Important - The Singapore Medicine Story

The SingaporeMedicine Story Dr Jason CH Yap MBBS, MMed (Public Health), FAMS, MBA (Information Systems), CISSP

Director (Healthcare Services), Singapore Tourism Board Medical Travel (or as it is more commonly misnamed, Medical Tourism) is the deliberate travel for healthcare outside one’s own country. Besides being an old practice of the more affluent, it is also a new economic phenomenon following the globalisation of other industries. In the midst of a cacophony of national tourism organisations announcing their entry, Singapore is starting the fifth year of its government-industry partnership to develop and maintain its decades-old position as the medical destination of choice in the region. This is the story of SingaporeMedicine. Since its separation from the Malayan Federation in 1965, Singapore has developed into an efficient, international city rated by Political and Economic Risk Consultancy (PERC) as Asia’s least risky economy and most politically stable country in 2007. In its survey of national healthcare systems in 2000, the World Health Organization ranked Singapore sixth in the world and best in Asia. While Singaporeans have excellent life expectancies at birth of 78 years for males and 82 years for females, Singapore’s total healthcare expenditure is only about US$4 billion a year or about 3.5 percent of the national GDP of US$117 billion (S$194 billion), of which only one third comes from the government.

Why Does Singapore Serve International Patients? Every country has a political and social imperative to care for the health of its people, so why then does Singapore, and more pertinently the Singapore government, explicitly direct efforts to international patients? There are those who contend that local healthcare services should be for local people. There are five main reasons why the international patient plays an important part in Singapore’s healthcare economy and ecology.

Why International Patients? •

Revenue

•

Medical Community

•

Medical Hub

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International City

•

Local Needs

1 Revenue. Singapore has no hinterland, no minerals, and no resources other than its people. Ever since independence and the departure of the British military presence (which took away a sizable chunk of the economy), Singapore has had to earn its keep through international trade. Hence the dollars earned by providing such healthcare services is simply part of the economic lifeblood of the country, in the same way it is the attraction for the private healthcare industries in other medical travel destinations. Beyond the revenue from clinical services, patients and their travelling companions also spend on accommodation and transport, dine, relax and otherwise enjoy the excellent tourist destination that is Singapore. Even those who come to Singapore primarily for other reasons may find time and occasion to visit healthcare providers for the odd Botox injection. All in all, some nine percent of the expenditure by tourists and other visitors to Singapore can be attributed to international healthcare services.

