Healthcare Sector Liberalization in ASEAN

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Healthcare ServicesIntegration in ASEANNurul Imlati HaddadASEAN Secretariat

Bogor, 5 October 2012


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ASEAN-Australia-New Zealand FTA

ASEAN-Korea FTA

ASEAN-Japan CEP

ASEAN-Canada

ASEAN-China FTA

ASEAN-Russia

ASEAN-EU

ASEAN-GCC

ASEAN-India FTA

ASEAN-US TIFA

ASEAN-Pakistan

ASEAN-MERCOSUR

ASEAN Integration


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Benefit of IntegrationGeneral benefits :1. Strengthen domestic regulations2. Mobility of resources (balancing supply and demand)

Consumer side :1. More choices of service suppliers2. Better quality of service

Supplier side :1. Transfer of knowledge and technology2. Better access to foreign markets


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Service SuppliersSector Services Main Suppliers

ProfessionalServices

Bookkeeping;documentmanagement;

architectural design;etc.*

India; Singapore andothers

Health services Laboratory testing;tele-diagnosis andconsultation

services;interpretation ofcomputertomography scans*

China; India; Mexico;Philippines andothers

Source: UNCTAD, World Investment Report 2004


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How to Integrate?Commitments in AFAS Remove/minimise restriction for the supply of services by

foreigners

8 Packages committed since 1995

Mutual Recognition Arrangements Nursing and Midwifery (2006) Medical Practitioners (2009)

Dental Practitioners (2009)

Agreement on MNP (to be signed in November 2012) Supersede Mode 4 commitments under AFAS


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ASEAN FrameworkAgreement on Services

(AFAS)


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Mode 1 Cross-border tradeSupply of a service from the territory of one Member into the

territory of any other Member

Example :Tele-diagnosis of a patientin Jakarta by a doctor inSingapore


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Mode 2 - Consumption abroadSupply of a service in the territory of one

member to the service consumer of any otherMember

Example : An Indonesian patient fliesto Singapore to gethospital treatment inMount Elizabeth(Singapore)


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Mode 3 Commercial presence

Supply of a service by a service supplier of one Member,through commercial presence, in the territory of anyother Member

Example :Gleneagles Hospital(Singapore) establishes its

subsidiary in Indonesia


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Mode 4 Presence of naturalpersons The supply of a service by:

A service supplier of one Member, through presence ofnatural persons of a Member in the territory of any otherMember

In their own capacity as service providers, professors,doctors, nurses and other skilled and professionalworkers are allowed for movement.

Example : A Singaporean doctor opena practice in Jakarta


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How the AFAS commitments look?

Schedules specify the extent of liberalisation a Memberguarantees in designated sectors. They are based on thepositive listing approach

Any limitations must be inscribed in Schedules under therelevant mode(s).

Sector andsub-sector

Limitations onmarket access

Limitations onnational treatment

Additionalcommitments

I. HORIZONTAL COMMITMENTS (applies to all subsectors)

3)4)

3)4)

II. SPECIFIC COMMITMENTS (applies to all corresponding subsectors)

1)2)3)4)

1)2)3)4)

1)2)3)4)

1)2)3)4)


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Types of Limitations

Unbound = no commitment (full pol icy discretion) TOTALLY CLOSED

None = no limitation (full commitment) TOTALLY OPENED

MARKET ACCESS :Limiting foreign service suppliers to enter the local market- Minimum number of beds in the hospitals- Maximum number of foreign doctors that can practice in the host country- Obligation to form a joint-venture with local hospital

NATIONAL TREATMENT After entering the market, any regulations that treat foreign service suppliersdifferently from local service suppliers- Proficiency of Bahasa Indonesia- Higher income tax for foreign nurses- Must reside in Indonesia for at least 5 years- Can only practice in eastern part of Indonesia

Any limitations must be inscribed in Schedules under the relevant mode(s).


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Sector description Example 1Sector or subsector Limitations on

market accessLimitations onnational treatment

A. Profess ionalServices

Clinic of

specialisedmedical services

1) None 1) None

2) None 2) None

3) Joint venture withforeign equityparticipation up to 70%,except in Makasar andManado up to 51%

3) As indicated in the HorizontalSection and GeneralConditions

The health professionals shallbe Indonesian

Establishment limited to thecapital of provinces in EastIndonesia region

4) Unbound, except asindicated in HorizontalCommitments

4) Unbound, except as indicatedin Horizontal Commitments


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Sector description Example 2Sector orsubsector

Limitations onmarket access

Limitations onnational treatment

Nursing services(only forspecialistic care)(CPC 93191)

1. None 1. None

2. None 2. None3. In East Indonesia region (except in

Makasar and Manado) Joint venturecompany with foreign equityparticipation up to 49 per cent. In

Medan and Surabaya up to 51%.

