International Demand for Medical Tourism in Malaysia: Evidence from Panel Data

  • Norsiah Kadir Faculty of Business and Management, Universiti Teknologi MARA
  • Sabri Nayan School of Economics, Finance and Banking, Universiti Utara Malaysia
Keywords: Macroeconomic variables, medical tourism, Pooled Mean Group, SRI

Abstract

The present paper attempts to investigate the significance influence of some selected economic variables on the international demand for medical tourism in Malaysia by utilizing Pooled Mean Group (PMG)/Autoregressive Distributed Lag (ARDL) model based on panel data set of ASEAN-4 countries spanning from 2001 to 2017. Findings of the study indicate that the price of medical tourism, travelling cost, real per capita income, exchange rate and health expenditure are statistically significant in influencing international demand for medical tourism in Malaysia for both long run and short run. Moreover, price of tourism in the substitute destination (Indonesia) and inflation are also statistically significant in determining international demand for medical tourism in Malaysia in the short run. The findings are in line with the economic theory. Therefore, to attract more international medical tourists, Malaysia needs to maintain it price competitiveness relative to other substitute destinations in the region, reduce the transport cost as well as improve the quality of medical services provided. Besides, private operators and market participants should influence necessary changes in medical tourism framework to ensure that services are effective and efficient. Ultimately, market players in medical tourism sector should practice Sustainable Responsible Investment (SRI) with aim to stabilize between medical tourism development and social responsibility.

References

Alberti, F. G., Giusti, J. D., Papa, F., & Pizzurno, E. (2014). Competitiveness policies for medical tourism clusters: government initiatives in Thailand. International Journal of Economic Policy in Emerging Economies, 7(3), 281-309. https://doi.org/10.1504/IJEPEE.2014.065252

Afthanorhan, A., Awang, Z., Salleh, F., Ghazali, P.L., & Rashid, N. (2018). The effect of product quality, medical price and staff skills on patient loyalty via cultural impact in medical tourism. Management Science Letters, 8(12), 1421-1424. https://doi.org/10.5267/j.msl.2018.10.004

Awang, Z., Afthanorhan, A., & Mohamad, M. (2015). An evaluation of measurement model for medical tourism research. The confirmatory factor analysis approach. International Journal of Tourism Policy, 6(1), 29-45. https://doi.org/10.1504/IJTP.2015.075141

Beladi, H., Chao, C-C., Ee, M. S., & Hollas, D. (2019). Does Medical Tourism Promote Economic Growth? A Cross-Country Analysis. Journal of Travel Research, 58(1), 121-135. https://doi.org/10.1177/0047287517735909

Bookman, M. Z., & Bookman, K. R. (2007). Medical tourism in developing countries. New York: Palgrave Macmillan. https://doi.org/10.1057/9780230605657

Cameron, K., Crooks, V. A., Chouinard, V., Snyder, J., Johnston, R., & Casey, V. (2014). Motivation, justification, normalization: Talk strategies used by Canadian medical tourists regarding their choices to go abroad for hip and knee surgeries. Social Science and Medicine, 106, 93-100. https://doi.org/10.1016/j.socscimed.2014.01.047

Chandran, S. D., Mohammed, A. H. P., Zainuddin, A., Puteh, F., & Azmi, N. A. (2017). Medical Tourism: Why Malaysia is a preferred destination? Advanced Science Letters, 23(8), 7861-7864. https://doi.org/10.1166/asl.2017.9595

Chandran, S. D., Puteh, F., Zainuddin, A., Azmi, N. A., & Wong, W. K. (2018). Key drivers of medical tourism in Malaysia. Journal of Tourism, Hospitality and Culinary Arts, 10(1), 15-26.

Chinai, R., & Goswami, R. (2007). Medical visas mark growth of Indian medical tourism. Bulletin of the World Health Organization, 85(3), 164-165. https://doi.org/10.2471/BLT.07.010307

Cohen, I. G. (2010). Protecting patients with passports: Medical tourism and the patient-protective argument. Iowa Law Review, 95(5), 1467-1567.

