CONTENTS

1. A Snapshot of Healthcare in the Region

2. The Big Healthcare Themes for 2014

3. Healthcare Across ASEAN: Country

Overviews

4. Appendix: Digital Healthcare Across ASEAN

5. Appendix: Thoughts for Pharma

Healthcare in South East Asia is going through a period of

unprecedented change…

Rapid economic growth

Rapid population growth

Increasing affluence and demand for better, and in some

cases, private healthcare

Public healthcare sector reform and broadening

The introduction of „new‟ growing healthcare challenges…

Healthcare

in South

East Asia

Singapore - Advanced healthcare, high spend, promotes private contributions

Thailand, Brunei, Malaysia - Good to high standard of healthcare with focus

on higher quality

Indonesia, Vietnam, Philippines -Basic healthcare provision

Cambodia, Laos, Myanmar - Poor and low level healthcare provision

A SNAPSHOT

OF THE

REGION

• The WHO says health expenditure

per capita in ASEAN is around 4%

of GDP: that’s low. The OECD

average, as a comparative, is

around 9.5%.

• However health expenditure has

increased two and half-times

between 1998 and 2010, reaching

over $68 billion.

• Nonetheless, healthcare quality

and provision varies widely across

SE Asia…

Excellent healthcare

outcomes

Immense developmental

challenges

Considerable

challenges such as

infrastructure and

human capital

issues

ASEAN TOTAL HEALTHCARE SPEND

– OVER $68 BILLION

Data from World Bank 2011 (latest available)

605 million people

Average age < 27yo

ASEAN TOTAL HEALTHCARE SPEND

AS % GDP = Public + Private

Vietnam spends the most, while Myanmar spends the least. Looking at public and private spending,

private spending is higher, with the exception of Thailand and Brunei, where public spending is higher.

0

2

4

6

8

10

12

14

16

18

20

Public Private

Data from World Bank 2011 (latest available)

(Total health expenditure is the sum of public and private health expenditure)

ASEAN GOVERNMENT HEALTHCARE SPEND

% OF TOTAL GOVERNMENT EXPENDITURE

Data from World Bank 2011 (latest available)

Health expenditure, public (% of government expenditure)

(Philippines data not available)

Government expenditure on health shows a different – but equally revealing – picture of healthcare provision. Thailand spends the

most, Myanmar spends the least. Indonesia again is low down on health spending, coming in second last. The top three –

Thailand, Vietnam, Brunei – all have well developed public healthcare systems. As a comparative, the US and UK are spending

around 19-16%, against the ASEAN average of 6.7%.

ASEAN Average 6.7%

OECD Average 17.2%

0

5

10

15

20

25

USA OECD Average UK Thailand Vietnam Brunei SingaporeASEAN Average Cambodia Malaysia Laos Indonesia Myanmar Philippines

ASEAN SPEND PER CAPITA

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

Data from World Bank 2011 (latest available)

Health expenditure per capita (current US$)

ASEAN Average $422.4

OECD Average $4593

We made this graph to give you an indication of just how far behind ASEAN is in terms of real healthcare spending. As you can see, the

comparison between the US and UK is extreme. Singapore is the only ASEAN country that comes anywhere close on comparable terms.

This does not mean that healthcare in ASEAN is „small beer‟; on the contrary, it just goes to show the huge growth potential there is!

All ASEAN countries - with the exception of Myanmar, Cambodia and Laos - are opportunity markets for healthcare and demand is

rising rapidly.

Singapore is rightly proud of the efficiency of its healthcare sector: excellent outcomes

achieved at a closely managed cost

INDONESIA

There has been considerable investor interest in Indonesia‟s healthcare

space, including private hospital groups.

The Indonesian government has tried to encourage more private sector

involvement in the health sector. The Negative Investment List currently stipulates

that foreign investors may now own up to 67% (65% previously) in healthcare

related businesses. Ownership in the pharmaceutical sector is capped at 75%. It

should be noted however that Indonesia still places limits of foreign ownership

and rights.

Private investors are taking more interest in Indonesian healthcare.

Blackstone, Bain Capital, and Dubai's Abraaj Capital, among others, have all been

looking to break into the Indonesian healthcare sector by acquiring a percentage

of private Indonesian healthcare operator Siloam, according to Reuters.

Siloam is the major hospital chain in Indonesia, but there are also a number of

other private providers

POINTS OF

INTEREST FOR

HEALTHCARE

INVESTORS

LOOKING AT

ASEAN

PHILIPPINES

Investments, especially in public-private

partnerships (PPPs), are big in the

Philippines

The government opened for bidding the

construction of a 700-bed capacity

specialty tertiary hospital earlier this year.

The project is estimated to cost US$ 135

million.