2 Medical Community. Approaching from the opposite end, it is only natural for many patients to be referred to Singapore because doctors in their own country came to Singapore for various medical conferences and/or training. These doctors then refer cases to their counterparts in Singapore. Knowing that some technologies and services are available in Singapore and trusting in the competence of their operators, conscientious doctors refer patients to Singapore for better care. Doctors in Singapore have also being journeying into the region to perform and demonstrate surgery and to train doctors. Singapore has also mounted medical missions when natural and manmade disasters hit her neighbours. As Singapore’s healthcare services have been built up through the years with the help of the developed world, Singapore is paying it forward by in turn sharing knowledge and expertise with the region. 3 Medical Hub. Beyond direct clinical services, Singapore is a medical hub in the fuller sense of the phrase. The Economic Development Board of Singapore cultivates a biomedical cluster of related and mutually supporting industries in the Life Sciences. Many healthcare and healthcare-related multinational companies are headquartered in Singapore. These include the pharmaceutical industry where six of the eight biggest companies are headquartered and manufacture in Singapore. Similarly, multinational healthcare consultancies are headquartered in Singapore but operate in the region. Interestingly, although all except singleton hospitals in Singapore have been accredited by the Joint Commission International, JCI nonetheless established its Asia-Pacific headquarters in Singapore in 2006, not only because of the business and social reasons for locating their office in Singapore, but also because Singapore is an excellent jump-off point for business ventures in the region and China, and because Singapore’s long experience in healthcare quality provides the consultants that JCI needs to serve its customers. Clinical trials and research projects, often requiring many more subjects than Singapore alone can provide, are nonetheless run out of Singapore, in particular out of Biopolis, Singapore’s purpose-built research hub. 4 International City. Beyond the Life Sciences, Singapore is also an international business city for other industries eg media, info-comm, financial services and others. There are many expatriates living in Singapore and business travellers coming through. Although not always explicitly acknowledged, a key consideration for the choice of a regional or world headquarters is the safety and healthcare services for the expatriate staff. The business needs must be pressing indeed for executives to deliberately choose to live in the more dangerous cities of the world. In this indirect sense, the quality of healthcare services in Singapore plays a significant role in making Singapore the choice of the 7,000 multinational companies headquartered here. 5 Local Needs. The most critical motivation for SingaporeMedicine is the health of its own people, not just the expatriates and travellers. The Ministry of Health has a comprehensive Health Manpower Development Programme which sends Singapore’s doctors and other healthcare professionals to trained in the best centres of the world, with large catchment zones and high patient-volumes in their subspeciality (or subsubspeciality) interests. On their return, they find a small population of only 4.5 million people and basically too few patients in their areas of interest. In order to afford the more expensive technologies, to maintain the skills of doctors trained at great expense, and to retain the doctors in the country, it is critical to have patient volumes commensurate with the level of sophistication of the medical services. Such a rationale also means that international clientele is not only needed by the private sector but by the public sector as well. Singapore’s “public sector” hospitals are all private limited companies (albeit government-owned), licensed under the Private Hospitals & Medical Page 2 of 10

Clinics Act and operated as private entities but with a government subvention that enables subsidies for the less affluent. A minimum patient volume (and size of population served) is needed to maintain world-class services. Singapore finds itself in the apparently paradoxical position of needing to serve international patients in order to serve its own people to the clinical standards desired. National Imperative. All in all, it is the last rationale that drives the SingaporeMedicine effort. If Singapore chooses to serve only its own people, the quality of care it is able to provide will not be the best possible. There is therefore no choice but to serve international patients

Why Do Patients Seek International Healthcare? Conversely, why do patients seek international healthcare services? Many Singaporeans think that international patients come to Singapore because of her superior healthcare services. The reality is that rational people do not readily travel for healthcare, and will generally only seek international healthcare services when they are unable to obtain the healthcare they need or want back home. There are some five types of healthcare that patients travel for.

Why International Healthcare? •

Essential

•

Affordable

•

Quality

•

Premium

•

Incidental

1 Essential Healthcare. The development of healthcare services, and more pertinently healthcare systems, has not been even around the world. Today, more than many other industries, the entire economic structure of healthcare varies widely from country to country. Medical technologies and services may not be available at all in some countries (especially the developing countries) or they may be available but with long waiting lists, usually because the healthcare system is not able to match resources with demand (eg in some developed countries). 2 Affordable Healthcare. In many cases, it is not the clinical services that have fallen behind but the healthcare financing system that has fallen apart. Services may be available but are inaccessible to particular population segments because they are impossibly expensive. Health insurance is available in many countries but their premiums may not be affordable. In some instances, just the co-payment portions are so expensive that it is cheaper to travel for healthcare in another country. 3 Quality Healthcare. Even where services are available, the quality of care may be uneven. Capabilities and competences vary between doctors within one healthcare facility, so it is hardly surprising that there should be differences between the very different healthcare systems across international borders. The differences may be more perceived than actual but are still important enough for patients to travel. Stories of mistakes or misbehaviour of a few doctors or facilities can cause a general lack of trust in the whole system. People are willing to go farther for services that may make even a small difference when it comes to matters of health. 4 Premium Healthcare. If there is higher quality healthcare away from one's own country, some services then naturally become regarded as of premium quality, available only to the rich, sophisticated or enlightened. Patients boast of the services

