PHNOM PENH -- The current glow of medical tourism is not stopping Southeast Asian hospitals from thinking about future business. Many are looking beyond their borders in the search for new sources of revenue.
Bangkok Dusit Medical Services, Thailand's largest private hospital operator, recently opened its third institution in the only foreign country that it operates in, Cambodia. The new eight-story Royal Phnom Penh Hospital stands out on the dilapidated road leading from Phnom Penh airport into the city center.
White marble floors, glimmering walls and a high ceiling create the feel of a hotel lobby.
However, the Royal Phnom Penh is not targeting tourists. Eighty percent of its patients are Cambodian. Expats and diplomats in the country account for most of the rest.
"We target the rich locals who used to fly to Thailand, Singapore or France for medical services and the middle class that went to Vietnam," said Somarch Wongkhomthong, director of the Royal Phnom Penh Hospital. "Many of these people have been to Thai hospitals and know the standard there, so they will come if we open close to them," he added.
The Thai hospital operator's $50 million investment in its new Cambodian hospital is meant to establish a strong presence as the country continues to grow.
The 100-bed hospital has brought world-class equipment to Cambodia, such as a 128-slice dual-source CT scanner.
Ork Sokunthea, 32, works for a Thai company in Phnom Penh. She recently came to Royal Phnom Penh with a head injury. Ork had usually gone to Thailand for medical examinations but decided to go to the local hospital after learning they had the best CT scanner in Cambodia. She saved on travel and all of her $162.80 bill was covered by her company. "I trust Thai doctors much more than Cambodian ones," she said.
The hospital has 40 international doctors, around half of whom are Thai. There are also doctors from the U.S., Switzerland and France. Nurses are local but are bilingual or trilingual.
BDMS currently operates 40 hospitals with nearly 7,000 beds under six brands. It is set to have 50 hospitals by the end of the year, according to Group Chief Operating Officer and Executive Vice President Chatree Duangnet.
The company has established a hub-and-spoke model for its hospital brands. Large hospitals act as hubs, providing cutting-edge medical equipment and doctors, with patients being referred from smaller hospitals in the group.
Some doctors at the Royal Phnom Penh are rotated between Bangkok Hua Hin Hospital and other group facilities.
"Our main focus will be ASEAN" said Chatree. Myanmar and Laos could easily refer patients to Thai hospitals. Yunnan Province in southern China is also conveniently located and a possible source of patient referrals.
Effective use of resources has led to a remarkable net profit margin of 11.9%, the highest among listed private hospitals anywhere in the world.
Malaysia's IHH Healthcare, the largest private hospital operator in Southeast Asia in terms of market capitalization and revenue, is also branching out. It has opened facilities in emerging economies, targeting the wealthy. It now operates 37 hospitals globally, including key markets such as neighboring Singapore, and Turkey, also a Muslim nation.
While Southeast Asia remains at the top among medical tourism destinations, the focus could change in the future. Josef Woodman, CEO of U.S.-based publisher Patients Beyond Borders predicts that countries such as China will soon start offering health services at much cheaper prices. "China does not like losing patients to other countries."
"In 20 years we will see a dramatic drop in medical tourists travelling for lower costs," he said. "Access to specialties that a country could offer such as special instrumentation will keep them travelling," he said.
Nikkei staff writer CK Tan in Kuala Lumpur contributed to this article.