Large private healthcare investments are

also taking place; Makati Medical

Centre, one of the leading hospitals in the

Philippines, is investing heavily in new

laboratories for the diagnosis and

treatment of diseases…

POINTS OF

INTEREST FOR

HEALTHCARE

INVESTORS

LOOKING AT

ASEAN

THAILAND

Thailand has a well-developed

healthcare sector.

Private investment is increasing

rapidly as demand for good quality

provision grows as government

provision falls behind in quality.

Bangkok Dusit Medical

Services, the largest private hospital

operator in Thailand, has invested in

highly profitable non-core medical

businesses…

MALAYSIA

Malaysia has increased its 2013

budget by 15% for healthcare to US$

6.36 billion, as increased demand, plus

the government‟s desire to reach

developed country status by

2020, drives healthcare growth.

For digital healthcare providers, big

opportunities; from 2010-2014 the

government is making a push to

expand the use of IT in medical

care, health education and health

services system management. It is

pushing “telemedicine” which allows

for virtual medical consultation and

training.

There has been an issue with

telemedicine „take-up‟ however;

despite this private sector demand is

strong…

POINTS OF

INTEREST FOR

HEALTHCARE

INVESTORS

LOOKING AT

ASEAN

VIETNAM

An increase in demand for private healthcare in

Vietnam is boosting investments. The

government is offering generous incentives to

foreign investors in the health sector: foreign

healthcare backers enjoy a corporate income

tax rate of 10%, tax exemption over the first

four years of a project and a 50% subsequent

tax break in the following years.

Last year, VinMec, the country‟s largest and

first hotel-like hospital was built, featuring five-

star hotel standards, 25 VIP rooms, and two

presidential suites.

The Triple Eye Infrastructure Corporation is

awaiting government permissions to invest over

$160 million in building a 200-bed international

hospital.

The Chandler Corporation, has also made a

move on Vietnam's largest private hospital

group, Hoan My Medical Corporation, putting in

$99 million to acquire an 80% stake…

SINGAPORE

An aging population and a focus on

improving healthcare is driving investment in

Singapore.

The country‟s recent health policy was laid

out in the „Healthcare 2020 Masterplan‟…

Changes starting in 2014 include a new

payment scheme introduced by the

government that will cover more

patients, more conditions and more

treatments. In particular, there will be more

support for the elderly and for low income

families.

Singapore plans to add 3,700 hospital beds

and recruit 20,000 more healthcare workers.

Two more general hospitals, four community

hospitals, and six polyclinics will open by

2020.

POINTS OF

INTEREST FOR

HEALTHCARE

INVESTORS

LOOKING AT

ASEAN

BRUNEI

Brunei is small but rich! Investment

remains high in its well funded

healthcare sector.

Parkway Pantai, one of Asia's largest

private healthcare providers, is in a

joint venture with the Brunei

Investment Agency to manage a 21-

bed specialty cardiac center…

The Big Healthcare Themes

for 2014

The Big

Healthcare

Themes for

2014

The year 2014 will be an exciting milestone for healthcare across the region; big changes and challenges await…

Some of the main issues will be:

The continued opening up of the private healthcare market and the embrace of the Public-Private Partnership (PPP) mechanism

The increasing relevance of ASEAN

A greater demand for better and wider provision from the public sector

More focus on growing but largely ignored health problems

Private

Healthcare

GrowthPrivate healthcare growth is continuing to grow at a rapid rate – this trend willcontinue in 2014…

In Indonesia, the government has moved in recent years to encourage more privatesector involvement and revised the Negative Investment List to allow for moreprivate sector investment.

In the Philippines too, investments in PPPs are big. The government needs privatesector cash to sustain state provision.

In Thailand, private investment is growing at breakneck speed as demand for goodquality provision grows and government provision falls behind.

In Vietnam, private healthcare is also on the march. The government is evenoffering generous incentives to foreign investors in the health sector: foreignhealthcare backers enjoy a corporate income tax rate of 10%, tax exemption overthe first four years of a project and a 50% subsequent tax break in the followingyears.

South East Asia truly is going private and there are big opportunities for privatehealthcare providers and health firms. People with more money are prepared tospend more money on their health.

The

Increasing

Relevance of

ASEAN

• ASEAN is becoming more important and

relevant for countries in the region. The

ASEAN Economic Community 2015 and

the ASEAN led Regional Comprehensive

Economic Partnership (RCEP)

demonstrate this.

The ASEAN

Economic

Community

(AEC)

• The ASEAN Economic Community (AEC) is the goal of

regional economic integration by 2015.

• The AEC aims at: (a) a single market and production base, (b)

a highly competitive economic region, (c) a region of equitable

economic development, and (d) a region fully integrated into

the global economy.

THE REGIONAL

COMPREHENSIVE

ECONOMIC

PARTNERSHIP

(RCEP)

• The Regional Comprehensive

Economic Partnership (RCEP)

is a proposed free trade

agreement between 16 Asia-

Pacific nations.