Connell, J. (2013a). Contemporary medical tourism: Conceptualisation, culture and commodification. Tourism Management, 34, 1-13. https://doi.org/10.1016/j.tourman.2012.05.009

Connell, J. (2013b). Medical tourism in the Caribbean Islands: A cure for economics crisis? Island Studies Journal, 8(1), 115-130.

Crooks, V. A., Turner, L., Snyder, J., Johnston, R., & Kingsbury, P. (2011). Promoting medical tourism to India: Messages, images, and the marketing of international patient travel. Social Science and Medicine, 72(5), 726-732. https://doi.org/10.1016/j.socscimed.2010.12.022

Dang, H.-S., Nguyen, T.-M. T, Wang, C.-N., Day, J.-D., & Dang, T. M. H. (2020). Grey system theory in the study of medical tourism industry and its economic impact. International Journal of Environmental Research and Public Health, 17(961), 2-23. https://doi.org/10.3390/ijerph17030961

Dawn, S. K., & Pal, S. (2011). Medical tourism in India: Issues, opportunities, and designing strategies for growth and development. International Journal of Multidisciplinary Research, 1(3), 185-202.

Dritsakis, N. (2004). Cointegration analysis of German and British tourism demand for Greece. Tourism Management, 25(1), 111-119. https://doi.org/10.1016/S0261-5177(03)00061-X

Gan, L. L., & Frederick, F. R. (2015). Medical tourism: Consumers' concerns over risk and social challenges. Journal of Travel and Tourism Marketing, 32(5), 503-517. https://doi.org/10.1080/10548408.2014.918923

Gan, L. L., & Frederick, J. R. (2011). Medical tourism in Singapore: A structure-conduct-performance analysis. Journal of Asia-Pacific Business, 12(2), 141-170. https://doi.org/10.1080/10599231.2011.558440

Garín Muñoz, T. (2007). German demand for tourism in Spain. Tourism Management, 28(1), 12-22. https://doi.org/10.1016/j.tourman.2005.07.020

Goodrich, J. N., & Goodrich, G. E. (1987). Health-care tourism - an exploratory study. Tourism Management, 8(3), 217-222. https://doi.org/10.1016/0261-5177(87)90053-7

Hanefeld, J., Smith, R., Horsfall, D., & Lunt, N. (2014). What do we know about medical tourism? A review of the literature with discussion of its implications for the UK National Health Service as an example of a public health care system. Journal of Travel Medicine, 21(6), 410-417. https://doi.org/10.1111/jtm.12147

Haque, A., Yasmin, F., & Anwar, N. (2018). Factors Determinant of Patients' satisfaction toward health tourism in Malaysia. International Tourism and Hospitality Journal, 1(1), 1-18.

Heung, V. C. S., Kucukusta, D., & Song, H. (2010). A conceptual model of medical tourism: implications for future research. Journal of Travel & Tourism Marketing, 27(3), 236-251. https://doi.org/10.1080/10548401003744677

Hopkins, L., Labonté, R., Runnels, V., & Packer, C. (2010). Medical tourism today: what is the state of existing knowledge? Journal of Public Health Policy, 31(2), 185-198. https://doi.org/10.1057/jphp.2010.10

International Living. (2019). The 6 countries with the best healthcare in the world 2019. https://www.prweb.com/releases/the_6_countries_with_the_best_healthcare_in_the_world_2019_internationalliving_com/prweb16049883.htm

John, S. P. (2017). An analysis of the social media practices for sustainable medical tourism destination marketing. International Journal of Tourism Policy, 7(3), 222-249. https://doi.org/10.1504/IJTP.2017.086965

Johnston, R., Crooks, V. A., Adams, K., Snyder, J., & Kingsbury, P. (2011). An industry perspective on Canadian patients' involvement in medical tourism: implications for public health. BMC Public Health, 11(416), 1-8. https://doi.org/10.1186/1471-2458-11-416

