Hospital Marketing|21/03/2012

Bangkok Hospital (BGH) vs Bumrungrad (BH): The Plot Thickens

shutterstockWill BGH swallow Bumrungrad whole or will it be one bite at a time?

The headline of the business section of the Bangkok Post was big and bold, “BGH (Bangkok Hospital) raises stake in Bumrungrad Hospital

According to the newspaper report, BGH now has a 20.28% stake in its crosstown rival Bumrungrad Hospital, making it the largest single shareholder in Thailand’s most famous private hospital and the crown jewel of the medical tourism industry.

What does this all mean? Why is BGH upping its ante in Bumrungrad? Is a takeover imminent? These are questions people keep asking me, and my response is a tepid “who knows”.

Obviously someone does. All I know is that watching this drama unfold from the sidelines is like watching Kabuki theatre — you see what is happening, but you don’t really understand it.

There’s a lot more going on than meets the eye, but a couple of things are clear.

1. Bangkok Hospital is the 800 lb. gorilla in the Thai market. The BGH group is the largest private hospital operator in Thailand in terms of revenues from patient services and market capitalization. Their network includes 29 hospitals and a portfolio of brands that include Samitivej Hospitals, BNH, Phyathai Hospital, and Paolo Hospitals.

BGH recently announced that they plan to expand their network to at least 35 hospitals by 2015. This kind of size and scope is making a lot of people nervous in Thailand — namely regulators, competitors and insurers.

Although it doesn’t have the brand name that Bumrungrad does, BGH has a much bigger network of hospitals, an air evacuation company, and strategic links to a regional airline, Bangkok Airways. It’s loaded.

2. BGH is one of Asia’s largest healthcare groups, along with International Healthcare Holdings (IHH) that owns Parkway Hospitals (Singapore and China), Pantai Hospitals (Malaysia) and Acibadem Hospitals (Turkey). These two healthcare behemoths are positioned to become the dominant regional healthcare providers in Asia, and a gateway for investors looking to tap into the growing demand for private healthcare in Asia.

3. BGH and Bumrungrad would make strange bedfellows. The two hospitals are fierce competitors — the Hattfield’s and McCoy’s of the healthcare industry in Asia. They have very different personalities, and it’s hard to think that a ‘marriage’ between these two would ever be anything other than rocky.

Bumrungrad is the prima dona. It is a single facility, multi specialty, “international” hospital in the heart of Bangkok that caters to medical tourists, expatriates and high end Thais. Bumrungrad has cache and swagger, and that turns a lot of people on (and off), but undeniably it is THE brand and that drives BGH a little loco.

Bangkok Hospital is the local juggernaut. The street fighter who lives on the other side of town. It owns a panoply of brands, businesses and medical centers that cater to middle and upper income Thais and medical tourists. Bangkok Hospital plays aggressive and has always had a love-hate relationship with Bumrungrad.

Will BGH swallow Bumrungrad whole or will it be one bite at a time? Who knows? I don’t.

But I do know this.

The BGH vs Bumrungrad storyline is getting a lot more interesting, and even if you don’t understand everything that’s going on, it still makes for great theatre.


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