• The 10 ASEAN states plus its

FTA partners -

Australia, China, India, Japan, S

outh Korea and New Zealand.

A combined GDP of around $17 trillion.

Makes up about 40% of world trade.

16 countries

3 billion people

The

Increasing

Relevance

of ASEAN

• As ASEAN becomes more and more relevant, so to does ASEAN and its influence on healthcare. ASEAN leaders have committed to healthcare as one of the priority areas for region-wide integration.

• Through mechanisms such as the Healthcare Services Sectoral Working Group (HSSWG), ASEAN is attempting harmonize health regulations, and regulations regarding some medical products and devices. This has important ramifications for the healthcare industry; understanding and working through ASEAN is increasingly important, as it takes on a larger regional healthcare remit.

The

Increasing

Relevance

of ASEAN

• The HSSWG is an important part of the ongoing liberalization process of the

ASEAN Framework Agreement on Services (AFAS).

• In the future, Mutual Recognition Arrangements (MRAs) on Medical

Practioners, Nursing and Dental Practioners could reshape regional

healthcare expertise and allow for much more mobility and skill transfers

between ASEAN states; likewise with the development of greater

equivalences and regional policy streamlining. Many MRAs have already

been signed – for example in dentistry and nursing – the issue is

streamlining and follow-through at the national legal level on country by

country regulations.

• ASEAN is and will play a much greater role in shaping regional healthcare in

the future.

• This is also an important issue to consider in terms of equity. Although

opening up of markets could be a boost for the healthcare sector across the

region, it also risks exacerbating divides; it is possible that the better-off will

be better off still and that less developed systems may fall further behind.

Greater mobility may also lead to „brain drains‟ where highly qualified

practioners move to ASEAN countries where higher remuneration is

available, increasing capacity and skill gaps.

The

Increasing

Relevance

of ASEAN

• As ASEAN pushes forward with regional integration, there is also a

concern over the greater pressure and demand that will be put on

some of the regions „healthcare hubs‟ - the leading ASEAN countries

with good but affordable healthcare systems - specifically Thailand

and Malaysia.

• This is because ASEAN is aiming to implement a regional system

where ASEAN member citizens will be able to receive health services

in any country in the region with a similar standard. Medical workers

will also eventually be allowed to work in any ASEAN country via the

full implementation of MRAs. This means that the demand for doctors

and hospital services will increase in countries with good, but

affordable healthcare systems.

• All these issues will become increasingly important points of focus for

the future and in the run-up to 2015.

Bigger

and Better

Public

Health

Provision

• Across the region, there is a greater push for universal healthcare provision and better provision where it is currently insufficient.

• From the Philippines to Thailand where public „universal‟ system are already in place, governments are under pressure to provide better health services to those in harder to reach regions – mostly in rural areas.

• Indonesia is about to embark on a hugely ambitious program of „universal‟ healthcare provision via the introduction of basic health insurance coverage through SJSN.

• Even in wealthy Singapore, the government is reforming its healthcare insurance policies to focus on increasing affordability, through a reformed MediShield and greater provision for the elderly – with more elderly focused community hospitals planned.

• It is not just the private health sector which is growing, but an increasingly growing public sector.

• Looking across the other side of the world to Brazil this year, mass protests took place among Brazil’s middle classes at poor public services and provision, including healthcare. What this lesson tells us is that tax-paying middle classes soon demand better services for their hard earned tax payments.

A focus on

growing „new‟

health threats• As ASEAN nations get richer they become more prone to

‘rich country diseases’ – type-2 diabetes, obesity and

„sedentary lifestyle‟ related diseases are all on the rise

across the region.

• Over 191 million people are now living with diabetes in

the Asia-Pacific according to the International Diabetes

Federation (IDF).

• Issues such as mental healthcare also need to be

addressed. So far the problem is mainly

ignored, marginalized - or even worse - stigmatized. As

work and lifestyles become more urban and „busy‟, stress

and mental illness is likely to become a growing health

problem.

A focus on

growing „new‟

health threats

• The other change is that rapid population growth is overshadowinganother important trend; Asia is on track to become the „oldestregion in the world‟ by 2050 according to the ADB. Asia‟s elderlypopulation is growing rapidly; it is projected to hit 922.7 million bythe middle of this century.

• Despite this shocking statistic, it should be noted that Asia and SouthEast Asia is very diverse in demographic trends - Japan, China, Singapore and Malaysia face an increasingly elderlypopulation, however much of South East Asia still has very youngdemographics. There are therefore competing wellness challengesacross the region and priorities vary from country to country.

• This means more age related diseases and healthcare needs;needs which are currently largely ignored and in short supply.

