Which is the better model: BDMS or Bumrungrad?
This week we conclude our investigation of the Thai healthcare industry. Without doubt, a fascinating market with huge growth potential, that is now spilling over into the greater ASEAN region. One feature that is unique to the country is the sheer quantity of listed hospital groups – 13 at our latest count. And amongst the crowd, there are two that stand out.
BDMS is the dominant force in the market with 37 hospitals, 6,521 beds and $1.6bn annual revenue. It is strong in Bangkok, but has also moved out of the capital. In all truth, it is strong everywhere, and caters to everyone, middle class and up. The model: buy up everything, everywhere; integrate these hospitals into the group’s network; leverage on scale; and process patients across its own mini healthcare system complete with specialist hospitals, insurance and suppliers.
Counter this with Bumrungrad. Its ambition is to be the Mayo Clinic of Asia and it has a very different vision of private healthcare, shielded from competition with the public systems. Its market is primarily high-end medical tourism, with patients coming from across the world. Americans are attracted by the price – many of them may not be insured – and Burmese by quality. But where is the medical tourism market going? If you want to evaluate Bumrungrad’s unique strategy, then that is what you must ask.
In one sense they look strong: elites have travelled for healthcare for a long time and will continue to do so. The middle classes are more easily domesticated! As healthcare systems develop across ASEAN – Siloam is already putting $1bn into Myanmar – whole strata of society will shift consumption from Thailand to local groups, but Bumrungrad may be protected as the hospital of choice for ASEAN elites. Then again hospitals in Singapore will argue it never has been and never will. Medical tourism may be a whole series of niche markets, but few present easy pickings.
Again, Bumrungrad can say it is targeting the whole world, not just its neighbours. And will point to its shift away from the Gulf market as evidence of its adaptability. Thailand has also benefited from an attractive combination of price, quality and geography. We could discuss the future of these variables well into the night, but suffice to say if it can defend two it will be fine. For now the group is making vast profits and appears to have successfully diversified risk. In any case, are the visions of BDMS and Bumrungrad mutually exclusive? Probably not.
We would welcome your thoughts on this story. Email your views to Max Hotopf or call 0207 183 3779.
