Slowdown in medical tourism
Natural disasters or an escalation in political unrest would hurt medical tourism, thereby reducing
the number of foreign patients.
Erosion of purchasing power among patients
A slowdown in the domestic economy would erode patients’ purchasing power, prompting some
to opt for local or less-expensive private hospitals or to join the Social Security scheme. In
contrast, strong economic growth would boost patients’ purchasing power, leading to higher
expenditure on private healthcare products and services.
Under-utilization of costly technology
Investing in the latest medical technology and equipment is a critical part of the BH’s efforts to
meet international standards and compete with rival medical hubs in Asia such as Singapore and
India. However, lower than expected utilization of new medical technology could lead to higher
costs and hurt margins.
Operational risk from opening new hospitals
BH’s new greenfield project presents challenges in terms of managing costs and generating
satisfactory profits. Rising competition in healthcare segment is a key concern, particularly when
hospitals are targeting the same market segment. This could lead to downward pressure on prices
and margins.
Staff shortages present challenges
Another major concern is an increase in labour costs due to expansion of private hospitals and
ongoing shortages of doctors and nurses. After the ASEAN Economic Community (AEC) is launched
in 2015, we expect medical workers will have greater job opportunities since there is a shortage
of qualified medical staff in the ASEAN region. Hospitals may need to increase employees’
salaries, which would increase cost pressures and dampen earnings.