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they obtained at these high-end centres and may look on these services as luxuries available to only a few. 5 Incidental Healthcare. Lastly, and overlapping the four reasons given above, many people consume healthcare while overseas for other purposes. Certain healthcare services may be sought simply because they are convenient where the traveller is visiting, or because they are unavailable, unaffordable or inadequate in the travellers’ own countries. Major examples are dental and cosmetic services. Needs, Wants and Gaps. Ultimately, the decision to seek healthcare outside one's own country is a function of one's needs and wants, and the gap in the delivery between the healthcare systems at home and in the preferred destination. Historically, healthcare systems have been generally isolated from one another. In today’s globalised world, the gaps have become more obvious and also more bridgeable, hence the growing interest in medical travel.

Why Do International Patients Choose Singapore? In 2006, approximately 410,000 visitors (out Why Singapore? of the 9.7 million visitors to Singapore) • Singapore declared that the primary reason they came to • Patient Services Singapore was for healthcare. They brought along about 86,000 accompanying persons, • Medical Hub who may be parents, caregivers, family • At Home Away From Home members or friends. In addition, some 56,000 visitors who came to Singapore for other • Affordability reasons (eg business, leisure, education, visiting friends and families) also availed themselves of some healthcare while in Singapore. There are many places in the world that have styled themselves as “medical tourism destinations”, but why do these patients choose Singapore over the others? 1 Singapore. For many patients, it is simply because it is Singapore. Through the years, Singapore has built a reputation as a country in which what's promised gets delivered. In 2006, PERC said Singapore's government has the highest integrity in Asia and in 2007, the World Bank ranked Singapore as the world's easiest place to do business. Things work in Singapore and, when it comes to one's health, that is critical. 2 Patient Services. That Singapore’s healthcare services are excellent, safe and trustworthy is not in doubt. It is well demonstrated by clinical indicators (eg intensive care ventilator-associated pneumonia rates which are well below even the USA national rates) and accreditation (Singapore has one third of all JCI-accredited facilities in Asia). With modern buildings (eg Tan Tock Seng Hospital which won an international design award) and the latest medical technology (eg the BrainSuite, Singapore General Hospital’s neurosurgical operating theatre with ensuite MRI, CT and radiotherapy capabilities), the healthcare infrastructure is well developed. Singapore’s healthcare providers operate international patient liaison services that look after the needs of foreign patients, managing everything from visa arrangements, to hotel accommodations, to arrival and send-off, to even leisure activities like visits for the family to the Night Safari.

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3 Medical Hub. Singapore, the multi-faceted medical hub, offers more to patients than other destinations that offer only clinical services. Beyond providing services developed elsewhere, patients have access to cutting-edge procedures and technologies. Many South East Asian, Asian and world “firsts” were developed and performed in Singapore. The supply of medical devices and pharmaceuticals is more assured at the medical hub. Where there is need for economies of scale across multinational firms, key resources tend to be centralised in Singapore. 4 At Home Away From Home. The travelling patient needs not only good clinical care but also a warm and non-threatening environment. Singapore is multi-racial, multireligious and multi-cultural, and well used to accommodating people of diverse cultures from around the world. Singapore is linked by 80 airlines to 180 cities in 157 countries and was ranked first in 2006 by IMD World Competitive Yearbook in the world for quality of air transportation. Mercer Human Resource Consulting ranked Singapore in 2002 as the world’s second safest city. High security and low crime provides not only safety but also the assurance of being safe. Singapore is a major tourist destination, receiving one visitor for every local resident in 2006. Global Country Brand Index ranked Singapore as the world’s second country brands for shopping and for nightlife/dining in 2006. For many patients and their companions, the ability to travel to a country that is comfortable, free from concerns for personal safety and psychological stress is very important. 5 Affordability: Lastly, but to some most importantly, the cost of healthcare in Singapore is not exorbitant. There is a slight premium in the prices for many procedures relative to the prices in Thailand and India, but this premium is happily borne by Singapore’s current international patients. When compared with the prices of equivalent services in the developed world, the prices in Singapore are low. For example, an angioplasty in Singapore is list-priced at about US$13,000, marginally higher than in India but very low compared to the US price of US$57,000. Interestingly, some referral services prefer to send their clients to Singapore because the final bill is smaller because the more efficient facilities are able to discharge the patient sooner and let the patient return to work earlier. Also, in some other destinations, the cost of the hotel stay for the companions surprisingly dwarfs the medical bills. List prices are not good indicators of true costs. Peace of mind. The above five reasons for Singapore as the medical destination of choice come together in the peace of mind that patients and their families get. A time of illness is already in itself a time of high stress, and worrying about possible coups, bombs, riots, muggings and the like is something best avoided. An American visiting Singapore for the first time remarked that Singapore is just like a particular American city, to which an American living in Singapore retorted that Singapore does not have the crime.

