Malaysia likely to remain attractive to medical tourists amid geopolitics, currency swings: IHH group CEO
The country’s cost-competitiveness and growing capacity are seen as advantages by price-sensitive patients
[KUALA LUMPUR] The Middle East crisis is hitting South-east Asian currencies and patients’ wallets, leading many to bypass premium medical hubs such as Singapore in favour of more cost-effective destinations like Malaysia.
Dr Prem Kumar Nair, group chief executive of IHH Healthcare – which is dual-listed on the Singapore Exchange and Bursa Malaysia – said that he is already seeing the initial impacts on the global health-services provider.
The group operates 89 hospitals and more than 140 healthcare facilities, including ancillary centres, in 11 markets globally.
He noted Singapore’s position as a regional medical powerhouse, attracting patients from other South-east Asian countries. Indonesia, for example, is the city-state’s largest source of medical tourists.
According to Indonesia’s Health Minister Budi Gunadi Sadikin, around one million to two million Indonesians travel abroad annually for medical treatment, primarily to Malaysia, Singapore, Thailand and the US.
However, Dr Nair cautioned that patient flows are highly sensitive to currency-rate movements, particularly among Indonesian medical tourists.
“Every time the rupiah weakens – as we saw during the Asian financial crisis and are seeing again now – affordability becomes a major hurdle,” he told The Business Times. This often leads to a pullback in high-end, elective surgeries.
The Indonesian rupiah has been on a downward trend recently, under pressure from geopolitical tensions and growing fiscal concerns. It has slid 6 per cent on the year against the Singapore dollar as at Thursday (Apr 2), 11.5 per cent against the Malaysian ringgit and 1.6 per cent against the greenback.
A patient from Indonesia could choose to go to Malaysia instead of Singapore, as they “can do the same procedure with similar outcomes at a better price”, noted Dr Nair.
Malaysia is emerging as a beneficiary of this change, underpinned by its cost-competitiveness and growing capacity in key medical tourism hubs such as Penang and Johor.
However, the shift is likely to be selective. The group CEO expects Singapore to retain its position as a regional hub for highly specialised and complex procedures, where clinical capabilities outweigh cost considerations.
The impact of the ongoing conflict is not limited to South-east Asia. Dr Nair pointed out that IHH’s operations in India and Turkey are also feeling the strain.
India is grappling with a drop-off in Middle Eastern patients due to travel disruptions, while Turkey is navigating complex border dynamics with Iran and shifting demand from Central Asian states such as Azerbaijan.
Demand deferred, not lost
Despite near-term pressures, IHH does not expect a structural decline in demand.
Dr Nair said that healthcare demand tends to be delayed rather than cancelled, with patients eventually returning once economic conditions stabilise.
“You can defer, but you cannot avoid many treatments,” he pointed out, citing procedures such as gallstone removal or spinal surgery that cannot be postponed indefinitely.
The pattern has been consistent across past crises, including the Covid-19 pandemic, where patient volumes rebounded quickly after disruptions eased.
Insurance coverage is also helping to cushion the impact, he said, noting that with more patients covered across key markets such as Singapore, Malaysia and India, out-of-pocket constraints are less binding than in previous downturns.
While Malaysia is gaining ground in affordability and efficiency, Dr Nair maintains that Singapore remains the regional leader for high-complexity care.
He has observed that patients choosing high-end treatments such as proton therapy in the Republic tend to be from overseas, which could anchor Singapore’s standing in this segment of medical tourism.
He also highlighted the transformative impact that the Island Hospital acquisition has had on IHH. The addition of the 600-bed facility in 2024 propelled the contribution from medical tourism from a mere 3 or 4 per cent to nearly 10 per cent for the group last year.
The acquisition boosted the visibility of IHH’s entire Malaysian portfolio as well. “Indonesian patients realised we had a strong infrastructure for foreign care,” he said, adding that this has in turn driven traffic to other premier sites such as Prince Court Medical Centre in Kuala Lumpur and Gleneagles Hospital Johor.
Today, Malaysia accounts for 15 per cent of IHH’s medical tourism revenue, trailing closely behind the high-teen figures reported in Singapore and Turkey, according to Dr Nair.
Long-term outlook intact
While geopolitical risks may weigh on near-term patient flows, he said that the long-term outlook for medical tourism remains intact, supported by ageing populations and rising demand for quality healthcare across Asia.
For now, the Iran-linked conflict is creating friction in travel and affordability, but not erasing demand, noted Dr Nair.
“The short answer is, yes, medical tourism is affected, but ultimately, patients will still need treatment,” he added.
