This post explains some basic considerations regarding the general concept to participate from the healthcare shortage and nursing-unfriendly climate in the Western world by a socially responsible investment in Thailand. This is no investment advice, although it describes a disruptive innovation and business strategy for a multi-billion dollar market.
How to escape the nursing crisis in the Alzheimer’s world
Alzheimer’s disease (AD) is a type of dementia and long-term memory loss that causes problems with memory, thinking and behavior. Symptoms usually develop slowly and get worse over time, becoming severe enough to interfere with daily tasks. The majority of people with Alzheimer’s disease are 65 and older. Alzheimer’s is the only leading cause of death that can’t be prevented, cured or slowed.
Dementia and specifically Alzheimer’s disease may be among the most costly diseases for society in Europe and the United States. The greatest origin of costs for society is long-term care by health care professionals. The cost of caring for Alzheimer’s patients in the U.S. is estimated to be US$ 226 billion in 2015, with half of the costs borne by Medicare. (Source: American Alzheimer’s Association). The global cost of Alzheimer’s and dementia is estimated to be US$ 600 billion, which is equivalent to 1% of the entire world’s gross domestic product.
Despite the high health care costs, the nursing of Alzheimer’s patients is disastrous in Europe, USA, and other highly developed first world countries. Nursing homes are overloaded, caregivers are overworked and the healthcare system is overwhelmed. Long-term care-motivated migration is not a luxury but rather a necessity.
How to discover the nursing paradise in the Land of Smile
Thailand is the perfect example of a Southeast Asian country with a highly reputed nursing tradition and strong family values. Healthcare is in Thailand maybe sometimes less professional, but much more human and individual.
In this era when social problems are constantly shifted cross-border around the world, it is certainly a weak point to argue that the countries in the Western sphere should not export their social problems to Asia in the form of gerontological colonialism. Therefore, soaring health care costs are pushing more and more elderly on a one-way flight to Asia for quality care in their final years, where round the clock attention is much cheaper.
The Tourism Authority of Thailand (TAT) began in 2004 to actively promote medical tourism. The development of medical tourism to medical migration is quite logical. Thailand’s high standards and healthcare expertise will make it a world leader in medical immigration, while the options for a post-medical treatment holiday are the best in the world.
The significant difference in respect of quality and costs of Alzheimer’s healthcare between Thailand and first world countries makes it sooner or later inescapable to set-up large-scale nursing facilities for foreigners in Thailand. It is obvious that the existing small-scale Alzheimer’s care facilities are insufficient to address the global problem of a nursing shortage and health care crisis.
It is a simple math calculation that the financial gap between the Thai and Western health care environment can be leveraged for the advantage of the client as well as the investor in such a social responsible investment scheme. One important factor in the financial modeling is the question whether insurers cover healthcare and long-term care services beyond their national borders or whether national health insurance coverage is reserved for those who pay tax and maintain a domestic address, even while living abroad.
How to get the dementia project promoted by the BOI
The Thailand Board of Investment (BOI), operating directly under the Prime Minister’s Office, explicitly promotes health rehabilitation centers. The promotion allows 100% foreign ownership in the project company, legal ownership of the project land and a package of additional benefits.
The definition of rehabilitation is to be found in the Technical Report 668/1981 of the World Health Organization (WHO). It says: “Rehabilitation includes the coordinated use of medical, social, vocational, educational and technical measures as well as influences on the physical and social environment for functional improvement to reach a maximum intrinsic activity for the maximum participation in all areas of life, so that the person in his way of life is as free as possible.”
The Alzheimer Super Resort is, under this official definition, a typical rehabilitation center, whose mission is not to cure a disease but to enable people with Alzheimer and similar forms of dementia to remain in their home or community, to live more independently, to participate in social and civic life, to increase general life expectancy and to significantly improve their quality of life.
How to get the additional legal tasks done
Insurers, social security agencies, regulatory agencies and, first of all, the patients are not keen to negotiate with Thai parties and to enter into agreements under the laws of Thailand. Therefore it is essential to involve a non-Thai (U.S., European or other foreign) company as a contractual party into the corporate structure as shown below:
The BOI promotion is certainly not the only legal task to be successfully accomplished. Other main points include
- the corporate structuring of the project in Thailand and abroad, taking into consideration tax planning aspects,
- the acquisition of the real estate and the erection of the buildings,
- the licensing of the healthcare facilities as a rehabilitation center,
- employment and labor law issues with respect to Thai and foreign employees, and
- comprehensive legal project management.
A feasibility study should address these and other legal aspects to ensure that the project is properly planned and not heading into a dead-end. The corporate structuring is independent of the merely business aspects to make the resort most attractive and appropriate to the Thai people. This includes a clear decision on parameters like location, size, scope, target patients, and price.
How to get the perfect investor on board
An investment in Thailand’s Alzheimer’s Super Resorts is appropriate for major medical centers, huge clinic groups, universities and academic research institutes, social security agencies, Alzheimer’s foundations, and other institutional investors.
Although the size of an individual Alzheimer’s Super Resort is limited, the investment market is not. After the successful implementation of a pioneering pilot project this concept can be multiplied at different locations in Chiang Mai, Hua Hin, Chonburi, Isaan, but also on Thailand’s islands like Phuket, Koh Samui, and Koh Chang.
Building a renowned brand in Thailand opens the door for a cross-border expansion to the Philippines and Malaysia. This might be structured as affiliate companies or even a franchise system. “Alzheimer’s patients without borders” is a global concept whose time has come. Alzheimer’s disease: the silver tsunami of the 21st century. The high costs of dementia care will flood the banks. Are you prepared for the impact?