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The SingaporeMedicine Initiative In many countries, medical travel is the The SingaporeMedicine Initiative preserve of private healthcare players. • Ministry of Health Governments may announce their support and • Economic Development Board national tourism organisations may generate publicity for the destination, but the real • International Enterprise investment dollars come from the private Singapore sector and the healthcare players are private • Singapore Tourism Board sectors facilities. Singapore’s approach is very different. The entire healthcare industry, • Medical travel industry including the restructured public sector, (healthcare providers, medical welcomes international patients, and the travel agencies) government-industry partnership that is SingaporeMedicine supports the whole industry. The five components of the SingaporeMedicine initiative are as follows: 1 Ministry of Health. As the ultimate purpose of the SingaporeMedicine effort is to serve Singapore’s residents, the Ministry of Health (MOH) provides overall leadership. As regulator and policy maker, it is also responsible for the long-term development of the healthcare industry and manpower capabilities. While individual facilities and government agencies work to maximise returns in their respective missions, it is MOH that provides balance between the many bipolar tensions (eg foreign or local talent/patients/facilities, etc). 2 Economic Development Board. As mentioned earlier, the Economic Development Board (EDB) manages the biomedical/life sciences cluster. EDB promotes inbound investment not only of clinical service providers but also the other facets of the medical hub like the pharmaceutical and medical device industries. EDB complements MOH’s public sector capability and capacity development by assisting the private sector (and to some extent the public sector as well) in like manner, and enables Singapore to go beyond being a mere clinical service provider. 3 International Enterprise Singapore. Another government agency, usually abbreviated as IE Singapore, assists local companies to internationalise and to “help SMEs become MNCs”, so to speak. IE Singapore promotes outbound investment by local healthcare players internationally. Through such projects, Singapore companies have been setting up healthcare facilities in countries like Vietnam, China and India. 4 Singapore Tourism Board. While medical travel is more a part of the healthcare industry than the tourist industry (since leisure is generally not a high priority for people who are sick), the Singapore Tourism Board (STB) has the expertise to facilitate the inbound travel of patients and therefore takes charge of international branding and marketing, and the development of associated people-oriented services like local transport, accommodation, international patient liaison services. Singapore was voted best Medical Travel Destination by Travel Weekly in 2007, an acknowledgement of STB’s work in international marketing. STB also helps the industry collaborate and cooperate through platforms like the SingaporeMedicine Industry Forum and the SingaporeMedicine Industry Roundtable. STB also encourages medical conferences in Singapore. The International Congress & Convention Association has ranked Singapore

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as the top convention city in Asia and second in world for many years, and more than a third of events held in Singapore are healthcare-related. 5 Industry. The most important component of the strategic alliance is naturally the hospitals and healthcare networks that serve the patients and the medical travel agencies that facilitate their visits to Singapore. The healthcare facilities are diverse and range from multi-hospital healthcare networks complete with General Practice clinic networks, to singleton hospitals to even individual medical and dental clinics. The medical travel agencies provide both ground-handling as well as international marketing for their local healthcare partners. Government-industry partnership. To make things work, there needs to be more collaboration than competition. The different players in the SingaporeMedicine partnership have their different roles, under the overall charge of the Ministry of Health, and collectively develop the national medical travel industry to its fullest potential but avoiding the side-effects that other destinations often suffer from.

