has scored a first in Asia, with a new procedure called trans catheter aortic valve implantation using Core Valve device, which does not require patients to undergo a sternotomy or cardio pulmonary bypass. Besides IJN, NCI Cancer Hospital was the region’s first centre to use Varian Trilogy System for radiation therapy in 2006 and our public doctors at Selayang Hospital performed the world’s first arm and hand transplant in 2000.
8. Indeed Malaysia’s private healthcare industry is a hidden jewel that has a strong potential to compete successful and to be an earner of foreign exchange. The top 35 private hospitals of our healthcare industry have been able to collectively see their revenue grow from RM58.9 million with around 103,000 medical tourists in 2003 to RM299.1 million in 2008 with around 375,000 medical tourists. In terms of growth, medical tourists grew at an average of 30% per annum while revenue grew at an average of 35% per annum during that period. I understand that performance during the first half of this year has been affected by the global economic slowdown and the Influenza A (H1N1) pandemic, but I am pleased to note that revenue per patient has grown.
Ladies and Gentlemen
9. The establishment of the Malaysia Healthcare Travel Council is vital to bring together the synergistic efforts of significant players in the Malaysian healthcare travel industry, both in government and in the private sector, to galvanise our collective efforts to drive growth of this industry to a higher level. MHTC is tasked with the responsibility to formulate strategic plans for promotion of healthcare travel services and to spearhead the promotional activities for Malaysian healthcare travel industry. MHTC will also provide a focal point for industry players to collaborate and resolve issues that may hamper the development of the industry as well as be the focal point for enquiries on healthcare travel.
10. In this regard, I am pleased to announce that an Advisory Committee has been appointed to assist the Government to steer and set direction for the healthcare travel industry. The Minister of Health, YB Dato’ Seri Liow Tiong Lai and Minister in the Prime Minister’s Department, YB Tan Sri Nor Mohamed Yakcop will co-chair the Committee. The members of the Advisory Committee comprise of representatives from the government and private sector organisation and individuals are selected on the basis of their capabilities in contributing to the growth of the industry. I congratulate them for the appointment and acknowledge the importance of the enormous task that lies ahead of them to take Malaysia’s healthcare travel industry to the global level.
11. I believe that our ability to develop a world-class healthcare industry in the country will also contribute to reversing the serious brain drain of Malaysian medical professionals. I realise that, being professionals, the opportunity for professional development can be stronger than monetary incentives. The opportunity is there to make Malaysian healthcare industry world-class. I call on the industry to collaborate not only amongst yourselves, but actively seek collaboration with renowned healthcare institution abroad to achieve this goal. This will not only help us to have access to greater skills and knowledge, but also help us gain a presence in the evolving global healthcare networks.
12. The participation of well known foreign health care providers/companies can help Malaysia to develop and promote highly specialised medical services as part of our ambition to become the gateway for the Asia Pacific health care market for these foreign health care players. While healthcare may be deemed a sensitive sector in some countries, partial opening and carefully crafted liberalisation policy will benefit the health care industry in terms of quality and availability of wider range of services. This will require extensive research by health policy makers.
13. We must also ensure that increased arrivals of foreign patients do not compromise the services rendered to local patients. While the government is investing more in expanding our public healthcare system, the private sector should undertake corporate social responsibility initiatives to provide services for the needy in the country.
14. In reiterating the importance of this industry, the recent 2010 Budget included an enhanced tax incentive for healthcare service providers who offer services to foreign health tourists.Income tax exemption of 50 per cent on the value of increased exports will be increased to 100 per cent. This enables healthcare service providers to offer high quality health services and attract more health tourists.
15. In order to further facilitate the development of the healthcare travel industry and make private hospitals more export-driven, our private hospitals need to expand and undertake greater promotion efforts. You need to have facilities that are friendly to international patients, be it on your websites or in your hospitals.
16. To encourage private hospitals to expand their capacity, the Government will provide tax exemption equivalent to 100% of qualifying capital expenditure incurred for a period of 5 years for the construction of new hospitals or for expansion/modernisation/ refurbishment of existing hospitals. This tax incentive is for applications received from 1 January 2010 until 31 December 2014. Setting up of the International Patients Unit in these hospitals also qualify for this incentive. To be eligible for this incentive, these hospitals must be registered with the Ministry of Health for the promotion of healthcare travel.
17. In line with the Government’s desire to promote healthcare travel, the Ministry of Health, Malaysian Medical Council and Association of Private Hospitals Malaysia will review existing advertising regulations and guidelines to see how to meet the changing role of private hospitals in promoting healthcare travel or medical tourism.
18. To encourage private hospitals to attain high quality of healthcare services, I am also delighted to announce that expenses incurred by private hospitals to obtaindomestic or internationally recognised accreditation such as those recognised by the International Society for Quality in Health, for example Malaysian Society for Quality in Health (MSQH) or Joint Commission International (JCI), are eligible for double deduction incentive under the Income Tax Act 1967.
19. To encourage more Malaysians or non-Malaysian medical specialists to return or come from abroad to serve in Malaysian hospitals, the specialist’s non-Malaysian spouse who qualify as a professional as per the Malaysian Classification of Occupation (MASCO) will automatically be offered an employment/professional pass, subject to registration with the relevant professional bodies where appropriate.
20. To facilitate smooth arrival, stay and departure of medical tourists:
· The Commercial Vehicle Licensing Board (CVLB) will issue relevant permits to hospitals/ medical facilities registered under the Ministry of Health for the promotion of healthcare travel. The permits will allow hospital vehicles to ferry patients and accompanying persons from and to airport/ port and hospital/ hotel of stay;
· foreign patients entering Malaysia for medical treatment on emergency via ‘Visa-On-Arrival’ will be allowed to convert their VOA status to social visit pass upon recommendation of private hospitals registered under the Ministry of Health for promotion of healthcare travel; and
· approval of extension of stay for medical tourist at the state level will be expedited.
21. With these new measures, I would like to see greater growth of the healthcare travel industry in 2010 and in the years ahead. We have a definite window to take the lead. We must not allow this opportunity to pass us by.
22. In conclusion, the evolving economic forces has created an opportunity for Malaysia to move up the value chain of economic activities. Malaysia’s potential is being recognised, both at home and abroad, and we need to seize the opportunity. The factors leading to the growth of global healthcare travel will keep evolving and challenging healthcare travel industries around the world to remain competitive. This initiative we launch today will put us in good stead to meet the challenges as both Government and industry players are together to steer the industry.
23. On that note, in the name of Allah, most Gracious, most Compassionate, I hereby officially launch the Malaysia Healthcare Travel Council.