IT will be increasingly difficult for Singapore to maintain its position as the leading medical-tourism hub in South-east Asia, given the high cost of medical treatment and strength of the Singapore dollar, said BMI Research in a report released on Thursday.
In addition, government support has remained limited as compared with Thailand and Malaysia, which will see Singapore losing medical tourists to these competing hubs, it said.
This will in turn pose downside risks to multinational drugmakers as medical tourism has been a strong source of demand for high-value medicines, BMI said.
"The country's vulnerability was accentuated following a 25 per cent year-on-year decline in medical tourists revenue in 2013, from S$1,110 million in 2012 to S$832 million. This comes as the overall tourism industry continues to grow, rising by 1.7 per cent year on year to S$23.5 billion for 2013."
The report said a heart bypass in Singapore costs 41 per cent more than in Thailand and 106 per cent more than in Malaysia.
This significant pricing premium has traditionally been mitigated by the high levels of healthcare treatment offered as the country is ranked sixth out of 191 countries globally and the best in Asia by the World Health Organization.
But this gap in standards has started closing with private healthcare providers in competing hubs such as Thailand gaining international accreditation, said the report.
In terms of currency strength, BMI said over the past two years the Sing dollar has strengthened 24 per cent against the Indonesian rupiah.
The Indonesian market represents 56 per cent of total medical tourism revenues in 2013.
Revenues from Indonesian medical tourists fell 38 per cent year on year to S$463 million in 2013 from S$640 million in 2012.
Private healthcare providers are also incentivised to expand overseas, thereby reducing the need to aggressively market their services to attract medical tourists to Singapore.