Medical sector in the pink of health
THE Johor-Singapore Special Economic Zone (JS-SEZ) continues to invite a plethora of talking points, particularly in the healthcare industry, which has been receiving significant media attention of late.
The SEZ is bound to draw interest with several parties keen on developing health facilities, including hospitals and pharmacies.
One of the interested major players is Thomson Medical Group Ltd (TMG), which owns 70% of local healthcare group TMC Life Sciences Bhd, the manager of Thomson Hospital in Kota Damansara, Petaling Jaya.
TMG is bullish on the prospects of the Malaysian healthcare industry, including the SEZ, provided enough is done to ensure the mega project does not end up as merely a marketing initiative.
Optimism about healthcare
TMG group chief executive (CEO) and executive director Melvin Heng believes that Malaysia is already a leading healthcare destination, bolstered by doctors who are fluent in English and Bahasa Malaysia, two of the most important languages in South-East Asia.
“Malaysia, together with Thailand with its service-oriented culture and environment, are emerging as strong contenders to Singapore as a leading healthcare hub.
“The other point is that Johor has always been a transition point between Malaysia and Singapore and with the Rapid Transit System (RTS) Link, it would make conducting any business even more convenient, allowing the cross arbitrage of strengths from both sides of the Causeway,” he tells StarBiz 7.
Heng explains that the anticipated increase in connectivity between Singapore and Johor will allow Singaporean companies, including healthcare groups, to place their plants and premises in Johor, before adding that southern Peninsular Malaysia is definitely seeing a demand for advanced healthcare.
His projection is that Thomson Hospital Iskandariah (THI), which is expected to begin construction early next year and be completed by the first quarter of 2029 with licensing, will create at least 2,000 jobs.
This will drive more skilled human capital to the area.
Professor of health economics at International Medical University Dr Syed Aljunid also believes that with the good infrastructure in the area as well as tax incentives, international healthcare players will certainly be attracted to operate in the SEZ.
He says there are ample opportunities for private investments in Asean, particularly to manage chronic non-communicable diseases, especially cancer, diabetes mellitus and heart disease, which are on the rise in the region.
“The ageing population in Asean might also be another important aspect that might attract investors,” he says.
Echoing Heng’s views, regional CEO (Southern and Eastern) of IHH Healthcare Malaysia Kamal Amzan tells StarBiz 7 that Johor’s proximity to Singapore makes it an attractive destination for investors looking for a more cost-effective option to tap into South-East Asia’s growing healthcare market.
“The JS-SEZ offers a gateway to both Singapore’s advanced infrastructure and Malaysia’s lower operational costs,” he opines.
Ageing population
Ideas economist and research assistant Doris Liew observes that with Singapore’s median age continuing to rise, the need for geriatric care, specialist medical services and long-term care facilities will increase substantially.
Beyond conventional healthcare services, she says the SEZ is also well-positioned to develop ageing care facilities, such as private nursing homes, assisted living centres and retirement communities tailored to Singapore and other Asian countries’ elderly population.
“Given Singapore’s high cost of land and labour, Johor presents a viable alternative, particularly for middle-income retirees looking for comfortable and well-equipped facilities close to home,” says Liew.
She believes Johor has the potential to become a major player in the medical tourism sector, mirroring Penang in the north, which has long been recognised as a leading medical tourism hub, attracting patients from Indonesia, Singapore and Thailand.
“Similarly, Johor can carve out its niche in the south, capitalising on its proximity to Singapore while also catering to patients from other ageing economies in the region, such as Japan, South Korea and China,” she adds.
Addressing the concern of rising premiums
Heng believes that Malaysia needs a multi-pronged approach to get an effective handle on the problem of escalating health insurance premiums, as he agrees with Ideas’ Liew that the country’s ageing population is a significant factor.
On top of that, advancing technology – which is also costly – is also unavoidable as patients seek the best care.
To formulate effective solutions, Heng strongly advocates forums between patients and insurers to understand the nature of the problem and why premiums are on the rise.
He says insurers should also find out which groups of patients are making more claims as this will help them make coverage more sustainable to for the whole pool of policyholders.
Heng says patients and providers must openly discuss issues, citing that the co-payment option mandated by Bank Negara now is a good example, which was also practised by Singapore some years ago.
What’s next?
Heng, a practicing radiologist before taking on the CEO position at the group, says while Johor remains a huge project, TMG will also be investing more in its Kota Damansara premise.
He says there is demand for more intensive services in the area as evidenced by TMG’s peer Sunway Healthcare Group also opening a medical centre there in January.
“We are already having it as good as it can get, especially with the Mass Rapid Transit or MRT having a stop right outside Thomson Hospital.
“Since we are still a relatively small group, we can focus our resources better,” he says.
Heng says TMG for now is planning to keep business in Asean.
Aside from Thomson Hospital Kota Damansara and the upcoming THI, the group also runs Thomson Medical Centre on Singapore’s Thomson Road and FV Hospital in Ho Chi Minh City.
IHH’s Kamal agrees that Asean remains one of the most promising regions for private healthcare investments.
“Many South-East Asian countries still face gaps in healthcare infrastructure, creating opportunities for private investors to health services,” he says.