MARKET SUMMARY REPORT HEALTHCARE TRENDS (CONT’D) Health tourism, which currently accounts for around 4-6% of the country’s total tourism revenue (sourced from Malaysia Healthcare Travel Council) is expected to exceed current levels, due to the attractive pricing, strategic location, and quality of medical services available. The recent announcement for visa-free travel for citizens from China and India acts as a boost to attract inbound health tourists from these countries. Budget 2024 also included an allocation of RM200m to refer patients from public to private hospitals, potentially contributing to additional upsides to top line growth in the private healthcare sector. There are downsides which distort the healthcare industry, such as expansion delays, supply constraints of medical professionals which would cap operational bed numbers. The rising costs of human capital, energy and medical supply would also erode operating margins. However, unprecedented travel restrictions imposed if cases worsen would cut into health tourism and patient numbers, dampening the local healthcare industry growth. Globally, access to care is linked to affordability. As healthcare costs increase, the affordability of care also depends on investments in health and health systems. With public debt reaching a record of US$92 trillion in 2022, developing countries are allocating more funds for debt interest payments than for healthcare and education. The number of countries experiencing high debt levels escalated from 22 in 2011 to 59 in 2022. Approximately 3.3 billion people, or nearly half the global population, now reside in countries where healthcare investment is overshadowed by debt service, particularly in certain developing nations in Africa, Latin America, and Asia (excluding China). Worldwide, healthcare providers can incorporate steps to address inequities which limits access and affordability to healthcare, these include: If healthcare industry players are willing to further narrow the affordability gap in healthcare by incorporating the steps into their policies, focusing less on commercial gains and more on enhancing access and affordability, growth is likely to ensue. This strategic shift towards prioritising public health needs over profit can lead to sustainable development and expansion in the healthcare sector. Extracted from: 1. Maybank: Malaysia Outlook and Lookouts, 2024 2. International Trade Administration: Market Overview, 2024 3. New Straits Times: Health Experts Say Malaysia Prepared For New Wave of Covid-19, 2023 4. Malaysia’s Ministry of Health: Covid Dashboard, 2023 5. Deloitte: Global Health Care Sector Outlook, 2024 • Collaborating to influence multiagency action such as with integrated care systems; • Conducting quality improvement programs focused on health equity; • Leveraging their position as an anchor institution in their vicinity or community; • Promoting targeting of health care delivery to meet regional needs and explicitly aim to lessen health care inequalities; or • Integrating health equity-focused approaches through advocates across initiatives. 21 BUSINESS OVERVIEW 1 3 4 5 6 AL-`AQAR HEALTHCARE REIT ANNUAL REPORT 2023
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