One of the five competitive
forces according to Harvard University professor, Michael Porter is the "Threat of Substitute" and it is my opinion that Myanmar can replace Thailand as the medical tourism hub over the next decade and Thailand healthcare must be aware and there are several reasons.
This week, I visited Myanmar with one of my clients and I had the opportunity to visit many private hospitals operated by both the locals as well as international operators. This Southeast Asian country of nearly 53 million people is fighting its way to build the economy and its infrastructure after being isolated from the world for nearly six decades. The election of the new non-military president in 2016, Mr. Htin Kyaw and Ms. Aung San Suu Kyi, the new State Counsellor, has given hopes to both locals and international communities. One of the fastest growing sectors is healthcare. One reason is because of low level medical standards that is deriving well to do locals to seek treatments in other countries such as Thailand but also the fact that the government knows that they can not convince foreign companies to invest in Myanmar as international companies face challenges in recruiting expatriates and their families to work in the country due to their concern for international level healthcare.
From what I observed, the hospitals in Myanmar are operating at over-capacity as the facilities and the number of foreign trained local physicians are limited. The hospitals have been recruiting foreign medical professionals, thanks to the ease of medical licensing, foreign doctors can practice in the country with minimal paperwork requirements and by only paying a licensing fee of $500 per month.
Currently, there are many hospitals such as Bumrungrad International, Bangkok Hospital and Samitivej Hospital that have established themselves in Myanmar. I think, the primary purpose is to respond to ever increasing number of patients who travel form Myanmar to Thailand. In 2016, Bumrungrad reported that patients from Myanmar ranked #1 among their foreign patients and over 60% of the hospital revenue was derived from medical tourism.
Does this mean that Myanmar can compete with Thailand in medical tourism sector?
Yes, it can. These are my reasons:
Reason #1- Ease of International Hospitals Entering Myanmar
Right now, all healthcare activities and investments are focused on the local people as they are in desperate need for high level international standard of care, but as the country's healthcare system matures over the next decade with more and more foreign hospitals entering the market, it is my opinion that Myanmar will begin to compete with Thailand from the healthcare standpoint. However, whether or not the next decade will be enough for Myanmar to compete with lifestyle choices that medical tourists enjoy when visiting Thailand, remains to be seen. The number of good quality hotels, shopping centers, entertainment and international dining venues are still quite limited and unless, the country's general development plan follow the healthcare growth, medical tourists may continue to visit Thailand.
In Thailand, the government and hospitals must also become more open to the idea of foreign doctors licensing and open up the Thai medical market that has been traditionally held by the locals and restricted to family owned enterprises to international investors and medical community. The continued restriction will make it very difficult for Thailand to stay competitive as a healthcare ASEAN hub due to shortage of medical professionals that are faced by all of the hospitals. Currently, in Thailand, the specialists are shared among all rival hospitals adding external pressure.
Reason #2- Low cost of labor compared to Thailand
Another threat that Thailand can also face is much higher cost of labor for both professionals and general staff. that will make it more difficult for healthcare groups to compete as the cost of local labor is still very cheap in Myanmar. An average salary of a local doctor is approximately $1000 per month and a regular english speaking staff is about $300 per month.
Reason #3- There are more proficient in English
From what I observed, the Myanmar doctors are much more proficient in speaking English. This will be a huge asset for both international hospitals who want to educate and train the local teams as well as foreign patients who need to communicate in English. This continues to be on of the set backs for many of the doctors in Thailand.
Reason #4- The Myanmar doctors are more open to learning
The doctors that I have met on my trips to Myanmar, seem to be very forward in building relationships and open to learning. This could be due to the fact that they have been isolated so many years, they cannot afford attending international events to lean and/or they know their level of education is very low. In contrast, I have found Thailand doctors to be shy in their approach with foreign individuals, not as much open and also have more ego than what I observed in Myanmar. The introvert personalities of Thai professionals could become a barrier in learning and growth from the global healthcare community.
Reason #5- The trilateral India- Myanmar- Thailand Highway
The opening of this highway connecting India to Thailand in 2016 , has given Myanmar the potential to become a central hub not just for commercial and agricultural trades but for the service industries. India's strong healthcare sector with major hospital chains, low cost english speaking medical professionals can help grow Myanmar to the next medical hub in Asia.
Thailand has always enjoyed the reputation as a global medical hub due to its excellent medical education, competitiveness among private hospitals and the ability to offer medical tourists a wonderful infrastructure, beautiful beaches and warm Thai hospitality. However, for Thailand to continue to proper in this sector, it must recognize that it cannot close its doors to the international hospital groups and must ease its medical licensing procedures, otherwise, it can face some tough competition form countries such as Myanmar.
Dr. Allen Nazeri is the CEO and founder of Nazeri & Company Co., Ltd as well as Dr. Allen Nazeri Healthcare and Advisory Group with offices in Las Vegas and Bangkok. He has received his dental degree from Creighton University in 1990 and is currently receiving his MBA degree in investment banking and private banking from Bedfordshire University in London. He specializes in consulting with healthcare companies who wish to expand their operations in the areas of business development, Investment Banking, M&A sell-side and buyer-side advisory. He can be reached at Drallenci@gmail.com.
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