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Thai hospitals take big bet on China's 'two-child policy'

Medical tourism revenues expected to surge as couples flock to fertility clinics

Chinese babies in a private hospital in Thailand. More Chinese couples are expected to come to Thailand for fertility treatments after Beijing relaxed its "one-child policy."   © Reuters

BANGKOK -- China's "two-child policy" has created increased opportunities for Thai private hospitals as thousands of Chinese couples flock to Thailand for fertility services. They are forecast to collectively spend billions of dollars on such treatments over the coming years.

Phayathai 2 International Hospital, a private hospital in Bangkok, has recently built a new ward for in vitro fertilization -- the process of fertilization outside the body -- and a fertility clinic. It is expected to start commercial operations by the end of the year.

The reason for this new ward is clear: more Chinese clients.

Dr. Theerayut Jongwutiwes, the IVF and fertility expert at Phyathai 2, said the hospital is now dealing with around 30 to 35 couples a month, against 20 to 25 couples in the previous year, due to its active marketing approach. The hospital started moving into the Chinese market as early as 2014 by holding a roadshow in the southeastern city of Shenzhen.

"We expect the number of Chinese couples coming for IVF services to reach 50 couples a month by next year," said Theerayut.

The Chinese government stuck to a one-child policy for generations in order to keep its population total under control. But in 2015 the government decided to gradually ease the policy to increase the birth rate in order to have a sufficient workforce to drive the country's growth in the coming decades.

But the timing has put pressure on some middle-aged couples, as the chances of conceiving declines with age while the risk of having babies with birth defects increases.

That has created greater opportunity for Thai private hospitals, like Phayathai 2, to capitalize on the strong demand from wealthier Chinese couples who are willing to pay more in order to have a second child by using IVF techniques in Thailand. Chinese people visiting Thai hospitals are not yet among the top five international clients, but the potential is there.

Another hospital chain which aims to tap into rising Chinese IVF demand is Thonburi Healthcare Group Public Company. It has already built a new building in Bangkok to welcome more Chinese couples.

Dr. Boon Vanasin, the founder and chairman of the group, said: "With high medical standards and cheaper costs we are confident that more and more Chinese married couples will come, and that could also help increase total tourism revenues as they are expected to spend more time and money in other tourist destinations in Thailand."

He said the charges in Thailand for fertility services are around 40% cheaper than in Japan, the U.S. and Singapore.

Since couples can save money on the IVF process, that would encourage them to spend more on other services such as spa, wellness and anti-aging services available in the hospital, Boon said.

Some critics say that China's two-child policy is not yet having much effect. Many Chinese couples do not want to have a second child because of the rising costs of nurturing them. But even a small rise in the percentage of Chinese who wish to try for a second child, given the population of China, is expected to create rising revenues for countries such as Thailand.

The Tourism Authority of Thailand is collaborating with hospitals in a marketing strategy to attract more Chinese couples to come to Thailand, not only for fertility clinic services but also for other medical services.

The authority helps set up IVF promotional campaigns in major cities in China, including Beijing, Guangzhou, Kunming, Chengdu and Sichuan.

Newborn babies in a hospital in Bangkok: Thai sources claim their fertility clinics are competitive in success rate and cost.    © Reuters

"Our TAT offices in those five major cities will be working with the Borderless Healthcare Group in promoting Thai medical tourism, particularly fertility services," said Thapanee Kiatphaibool, executive director for tourism product at the authority. BHG is a global healthcare consulting company.

"Since Thailand is the top hit destination among Chinese, we set a target of up to 90 million couples that are expected to visit Thailand for medical tourism, particularly for fertility clinic services," said Thapanee. She added that the target of 90 million couples remains a conservative one given the size of the Chinese population.

For 2018, the TAT has set a target for total tourism revenue to grow 10% to 3.1 trillion baht ($94.7 billion), from more than 35 million tourists. That accounts for 20% of the country's gross domestic product.

Of the total 35 million tourists, around one third or 8.8 million are Chinese, according to the authority.

The Kasikorn Research Center forecast that around 630,000 to 650,000 Chinese tourists are going to have medical or wellness treatments outside China in 2018. Of that total, some 40,000 Chinese medical tourists are expected to come to Thailand.

Doctors and IVF specialists say the cost of IVF and fertility services in Thailand is more competitive than in other countries in the Asia-Pacific region.

According to the TAT and doctors, the cost of IVF in the country ranges from 400,000 to 800,000 baht per time. Of the upper total, around 500,000 baht goes on charges for the treatment, while the rest would be spending on wellness and other tourist-related services.

That will help create additional revenue of at least 20 billion baht, or $611 million, this year.

"Some Chinese couples could spend up to 1 million to 1.2 million baht if they want to travel to famous towns in Thailand during the time they are waiting for the next medical appointment at the hospital," said a senior TAT official.

China's IVF success rate is around 20%, while the success rate in Thailand is around 60%, according to the TAT.

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