Johnston, R., Crooks, V. a, Snyder, J., & Kingsbury, P. (2010). What is known about the effects of medical tourism in destination and departure countries? A scoping reviews. International Journal for Equity in Health, 9(1), 24. https://doi.org/10.1186/1475-9276-9-24

Johnston, R., Crooks, V. A., Snyder, J., & Whitmore, R. (2015). The major forces that need to back medical tourism Were … in alignment: Championing development of barbados's medical tourism sector. International Journal of Health Services, 45(2), 334-352. https://doi.org/10.1177/0020731414568512

Klijs, J., Ormond, M., Mainil, T., Peerlings, J., & Heijman, W. (2016). A state-level analysis of the economic impacts of medical tourism in Malaysia. Asian Pacific Economic Literaturen. https://doi.org/10.1111/apel.12132

MacReady, N. (2007). Developing countries court medical tourists. Lancet, 369(9576), 1849-1850. https://doi.org/10.1016/S0140-6736(07)60833-2

Mahjom, N., Alias, N. M., & Zulkifli, N. F. (2011). Critical success factors for bumiputera/Muslim medical tourism providers: Solution for financing needs using Islamic financing instruments. Persidangan Kebangsaan Ekonomi Malaysia Ke VI (PERKEM VI), 2, 184-195.

Malaysia Healthcare Travel Council. (2020). Official Website Malaysia Healthcare Travel Council. https://www.mhtc.org.my/statistics/

Medhekar, A., & Haq, F. (2010). Halal Branding for Medical Tourism. Emerging Research on Islamic Marketing and Tourism in the Global Economy, 160-189. https://doi.org/10.4018/978-1-4666-6272-8.ch008

Mosammam, H. M., Sarrafi, M. & Nia, J. T. (2019). Measuring the competitiveness of Iran's health tourism. International Journal of Tourism Policy, 9(3), 201-221. https://doi.org/10.1504/IJTP.2019.104875

Mugerauer, R. (2006). A new type of medical tourism emerges: real physical change, neither hyper-virtual nor traditional-colonializing. Traditional Dwellings and Settlements Review, 18(1), 16-17.

Musa, G., Thirumoorthi, T., & Doshi, D. (2012). Travel behaviour among inbound medical tourists in Kuala Lumpur. Current Issues in Tourism, 15(6), 525-543. https://doi.org/10.1080/13683500.2011.626847

Ormond, M., & Sulianti, D. (2014) More than medical tourism: Lessons from Indonesia and Malaysia on South-South intra-regional medical travel. Current Issues in Tourism, 20(1), 94-110. https://doi.org/10.1080/13683500.2014.937324

Pagan, R., & Horsfall, D. (2020) Medical tourism markets: Models of Sustainability. The case of Spain and the Costa del Sol (Malaga). Sustainability, 12, 2-17. https://doi.org/10.3390/su12218818

Pesaran, M. H., Shin, Y., & Smith, R. P. (1999). Pooled Mean Group estimation of dynamic heterogeneous panels. Journal of the American Satistical Association, 94(446), 621-634. https://doi.org/10.1080/01621459.1999.10474156

Ramírez de Arellano, A. B. (2007). Patients without borders: The emergence of medical tourism. International Journal of Health Services: Planning, Administration, Evaluation, 37(1), 193-198. https://doi.org/10.2190/4857-468G-2325-47UU

Reddy, S. G., York, V. K., & Brannon, L. A. (2010). Travel for treatment: Students' perspective on medical tourism. International Journal of Tourism Research, 12(5), 510-522. https://doi.org/10.1002/jtr.769

Sarwar, A. (2013). Medical tourism in Malaysia: Prospect and challenges. Iranian Journal of Public Health, 42(8), 795-805.

