Thailand hospitals poised for further expansion
More cash from the past three years, medical tourism, and high-intensity care to prop up expansion.
- Hospitals hold more cash from epidemic treatment and vaccination revenue.
- Geopolitical conflicts in Myanmar, Russia cause residents to seek long-term stay in Thailand.
- Expansion into high-intensity areas such as cancer care is a revenue opportunity.
Thailand’s hospitals are likely to continue growing after the pandemic as they have more cash from providing Covid care, a potential increase in medical tourism, and their expansion to high-intensity areas such as cancer care and stroke treatments.
Hospitals in Thailand have seen balance sheets improve over the last three years. Incoming cash from Covid treatment and vaccinations were used to repay debt and fuel expansion. A number of hospitals have outlined more aggressive buildout plans over the next five years, which should lift operational beds. Among the four hospital groups we track, we forecast the number of beds to increase 18% to almost 11,000 by 2028 and revenue to expand at an average compounded annual growth rate of 7.8% from 2023 to 2028.
Hospitals are increasing capacity in areas where they have limited operations, or less exposure than peers, such as via technology upgrades and purchase of new equipment. Some are also diversifying their revenue sources for growth and increased business resilience. For example, some mid-tier hospitals are opening cancer treatment centers this year to boost revenue as cancer is currently the leading cause of death in Thailand, with the number of patients increasing over the past decade. Another trend is to increase exposure to higher ticket treatments in low intensity services such as wellness and aesthetics.
The ongoing geopolitical tensions are a tailwind for Thailand’s medical tourism industry. Foreigners would be a relatively high revenue growth contributor to the hospital sector as residents of countries experiencing political strife turn to the Southeast Asian nation for extended vacations or even permanent relocation. People from Myanmar and Russia are snapping up residential housing in Thailand as a result of geopolitical tensions, while more travellers from Saudi Arabia are visiting the country following a restoration of diplomatic ties with Thailand in January 2022. Chinese and Indians are also purchasing housing for long stays, although geopolitical risks are unlikely to be a prime driver.
All of these factors could accelerate the growth of the Thai hospital sector, in addition to the pre-Covid organic growth drivers that already existed: higher healthcare expenditure for its aging population, its growing social security scheme, and the expanding medical tourism market.
As a proportion of total population, Thailand has the second-highest number of people over 65 years in Southeast Asia, behind Singapore. The country’s Social Security Office is also reimbursing some private hospitals to provide treatment for critical diseases such as stroke and breast cancer.
Thailand as a top tourist destination could also encourage medical travelers and their companions to spend leisure time in the country and undergo treatment at local hospitals. Additionally, the country has more medical specialists, with the number of new specialist certificates granted rising to more than 3,000 in 2022 from 2,400 in 2017, which should support Thailand’s capability to provide treatment for complex diseases.
For more on Thailand hospitals, read our full report.
Contributor
Thanatcha Jurukul
Thailand Healthcare & Consumer-related analyst
Umang Parekh
Thailand Healthcare & Consumer-related analyst
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