Find out why Raffles Med is unruffled by Singapore’s hospital bed supply surge

It caters to a different demographic.

Raffles Medical Group remains confident of its prospects despite the expected surge in available public hospital beds in coming months.

A report by Maybank Kim Eng said that although 1,528 beds are expected to come on stream in 2015 from three new public hospitals, these cater to a different clientele and will not be a key threat to Raffles Med.

“We believe that new private and public hospitals pose a limited threat to Raffles Med as its group practice distinguishes it from the other private players while public hospitals appeal to a different clientele. We note that private hospitals’ share of patient admissions grew in 2010-14 even when public bed supply surged,” said analyst John Cheong.

He added that Singapore's edge in elective procedures will keep the group’s medical tourism business robust, coupled with the Indonesian rupiah’s slower pace of depreciation against the SGD.

“Singapore is the fourth most popular medical-tourist destination worldwide. Compared to Malaysia, India and Thailand, it leads in high-end non-elective quaternary procedures. Moreover, growing affluence in ASEAN and Singapore bodes well for private healthcare services, which command price premiums,” he said.

“Indonesians form around 20% of Raffles Hospital’s medical tourists. IDR has only depreciated 2.3% on average against SGD YTD, significantly slower than the 11.1-12.2% weakening it experienced in 2013-14. This bodes well for its medical tourism, we believe, which dipped in 2013 after three consecutive years of growth,” he added.