“Although Taiwan got a late start in the field compared to other Asian countries such as Singapore, Thailand and India, it still has enormous potential given that we have first-class doctors and medical expenses are much cheaper than they are in Western countries, “ said Hwang Kung-chang, specialist general and executive director of the DOH's Hospital Administration Commission.

Hwang spoke of Taiwan's medical potential after a letter of intent to develop medical referral services was signed between a California-based insurance company and nine private hospitals in Taiwan — Chang Gung Memorial Hospital, Taipei Medical University Hospital, Wan Fang Hospital, Changhua Christian Hospital, Chang Bing Show Chwan Memorial Hospital, Min-Sheng Hospital, Tung's Taichung MetroHarbor Hospital, Yuan's General Hospital and E-Da Hospital.

The partnership will allow Central Health Plan of California — the third largest medical service management company in southern California — to represent the Taiwanese hospitals in the United States and refer its clients, or the clients of other U.S. health insurers, to the health care institutions to receive care in Taiwan.

According to Hwang, the DOH began working with the Taiwan External Trade Development Council (TAITRA) three years ago to help promote local hospitals in foreign countries.

Its goal was to bring together the hospitals and foreign insurance companies and supervise the quality of the medical services provided under the arrangement.

Hwang acknowledged that Taiwan is lagging behind countries such as Singapore, Thailand and India, which began promoting their international medical services a decade ago, and also might be less competitive than its Asian rivals because of a language barrier.

He stressed, however, that the country's high-quality health care services and relatively low prices gave it a strong competitive advantage.

The cost of cardiac catheterization and stent operations in Taiwan, for instance, is only a quarter of similar procedures in the U.S., which can be good incentive for patients and insurance companies in the U.S., Hwang said.

Overseas Chinese are the main target clients for Taiwanese hospitals because of the shared language, culture and customs, he added.

Chao Yuen-chuan, president and CEO of TAITRA, said at the press conference that the signing was of great significance because it will clear the biggest barrier for local hospitals to gain a foothold in the American medical service market — the insurance system.

According to Chao, the U.S. medical service market, worth US$2.5 trillion this year, will grow to US$4.3 trillion by 2018, when it is projected to constitute 20 percent of U.S. gross domestic product.

According to TAITRA, the medical tourism market in Asia will be worth US$4 billion by 2012, attracting 1.3 million people to countries like Taiwan, Thailand, Singapore, India, South Korea and Malaysia.