Rapid economic growth and growing population have combined to create a critical situation for Southeast Asian governments. Even as the spending on healthcare systems in the region has increased with the increase in incidences of adverse health conditions it looks like demand is outstripping the supply of healthcare in the region.
According to Deloitte’s 2015 Healthcare Outlook, Thailand’s spending on healthcare is estimated at 3.3 per cent of GDP in 2013, which is proportionately less than the Philippines, Malaysia or Singapore, but more than Indonesia (at 2.8 per cent in 2013). Following Thailand’s introduction of a universal healthcare system in 2001, its healthcare spending has been increasing and is projected to grow eight per cent a year from 2014 to 2018 to reach US$18.7 billion. However, the Thai government is still working on reducing its budget deficit and healthcare’s share of GDP is expected to stay flat, despite the growth in demand.
Indonesia, comparatively, has a very poor public healthcare system with only two doctors per 10,000 people. The country is suffering from severe infrastructural limitations with only 0.6 hospitals bed per 1,000 population. Myanmar spends the least on healthcare at 1.8 per cent of GDP in 2013, according to World Health Organisation (WHO).
Meanwhile, the private healthcare market is strengthening its position. Private investment is increasing rapidly in order to meet the increasing demand. Developed areas in the region such as Singapore and Malaysia are providing world-class services to both local and international patients. The region also enjoys the benefits of having a strong medical tourism industry.
The region’s healthcare market is projected to be worth US$134.2 billion by 2020. The private sector is likely to continue to be dominant, accounting for a 53 per cent share and is forecasted to reach US$71 billion in 2020, nearly double the size in 2010, according to the research by Al Masah Capital Management Limited.
Regulations and measures like the restructuring or corporatisation of public hospitals in Singapore in 1985 and the Swadana (selffinancing) hospitals in Indonesia, the WHO Regional Strategy for Universal Health Care (UHC), strengthening the community-based health workforce in the context of revitalisation of primary healthcare and more have positively affected the region.
Both the public and the private players have to work together to meet the increasing demands on region’s healthcare system.
In the cover story, Amit Varma of Quadria Capital discusses the opportunities in Southeast Asian Healthcare market and explains how to plan for the healthcare demand.