INTRODUCTION and has started since the Asian Financial

INTRODUCTION

1.1   INTRODUCTION

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This chapter starts with an overview on medical
tourism in Malaysia. Nowadays, policymakers from both developed and developing
country starts to encourage the growth of economic through medical tourism
industry. But, the real relationship between medical tourism and economic
growth is still ambiguous. Even though medical tourism can spur the economic
growth through increase in foreign exchange, tourist arrival and investment but
still it can also lead to negative externalities which can effect the economic
growth either direct or indirectly. Without a doubt, relying on medical tourism
to effectively increase economic growth remains as an important research
question. So, a study should be conducted conducting a study on how factors in medical tourism affects the
economic growth in Malaysia. With the result that will be generated, a
strategies can be form to attract more foreign tourist around the globe for
medical purpose.

 

This chapter will thoroughly explains background of
study, motivation of study, problem statement, objectives of the study,
significance of study and organization of study.

 

1.2 BACKGROUND OF STUDY

            What is the definition of medical
tourism? According to Meghan, Wong and Chan (2014) in their writing, medical
tourism can be defined as all activities that are related to travel or hosting
a tourists to stay minimum one night at the destination for the purpose of
maintaining, improving or restoring health through medical intervention. Medical
tourism is not new and has started since the Asian Financial Crisis. During
that time, a number of Indonesian came to Malaysia’s private hospital to seek
for reasonable yet high quality of healthcare.

            According to Burkatt (2007), during
the seventeeth century, mostly people travelled to spas and hospital in Nile
came from richer family. In other word we can say that during those time where
getting on airplane was only for the upper class family, travelling was hard
enough especially travelling for medical purpose. Nowadays, travelling across
the border can be done at the tip of our finger as in Malaysia, we have Air
Asia which offers us the lowest price in flight ticket across the Asean. Plus,
travelling for medical purpose are mostly made because of its affordable cost,
high quality in medical facilities, its good services and also type of
destination.    According to Hazilah
(2012), people from developing country tend to go to US or developed country
where they have better equipped medical facilities and are more advanced in
term of technology.   However, there are
also trend where people from developed country such as US came to developing
country to seek for medical purposes. Although they have a tip top facilities
and technologies but the high cost had caused most of them to travel to the
other part of the world where they have cheaper cost but still high quality of
facilities. Hazilah (2012) said that in Britain, the long queue of the waiting
list of National Health Service (NHS) for surgery has causes the patients to
find any other alternative in other country. She also said that two regions
which is known as benefitted from medical tourism is Latin America and Asia
country. Unlike Britain, Malaysia has almost no queues for most of its medical
treatment (Wonderful Malaysia, 2017). According to Patients Beyond Border
(2016), the healthcare has become so expensive and estimated approximately
1400,000 million Americans will travel outside US for medical purpose.

            According to Malaysia Healthcare
Tourism Council, a forecasts has made regarding Malaysia medical tourism market
which is expected to grow at a compounding annual growth rate (CAGR) of 30.05%
over the next eight years which by the end of 2024 it can reach as much as US$
3.5 billion from US$424.96 million in 2016. Also, based on Transperancy Market Research, government
activities and lower cost of medical services compared to the same offered in
developed countries of North America and Europe is the core factor of foreign
countries to choose Malaysia. Other than that, with the rising influx of
tourists arrival from Middle East and North Africa (MENA) and other neighboring
countries and partly due to the economic factors such as tax exemption on
revenue generated from foreign patients and low exchange rate between RM and
any other currencies.

            (“Medical tourism to generate RM1.3b revenue in 2017”, 2017) reported
that Malaysia expected to hit RM 1.3 billion in revenues by 2017 which will be
contributed from medical tourism alone. It is also reported that Malaysia has
been listed as the most popular places to go for medical tourism purpose
followed by Singapore and Thailand. Medical tourism first gained his name when
Cuba tried to attract more foreign patients in order to gain more foreign
exchange during its crisis in 1989 to 1993. Fortunately, Malaysia has tried the
same technique during the Asian Financial Crisis and has successfully rising up
from the declining GDP. 

The
latest Budget 2018 presentation had announced that government will allocated an
amount of RM 30 million in order to spur the growth of Malaysia’s healthcare
travel industry. Plus, this is in line with the National Key Economic Areas
(NKEA) where it identified healthcare travel as a set to drive Malaysia as a
high-income nation by 2020. Plus, the allocation is for the initiatives to
promote Malaysia as the Asian Hub for Fertility Treatment, IVF and Cardiology
as well as the ‘Flagship Hospital Programme’.

Based
on the 2018 Budget, many initiatives is plan to promote this medical tourism
industry. First, in conjunction with the Asian Hub for Fertility, IVF and
Cardiology, there will be a collaboration with the Department of Immigration
Malaysia to facilitate the entry of medical travellers through Malaysia
Healthcare Traveller Programme (MHTP) by introducing the eVisa (Medical)
through online application services. Second, through the ‘Flagship Hospital
Programme’ private hospital will be given initiative to increase the quality
care and service, patient safety, quality management and service experience to
accelerate the growth. It will also help the private hospital to be
internationalized for the tourism purpose. Thirdly, for the use of ambulatory care
centre and also dental clinics, a double tax deduction will be applied on accreditation
expenses. Lastly, the income of value of increased export in healthcare services
will be exempted and the rate given will increase from 50% to 100% starting from
2018 until 2020.