KUALA LUMPUR (Nikkei Markets) -- Malaysia has shortlisted nine health care facilities under its so-called medical tourism hospital program in a bid to draw more foreigners to the country's highly-lucrative health care services.
Ramsay Sime Darby Subang Jaya Medical Center, operated by a joint venture of Malaysian conglomerate Sime Darby and Australia-based Ramsay Health Care, and IHH Healthcare's Gleneagles Penang are among the nine shortlisted hospitals, Finance Minister Lim Guan Eng said at an industry conference on Tuesday.
"We will look into acknowledging qualified Malaysian private hospitals who are establishing themselves as flagship hospitals for health care travel," he said. "The Malaysian government will be lending our efforts in further facilitating and enabling these hospitals to grow beyond borders."
The remarks came ahead of the next year's federal budget, which Lim will announce on Oct. 11.
Private hospital operators are increasingly ramping up efforts to cater to millions of tourists from the West and the Middle East, a growing pool who travel to India, Thailand, Malaysia and other select Asian cities seeking lower-cost medical treatment.
Last week, IHH Healthcare announced a plan to spend 1.02 billion ringgit ($243.90 million) in cash to acquire Prince Court Medical Centre that mainly operates in Kuala Lumpur's Golden Triangle area, a hub of shopping and entertainment popular with foreigners in the capital city.
In 2018, Malaysia raked in about $350 million from more than a million foreign patients who flocked in for treatments ranging from heart bypass surgeries to hip replacements, at a fraction of cost of such services in the U.S. By 2020, revenue from this sunrise industry could rise to $678 million, the government forecasts.
In addition, the sector could generate as much as $1.44 billion to the economy once indirect spending on food, accommodation and cosmetics are also taken into account, according to Malaysia Healthcare Travel Council.
The ministry of finance is also in talks with the health ministry to raise the number of private operators in health care segment to help boost competition and lower the cost of medical services, Lim said.
"We hope to drive down cost with increasing competition," he said. "We give a lot of incentives but we find the cost of these medical treatments keeps going up."
Health care service in the Southeast Asia's third-largest economy runs on a two-tier system that consists of a heavily subsidized public sector frequented by the lower-income group, and the private sector that caters to the relatively wealthier patients or those covered by insurance.
Medical inflation however surged 15.3% in 2018, an Aon survey showed. That was the second-highest rate in Asia and markedly above the region's average of 8.9%. Malaysia is grappling with an aging population, weighed under a slew of lifestyle diseases and nearly half of the adults are obese or overweight.
--Yimie Yong and Jason Ng