A grand new hospital building rises against the backdrop of the idyllic beach in Sanur in southeast Bali.
Spreading across 50,000 square meters, Bali International Hospital (BIH) is set to partially open its doors in April. It has been designed with hotel-like aesthetics, will feature 250 executive rooms and be equipped with cutting-edge technology for advanced treatments in fields ranging from cancer to neurology.
The facility sits at the center of The Sanur, an approximately USD 1 billion project to develop Indonesia’s first “special economic zone” for premium health care and related services that the government is preparing at a 41.26-hectare complex boasting a two-kilometer-long coastline. The goal is twofold: to attract medical tourists to one of the region’s most popular holiday destinations and to capture some of the estimated USD 11.5 billion that the nation’s affluent citizens spend each year on seeking medical services overseas.
“A sophisticated hospital may be available elsewhere, but at BIH, patients will be treated in an environment that is surrounded by the beauty of nature,” Agus Harimurti Yudhoyono, the coordinating minister for infrastructure and regional development, said during a visit to the hospital in January.
“The lush, serene surroundings create a healing atmosphere, ensuring that those who come here for treatment will not only recover physically, but also find comfort and peace.”
The Bali project and a second one near Singapore have attracted an array of foreign partners, including from Germany, India, and Malaysia, in addition to domestic investors. But a setback with BIH and its previously touted flagship partner, the US Mayo Clinic, has underlined the challenges faced by the government in achieving its ambitions. A shortage of doctors in the country and controversies over a plan to recruit foreign specialists and the high costs of medical equipment are also delaying the initiative.
“More than 1 million of our citizens go abroad [every year] for medical treatment—to Singapore, Malaysia, Japan, the United States, Europe,” former President Joko “Jokowi” Widodo said last year. “We’ve lost USD 11.5 billion [annually] because they don’t want to be treated inside the country.”
Jokowi kicked off the construction of BIH in 2021. Less than two weeks before his term in office ended last October, he also broke ground on the country’s second special economic zone designated for health care, on Batam island, a one-hour ferry ride from Singapore.
Yudhoyono said Indonesia’s new President Prabowo Subianto is committed to continuing the development of healthcare infrastructure, calling it a “focal point” of the administration.
The Sanur and BIH are being developed mainly by resort developer InJourney and hospital holding company Pertamedika IHC—both of which are state-owned.
The Batam development, meanwhile, is being led by the Mayapada Group, a local conglomerate that runs one of Indonesia’s largest private hospital chains. Mayapada has committed IDR 6.91 trillion (USD 423 million) in investment for the project through 2032 and is partnering with India’s Apollo Hospitals to build an international-class hospital on the island.
A 2023 health ministry survey revealed that one in every 1,000 households in Indonesia had sought medical services abroad over the previous three years. The top five destinations were Malaysia, Singapore, Saudi Arabia, the UAE, and South Korea—with medical checkups being the most commonly sought service.
Most respondents cited comprehensive and quality services, diagnostic accuracy, and more communicative health personnel as top reasons for their trips.
Cintamy Amania, a 38-year-old banker in Jakarta, and her elderly mother are among the many Indonesians who regularly seek health care abroad. Amania said her mother, 80, suffered from a heart condition and showed early symptoms of dementia, but Indonesian hospitals “don’t take my mother’s dementia seriously.”
“The hospital in Jakarta that treated my mother’s heart condition couldn’t provide care for her dementia,” Amania said. “[They] didn’t consider it a condition requiring special attention.”
It was only when she sought care in Singapore that she found integrated treatment options. They now travel to the city-state every six months, spending up to IDR 1 billion (USD 61,200) annually for the trips.
Medical services in neighboring countries can be cheaper, too. More than one-third of the respondents in the ministry survey cited “affordability” among the reasons for their trips.
A Jakarta resident said she spent a total of IDR 8 million (USD 489.6) for a medical checkup in Penang, Malaysia, last September, including airfare and accommodations. Similar examinations in Jakarta could cost at least IDR 5 million (USD 306) for just the checkup, she said, adding that the service in Penang is “far more comprehensive, covering consultations, and personalized diet recommendations.”