The SingaporeMedicine Approach Judging from the number of delegations and The SingaporeMedicine Approach enquiries we receive from organisations in • Brand development other countries seeking to develop their own • Channel development medical travel industry, SingaporeMedicine has been the model for many. Through open • Product development sharing of our methodologies and approaches, • Industry development SingaporeMedicine hopes to support the development of the whole medical travel • Outbound services industry, which would develop medical destinations and, more importantly, give patients around the world more choices for their healthcare needs. What does SingaporeMedicine actually do? There are five focus areas. 1 Brand Development: For patients to decide to visit Singapore for healthcare, they must first be informed and then persuaded that the healthcare services in Singapore meet their needs and wants, and that the gap that they perceive in their own healthcare system is adequately met. This is done through public relations work with the media and through appropriate advertising and promotions. The provision of information regarding healthcare services is regulated and constrained in many countries and care has to be taken to stay within acceptable practices. 2 Channel Development: After patients decide that they want to travel to Singapore for healthcare, they may need assistance. This is done by medical travel agencies that are similar to other travel agencies except that they specialise in patients’ travel. Doctors often refer their patients to specific medical specialists in Singapore and are channels in their own right. Lastly, insurance companies and other payors for healthcare services seek the best possible care at reasonable costs for their insured and employees. These include government departments in some countries and corporations in the developed world. Singapore has been a traditional referral destination for expatriates working in the region, but the payors are increasingly looking at sending patients from their home countries for services otherwise unavailable or simply for better cost-control.

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3 Product Development: Because Singapore’s primary driver for medical travel is to obtain sufficient patient volumes to maintain its hard-won excellent medical quality, the main focus for SingaporeMedicine is high-tech and high-complexity services. These include cancer treatment, cardiac services, neurosurgery and orthopaedic surgery. As an industry however, individual healthcare providers offer everything from simple health screening and wellness programmes to quaternary cancer chemotherapy. SingaporeMedicine does not explicitly drive the new trend for aesthetic medicine/surgery but many patients also come to medical spas and dental services that focus more on aesthetics than on curative or preventive services. 4 Industry Development: The international patient is not seeking just excellent healthcare but a total experience. Too many patients have discovered that their surgery was successful and they are back on their feet but the whole trip left a bad taste because of other things that went wrong – rude customer service, insensitive dietary offerings, unsafe city streets, heart-rending beggars. The industry, however accustomed to serving international patients, has to continually learn how to better serve their cross-cultural clients. SingaporeMedicine operates and/or supports several platforms for such local knowledge sharing, including conferences focused on medical travel. STB also supported the establishment of the International Medical Travel Association, the world’s first international society for medical travel which seeks to protect the interests of the medical traveller. 5 Outbound Services: Beyond seeking to bring patients to Singapore, there is the larger effort to internationalise Singapore’s clinical services, consultancy and medical technology. Besides joint participation in international exhibitions, organisations in Singapore (including those beyond the SingaporeMedicine initiative like the Singapore Business Federation and the Singapore Manufacturers Federation) also cooperate in joint trade missions and events. Matching the Market. The above is naturally just a menu of activities from which appropriate combinations are used depending on the market. Not every market has well developed channels, nor do all consumers make their own decisions. As remarked earlier, patients travel for healthcare because of a real or perceived deficiency in the healthcare of their own country, hence the value proposition that needs to be presented varies by market and by market segment. A single marketing approach throughout the world is likely to fail in at least some markets, and may be outright illegal in others.

