Hospital operator Bangkok Dusit Medical Services (BGH) and Muang Thai
Life Assurance (MTL) yesterday announced a business alliance designed to keep
hospital treatment costs sufficiently low to allow the partners to offer
insurance products with attractive premiums.
MTL has reached an exclusive
agreement with BGH to design health-insurance products jointly that cater to
the demand for low-cost, high-standard medical treatment that does not require
a cash payment at check-in time. Initially, the partners will focus on general
health insurance as well as tailored coverage for certain serious diseases such
as cancer, which may be unaffordable for some patients.
To facilitate this partnership,
Bangkok Premier Life Insurance Broker was set up by BGH, which foresaw an
increasing need for insurance policies that cover hospital services.
The joint business strategy is
designed to give clients easier access to an international standard of medical
treatment at reasonable cost. In particular, MTL will offer coverage of
hospital-treatment costs. Customers may have to pay minor extra expenses that
exceed the contract terms.
The two partners expect to see a
win-win situation, with BGH designing attractive services to help MTL achieve
cost-control management. MTL will then be able to create life-insurance
policies offering health coverage at attractive premiums.
Dr Chatree Duangnet, vice
president of BGH, said the business alliance would reduce clients' medical
expenses. In addition, its more than 40 years of experience in the hospital
business will encourage the group to provide quality medical treatment and
other services to policyholders.
According to an International
Monetary Fund study, 24 per cent of the Thai population is covered by health
insurance, which is the highest rate in the Asean region. This figure reflects
the fact that the health-insurance market in Thailand has room to grow. The
figure compares with a rate of 80 per cent in developed countries.
"We [BGH and MTL] have the
same business objective - to upgrade Thais' living standards and medical
treatment," Chatree said.
BGH is the largest private
hospital operator in Thailand in terms of patient-services revenue and market
capitalisation, with about Bt58.8 billion in assets as of last year. The group
has 26 hospitals in Thailand and two in Cambodia. It is focused on Bangkok and
various high-growth markets in the South and East of Thailand and overseas
locations. In addition, the group ranks the world's fourth biggest health care
hospital after the US, Australia and Integrated Healthcare Holding.
Chatree added that customers of
MTL would enjoy benefits when using services at hospitals in BGH's network,
which includes Bangkok Hospital, Samitivej, BNH, Payathai and Paolo Memorial.
Dr Suthon Chutiniyomkarn,
managing director of Bangkok Premier Life Insurance Broker, said the partnership
with MTL was an exclusive agreementafter set up the company for one year. It is
expected that the number of customers served under this agreement will reach
10,000 next year and 70,000-80,000 within five years.
So far, the group's general
patient base (both Thai and foreign) numbers about 6 million to 7 million, with
an average increase of 10 per cent per year. Of the total, 20-30 per cent of
the patients make health-insurance payments.
BGH's health-insurance business
has continued to grow, with market value climbing from Bt15 billion to Bt35
billion in the last seven years. It is projected that the value will reach
Bt100 billion within the next five years.
"The group is not worried
that profit will fall, as the market outlook is growing brighter and it will
return benefits to the hospital," said Suthon, adding that the group
planned to expand this service abroad via the regional single market, which is
due to launch in 2015.
"Together with MTL, we are
trying to differentiate our life- and health-insurance products from others',
as well as create new marketing channels and establish cost controls for
insurance compensation to achieve reasonable premiums," Suthon said.
Sara Lamsam, chief executive
officer of MTL, said the company would launch three new products. These are
Perfect Health, which grants policyholders discount rates on treatment at the
group's hospitals; Cancer B Plus, which focuses on cancer treatment with
maximum coverage of Bt2 million, together with special treatment at specialist
cancer-treatment hospitals; and Healthy Value, which offers maximum payment of
Bt3 million for medical treatment.
"This business alliance will
encourage the company to serve more market needs and expand our marketing
channels," Sara said.
Achara Pongvuitham
Business & Investment Opportunities
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