Some industry players have blamed high import taxes on medical devices for pricey hospital services. But health minister Budi Gunadi Sadikin denied this, citing instead “distribution channels that inflate costs.”
“A sophisticated device that costs IDR 8 billion can reach IDR 18 billion when procured in Indonesia,” he told Nikkei Asia in a January interview.
But the minister did admit that the quality of health care in the country still lags its neighbors. “Malaysia has closed the gap with Singapore in terms of quality, but they offer lower prices, which is why more Indonesians are seeking treatments there.”
He added that Indonesia’s healthcare sector has long been plagued by limited access to hospitals and doctor shortages. There are only about 160,000 general practitioners in the country of 280 million people, and the health ministry says 120,000 more are needed to meet the World Health Organization recommendation of one doctor for every 1,000 residents.
Hasbullah Thabrany, chairman of the Indonesian Health Economics Association, said the shortage caused many doctors to work at multiple facilities, in contrast with their Singaporean and Malaysian counterparts who commonly work full-time at one hospital.
“For a long time, we’ve relied on government-owned hospitals where doctors work part time and juggle multiple practices. As a result, they often lack the time to fully listen to and address patients’ needs,” Thabrany said. “It’s no surprise that many Indonesians choose to seek treatments abroad.”
Sadikin said the situation is particularly concerning with regard to specialists. “We’re still facing a shortage of approximately 29,000 specialists,” the minister said.
The government has started offering more scholarships for medical students and the parliament in 2023 passed a law allowing the recruitment of foreign specialists. But Sadikin said granting foreign doctors a license to practice in Indonesia remained tough.
This is largely because of resistance from the Indonesian Medical Association, or IDI, which demands that foreign recruits speak Indonesian and the recruitment be based on a “clear mapping” of needs.
“In principle, IDI has never rejected foreign doctors,” the association’s deputy chairman, Mahesa Paranadipa Maikel, told Nikkei. “IDI is just reminding [the government] … that there should be no welfare disparity between Indonesian and foreign doctors.”
“Defense and security aspects also need to be considered … including access to health data and information,” he added.
Sources familiar with the development of BIH, who spoke to Nikkei on condition of anonymity, suggested that the difficulty in attracting foreign recruits was contributing to the delayed opening, which was originally planned for 2023. The Bali hospital has indicated it intends to hire at least nine foreign specialists, but no practice license has been granted to any so far, according to one anonymous source.
Pertamedika IHC, the parent company of BIH, previously flaunted Mayo Clinic as its main partner for the project. But in 2023, the US hospital operator clarified that it would only serve in a consulting role and would not be involved in the operations.
“BIH should have been operational by now to serve as a foundation for other clinics, allowing them to rely on it for patients’ medical checkups,” one of the anonymous sources said.
The management of BIH and Pertamedika did not respond to Nikkei‘s requests for comments.
Despite the setback, InJourney continues to develop the area, investing 10 trillion rupiah into the project.
It has built a 5,000-delegate-capacity convention center and is revamping two beachfront hotels that are already open. It is also looking to host eight privately run clinics offering services ranging from stem cell treatment and geriatric care to hair transplants and plastic surgery.
InJourney CEO Maya Watono told Nikkei that foreign clinics are partnering with local health providers to build these centers and expected to bring “significant investment to the region.” They include Germany’s Alster Lake Clinic, which will build a cellular and antiaging therapy facility, and Malaysia’s Alpha IVF, which will offer fertility treatments.
Christine Hutabarat, CEO of Hotel Indonesia Natour, InJourney’s hospitality arm, estimated additional investments of up to IDR 10 trillion (USD 612 million) would be needed. “The Sanur aims to become the top choice for wealthy Indonesians seeking world-class medical treatment by early 2027.”
Felicia Thje, a businesswoman from Surabaya, East Java, said she had been going to South Korea for aesthetic treatments, spending at least IDR 60 million (USD 3,672) for each procedure.
“Skin care and plastic surgery in South Korea really feel like self-care. The clinic takes care of everything, from accommodation, meals, and recovery, until I’m ready to go home,” Thje said.
She added she might consider going to Bali instead, but wants to hear reviews from others first to see if “the services and results of treatments in Sanur … match those in South Korea.”
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.