SingaporeMedicine – Targets & Progress When the original Economic Review Committee published its findings in 2001, the targets set for 2012 was 1 million healthcare visitors and S$2.6 billion in value added to the economy. These numbers represent rough targets rather than hard objectives. In a sense, they were “stretch targets” where the stretching was far more important than the targets themselves. Through the years since the official launch of SingaporeMedicine, the industry has expanded tremendously. From the initial 180 thousand visitors in 2001, the number of visitors specifically for healthcare rose every year to 210, 230 (despite it being the SARS year), 320 , 352 and 410 thousands in the succeeding years until 2006. A measure of the economic contribution is the total tourism receipts generated by the healthcare services, which comprises the total spending by healthcare visitors and their accompanying persons Page 8 of 10

on accommodation, travel (on local carriers), medical services, dining, leisure and course anything else during their stay, and the spending on medical services by visitors for other purposes. In 2004, that came to some S$906 million and rose to S$1,295 million in 2006, an increase of 43 percent over two years. Compared to the 28 percent increase in the number of visitors, this suggests that Singapore is increasingly providing more complex, more expensive services. In 2006, the total tourism receipts attributable to international healthcare services was a significant nine percent of the national tourism receipts. Data comparison with other countries is very difficult because of the different bases and methodologies used. Many countries collect and collate statistics directly from hospitals, which may report number of persons seen each year, or number of separate visits to their premises, or (anecdotally rumoured) even number of counters seen during a single visit (eg clinic, laboratory, pharmacy). Singapore’s visitorship numbers are for trips that may include any number of healthcare encounters. Some do not distinguish clearly between visitors coming for healthcare and their local expatriate population. Assuming that the bases for the numbers do not change from year to year, India, Malaysia and Thailand have all been experiencing double-digit growth in the medical travel industry.

Future Trends So healthcare is changing but what shape will it take? That is hard to predict, just as few would have predicted the extent to which manufacturing and software engineering have shifted to China and India respectively. The realisation that more affordable, accessible or better healthcare is available elsewhere will encourage many to travel for healthcare. In turn, healthcare facilities are considering planting services in other countries. Singapore has the interesting situation of American patients flying to see an American doctor in an American facility in Singapore – so will such scenarios become more common? There will be some disruptive impacts to many healthcare systems. Today, there are grouses that the private sector hospitals in India are catering to the rich international patient while leaving untended their local poor. It can be argued that such investment in healthcare services there is precisely because of the foreign and affluent dollars to be earned, and without the latter there would be no such hospitals for anyone. In other words, the alternate use of the investment in private hospitals for foreign and affluent patients is not in services for the poor but some other industry with better returns. There are complaints in Thailand that doctor staffing in rural Thailand is below 50 percent because of the movement of doctors towards the more lucrative cities and hospitals. There is fear in the United States and in Australia that patients travelling abroad means reduced revenues for the local healthcare providers, though the relative sizes of the healthcare economies suggest that the impact is minimal and possibly smaller than the US year-on-year inflationary increase. When one considers that the entire Singapore healthcare economy is only US$4 billion and the total medical travel trade for Singapore, India, Malaysia and Thailand cannot be very much greater than that value, and contrasting these numbers with the US healthcare economy which is US$2,000 billion a year, there is a distinct possibility of a major supply crunch when Americans start to travel in larger numbers, especially when there are so few JCI-accredited facilities in the world. For Singapore, there is also the need to consider a greater emphasis on outbound services. Today there are nearly half a million visitors for healthcare a year and the nominal target is one million by 2012. By then, there would be one incoming patient for Page 9 of 10

every five locals. How far can this number grow? The true future of Singapore healthcare could be outbound serving the world, although that is not without its problems. For example, if Singapore’s healthcare providers send current staff to overseas services, they run the risk of depleting their local talent. On the other hand, foreign talent can be recruited to fill the gaps, and that provide Singapore’s local talent with a leavening of international experience and wisdom. The world is flat and getting increasingly flatter. Patients, professionals and providers are seeing farther and travelling more frequently. From being one of the most protected and least international of industry sectors, healthcare is globalising and rapidly becoming a very different world. Our only choice, it seems, is what role we will play.

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