Bumrungrad Hospital Pcl, Thailand’s second-largest hospital operator, is looking for opportunities to expand in Vietnam, Myanmar and China, after a domestic political crisis prompted it to cut its revenue target this year.
The high-end hospital operator cut its 2014 revenue growth target to between 7 and 10 percent from 10 to 15 percent, in the wake of months of political unrest, CEO Dennis Brown told reporters on Thursday.
The move comes after the company’s foreign patients, who account for about 60 percent of revenue, fell 12 percent for outpatients and 8 percent for inpatients in the first half of 2014.
“We anticipate … between 7 to 10 percent growth this year. Normally, we expect 10 to 15 percent growth,” Brown said, adding that Bumrungrad had began foreign expansion after Asia’s financial crisis in 1997, when domestic demand softened.
Myanmar, the company’s largest market outside Thailand, accounted for about 7 percent of revenue, while Middle East countries were in the top five in terms of foreign patients.
Brown said Bumrungrad has long been keen to invest in China although he was concerned about the availability of doctors because many continued to work with public hospitals.
“The biggest problem in China right now is the doctor availability. They recently allowed doctors to practice at more than one location. We have not yet seen doctors moving out from the public sector to the private sector,” Brown said.
China will allow foreign investors to wholly own hospitals in seven cities and provinces, further opening up the country’s fast-growing private hospital sector.
Vietnam also has a problem about availability of doctors, while Myanmar needed to develop infrastructure, he said without giving details about needed investment.
Bumrungrad, which acquired a 41 percent stake in a hospital in Mongolia in March, has cash of about 6 billion baht and has set a budget of about 600 million baht a year to spend on equipment replacement and new machines, he said.
Healthcare spending in southeast Asia is expected to rise in the long term, driven by growing populations, higher incomes and ageing people, Brown said.
The population above 65 years old in southeast Asia is forecast to reach 36 million by 2020, from 25 million in 2010, analysts have said, adding Thai hospitals are likely to benefit from steady demand for medical tourism in Thailand. ($1 = 31.88 Baht)
Editing by David Holmes)
By Khettiya Jittapong