Smith, P. C., & Forgione, D. A. (2007). Global outsourcing of healthcare: A medical tourism decision model. Journal of Information Technology Case & Application Research, 9(3), 19-30. https://doi.org/10.1080/15228053.2007.10856117

Smith, R., Alvarez, M. M., & Chanda, R. (2011). Medical tourism: A review of the literature and analysis of a role for bi-lateral trade. Health Policy, 103(2-3), 276-282. https://doi.org/10.1016/j.healthpol.2011.06.009

Sobo, E. J. (2009). Medical travel: What it means, why it matters. Medical Anthropology, 28(4), 326-335. https://doi.org/10.1080/01459740903303894

Song, H., Wong, K. K. F., & Chon, K. K. S. (2003). Modelling and forecasting the demand for Hong Kong tourism. International Journal of Hospitality Management, 22(4), 435-451. https://doi.org/10.1016/S0278-4319(03)00047-1

Tang, C. F., & Abdullah, A. S. N. (2018). Can inbound medical tourism boost Malaysia's economic growth? Tourism and Hospitality Research, 18(4), 505-513. https://doi.org/10.1177/1467358416682069

Tang, C. F., & Lau, E. (2017). Modelling the demand for inbound medical tourism: The case of Malaysia. International Journal of Tourism Research, 19(5), 1-10. https://doi.org/10.1002/jtr.2131

Tourism Malaysia. (2020). Malaysia Tourism Key Performance Indicators 2019. Kuala Lumpur: Tourism Malaysia. https://www.tourism.gov.my/files/uploads/KPI2019-web-nov2020.pdf

Tourism Malaysia. (2020). Malaysia Profile of Tourists by Selected Markets 2019. Kuala Lumpur: Tourism Malaysia. http://mytourismdata.tourism.gov.my/wp-content/uploads/2020/11/Tourism-Profile-2019.pdf

Vijaya, R. M. (2010). Medical tourism: Revenue generation or international transfer of healthcare problems? Journal of Economic Issues, 44(1), 53-69. https://doi.org/10.2753/JEI0021-3624440103

Wongkit, M., & McKercher, B. (2015). Desired attributes of medical treatment and medical service providers: A case study of medical tourism in Thailand. Journal of Travel & Tourism Marketing, 33(1), 1-14. https://doi.org/10.1080/10548408.2015.1024911

Ye, B. H., Qiu, H. Z., & Yuen, P. P. (2011). Motivations and experiences of Mainland Chinese medical tourists in Hong Kong. Tourism Management, 32(5), 1125-1127. https://doi.org/10.1016/j.tourman.2010.09.018

York, D. (2008). Medical Tourism: The Trend Toward Outsourcing. Journal of Continuing Education in the Health Profession, 28(2), 99-102. https://doi.org/10.1002/chp.165

Yu, J. Y., & Ko, T. G. (2012). A cross-cultural study of perceptions of medical tourism among Chinese, Japanese and Korean tourists in Korea. Tourism Management, 33(1), 80-88. https://doi.org/10.1016/j.tourman.2011.02.002

Yusof, N., & Rosnan, H. (2020). Through the eyes of medical tourism: service culture in Malaysia and Thailand. Journal of ASIAN Behavioural Studies, 5(15), 49-51. https://doi.org/10.21834/jabs.v5i15.344

Zailani, S., Ali, S. M., Iranmanesh, M., Moghavvemi, S., & Musa, G. (2016). Predicting Muslim medical tourists' satisfaction with Malaysian Islamic friendly hospitals. Tourism Management, 57, 159-167. https://doi.org/10.1016/j.tourman.2016.05.009

Zion Market Research. (2021). Medical Tourism Market - Global Industry Analysis. https://www.zionmarketresearch.com/report/medical-tourism-market

Published
2021-12-17
How to Cite
Norsiah Kadir, & Sabri Nayan. (2021). International Demand for Medical Tourism in Malaysia: Evidence from Panel Data. International Journal of Business and Society, 22(3), 1240-1255. https://doi.org/10.33736/ijbs.4298.2021