Last year, 65,000 Americans went to Bumrungrad for in-patient or outpatient treatment, up from just 10,000 in 2001. And of those 65,000, about half of them were U.S. residents who flew across the Pacific to Thailand for medical care. (The others were American expatriates living in Thailand or other parts of Southeast Asia.) Many of the patients from the U.S. were uninsured, taking advantage of medical costs in Bangkok that are just a fraction of those in American hospitals....
Medical tourism has helped Bumrungrad's bottom line. Revenue from foreign patients rose 14% last year, and non-Thais now account for 55% of Bumrungrad's business. In a Mar. 7 report, Phillip Securities analyst Rutsada Tweesaengsakulthai calls Bumrungrad "Thailand's leading private hospital" and predicts that revenue will grow 11.5% this year, to $618 million, with profits (after stripping out exception earnings from a sale in 2007 of a medical software subsidiary to Microsoft (MSFT) rising 12%, to $41 million.
The big problem, though, is that Bumrungrad is now too popular. It has a 70% occupancy rate for in-patients and outpatients, much lower than its bigger rival, Bangkok Dusit Medical Services. Bankgok Dusit doesn't get as many Americans but it attracts more international patients overall, with 649,000 checking in last year. Bumrungrad "is restricted by its tight capacity," wrote KGI Securities analyst Rakpong Chaisuparakul in a Feb. 20 report. That's one reason Bumrungrad's stock price has sagged, down about 15% for the year and trading near its 52-week low.
Bumrungrad has just started an expansion plan that should boost its capacity by 20% by 2012. Schroeder expects Americans to continue traveling to the hospital. "Medical inflation [in the U.S.] continues to outpace normal inflation and I don't see that reversing," he says.
Via Harry Clarke.