3. As indicated in the Horizontal Sectionand General ConditionThe health professionals shall be

Indonesian

4. The nursing services :- shall be provided by persons with

nursing licenses issued by Ministry ofHealth of Indonesia and professionalorganisation/council

- has to be a part/sub-ordinate of ahospital services

- for continuing home care afterhospital treatment

- has applied quality audit by Ministryof Health of Indonesia

- the nurse must has arecommendation as a trainer fromMOH and has certification fromprofessionals organisation and MOH

4. Foreign nurse professionals :- are allowed as trainer/consultant only,

and can not deliver direct nursingservices to patient

- must have a valid nursing licensesissued by Ministry of Health ofIndonesia and health organisation

- are obliged to transfer nursingknowledge and professionalcapabilities to Indonesian nurse

- shall have at least 2 Indonesian understudies during hiss/her term

- are allowed to work for only 2 yearsand can be extended

- fluent to speak Indonesian languageboth spoken and written in his work


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Liberalisation Commitments

No Schedule of Commitments

With Schedule of Commitments

Unbound

Limitations

None


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Targets9 th Package 10 th Package

Completion Target AEM 2013 AEM 2015

Number of Subsectors 104 128

Mode 1 None None Mode 2 None None

Foreign Equity 70% 70%

Mode 3 MA Limitations No limitation No limitation

Mode 3NT Max 3 limitations

/subsector (including

horizontal)

Max 1 limitations

/subsector (including

horizontal)


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Indonesias commitments as of AFAS 8

Line W/120 Line

Y Y Y

Y Y Y

Y Y Y

Subsectors Pass Reason1. Medical and dental services: Clinic of specialised

medical/dental services (only for registered healthinstitution, with 3 sub specialist/super specialistmedical/dental care/more specific than specialist medical

care) (93122)

Yes --

2. Veterinary Services: Other Veterinary Services (93209) Yes --3. Services provided by midwives, nurses, physiotherapists

and para-medical personnel: Nursing services (only forspecialistic care) (93191)

No Foreign Equity only upto 51%

4. Hospital services : Only for specialist and super specialistmedical care/more specific than specialist medical care,provided by hospital of more than 200 beds) (9311)

Yes --

5. Other human health service: Limited to Residential healthfacilities services than hospital services only (CPC 93193)

No Foreign Equity only upto 49%


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ASEAN Healthcare MRAs


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Mutual Recognition Arrangement

At the 7 th Summit (Bandar Seri Begawan, 5 November 2001),ASEAN Leaders mandated the start of negotiations on MutualRecognition Arrangement (MRA) to facilitate the flow ofprofessional services under AFAS

An MRA enables professional service providers registered/certified in its signatory countries to be equally recognised inother signatory countries

MRA does not warrant unrestricted free flow of foreignprofessionals, relevant domestic regulations and marketdemand still applies 22


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3 Healthcare MRAs MRA on Nursing and Midwifery Services

signed on 9 December 2006 Implementing bodies: AJCCN (ASEAN Joint Coordinating Committee on

Nursing)

MRA on Medical Practitioners signed on 26 February 2009 Implementing bodies: AJCCM (ASEAN Joint Coordinating Committee on

Medical Practitioners)

MRA on Dental Practitioners signed on 26 February 2009 Implementing bodies: AJCCD (ASEAN Joint Coordinating Committee on

Dental Practitioners)


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How to Implement the Healthcare MRAs?

Exchange ofInformation

Compilation

Adoption ofBest

Practices

StandardisedProcedures

Publicationtrhoughwebsite

FacilitateMobility

Registration

PRAs Process(Evaluation ,

Registration etc)

CapacityBuilding

Visits Conferences

OBJECTIVES


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AJCC Roles Better understanding of Domestic Regulations

to develop strategy for Implementing the MRAs

Standardise Procedures /Mechanism

Exchange informationtowards harmonisation in accordance with

international standards

Develop mechanism for continued exchange ofinformation


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Exchange of Information Qualifications (technical, ethical & legal) Domestic Laws and regulations Core Competencies Code of Professional Conduct CPD (Continuing Professional Development)

Best Practices

Registration Process Licensing Process Recognition of foreign healthcare professionals

StandardisedProcedures

Recognised Institutions Foreign Professionals Database


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Facilitate MobilityEvaluate qualifications and experience ofnominated foreign professionals

Register and grant recognition to nominated

foreign professionalsMonitor their practiceTake necessary action for any violation toensure high standard of practice


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Capacity BuildingConferences/ ForumsVisits to healthcare facilities /institutions

Attachments programmes

Countries with developed system assist the lessdeveloped countries through various programmesCountries in need for capacity building can arrangelocal seminars, inviting resource persons from moredeveloped AMS


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Roadmap to Implement the MRAsExchange information and expertise in order to promote adoption of bestpractices on standards and qualifications

Compilation of required information (Basic Qualifications and/or List of RecognisedInstitutions, Domestic Laws and Regulations , Core Competencies , Code of Ethics andProfessional Conduct , CPD , Registration Policies and Procedures, Licensing Policies andProcedures, statistics and contact details)Publication of the compiled information through national and ASEAN website

Standardise Procedures

Facilitate Mobility of Healthcare Professionals within ASEAN

Provide opportunities for capacity building and training of healthcareprofessionals

Conferences/ ForumsVisits to healthcare facilities /institutionsAttachments programmesAssistance to other AMSCountries in need for capacity building can arrange local seminars, invitingresource persons from other AMS

Malpractice Insurance


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Questions & Answers

Healthcare Sector Liberalization in ASEAN

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