• Asia is focusing on its young, but it is the elderly which may prove tobe a ticking time-bomb for the region. Healthcare companies have apotentially large role to play in providing for this growing need.

• There is a huge lack of capacity in South East Asia for countries totreat and elderly health conditions such as dementia. This iscombined with a lack of palliative care and suitable health supportsystems.

Image by garryknight

HIV/AIDS

• According to the UNDP, Indonesia faces a threat of a major HIV epidemic. UNAIDS states that HIV/AIDS in Indonesia is one of the fastest growing epidemics in Asia and that the incidence of HIV is a “concentrated” epidemic, indicating high risk populations where infection rates are over five percent.

• HIV/AIDS has high prevalence levels in Jakarta and Bali (populous regions), but also serious concentrations in rural areas, usually in close proximity to mining areas. This is especially true of Papua.

• According to a report by UNAIDS, the cumulative number of reported HIV infections in Indonesia has risen sharply from 7,195 in 2006 to 76,879 in 2011.

• Some of the major issues include a lack of education and public awareness, and access and use of safe sex precautions (this is complicated by societal taboos and some conservative religious attitudes).

• The Indonesian government is aware of the issue and has set up a National Strategyto combat the problem, with the goal that by 2014 eighty percent of key populations will be reached through effective preventive reduction programs.

HIV/AIDS• Although HIV/AIDS is a growing concern, countries

such as Thailand – which once had serious

HIV/AIDS epidemics – have made huge progress

in tackling the issue according to the

UNDP, through education, public awareness and

safe sex promotion.

• Infection rates have been cut dramatically since

1991 and Thailand is one of the very first countries

to have achieved the sixth Millennium

Development goal, to begin to reverse the spread

of HIV/AIDS by 2015, in advance of the target

date.

Medical

Tourism• Medical tourism is Big Business in

Southeast Asia, especially for

Thailand, Malaysia and Singapore.

• Thailand has perhaps the most advanced

medical tourism sector (with end-to-end

solutions fully integrated with air travel; hotel

accommodation for traveling families and

airport greeting).

• It is estimated Thai medical tourism

increased from nearly 400,000 foreign

patients, in 2007, to nearly 700,000 in 2012

worth a staggering $3.8 billion. That‟s $3.8

billion in direct healthcare spending: the total

economic impact may be three times that

amount.

• Another point of interest about the Thai

health tourism sector is the wide range of

countries from which it takes patients –

Japan, Middle East, UK, USA and Australia

are the big five – not just from its ASEAN

neighbors.

• Singapore is also a globally renowned

medical tourism hub and also a center of

excellence in oncology (which accounts for

high revenue spend per patient): health

tourism patients were worth over $800m in

2011 and nearly half from Indonesia.

• Heath tourism is set to grow further still

within the region, as better of patients from

ASEAN travel to different countries for

treatment, and the region‟s growing

medical prominence attracts more

foreigners from developed markets.

Healthcare Across

ASEAN

INDONESIAHealth expenditure, total (% of GDP) 2.72

Health expenditure, public (% of government expenditure) 5.32

Health expenditure, private (% of GDP) 1.79

Health expenditure, public (% of GDP) 0.93

Health expenditure per capita (current US$) 95.00

• Small budgets and underinvestment have led to basic indeed poor provision

compared to other ASEAN states.

• Basic primary healthcare provision is provided through an array of government social

protection schemes. This does not cover the total population. This will change from

2014 with the introduction of a universal coverage scheme (discussed on next slide);

this, however, will still only be basic cover.

• Indonesia‟s healthcare system is also decentralized (since 2001), which has led to

varying degrees of quality and provision from region to region – Java has relatively

good access to healthcare, but across the 17,000 islands, availability is patchy.

„Puskesmas‟ public health centers are the only available health services available in

rural areas (if at all).

• Healthcare spending is set to rise, due to an increase in state spending, and by

encouraging the private sector to boost investments in health infrastructure via PPPs

(Public-Private Partnerships). There has been a recent law change, increasing the

allowed foreign ownership percentage of hospitals from 65% to 67%, also from Tier 1

major cities to across the country.

Key Facts

1,800 total hospitals

Only 5 hospitals internationally accredited;

all 5 are private

0.3 doctors and 0.6 beds per 1,000

compared to neighbouring Malaysia 0.8

and 1.8 respectively. As a

comparative, the OECD Average is 4.8

beds per 1,000 population and 3.2 doctors

per 1,000 population

Major Hospital Groups

Lippo Group – Siloam Hospitals

Kalbe Group – RSMK Hospitals

Premier Group – RS Premier Hospitals

Health Issues

Increase in non-communicable diseases

((especially cardiovascular diseases)

Growing elderly population

Malaria and Dengue fever

Tuberculosis

Growing HIV/AIDs problem

Smoking related diseases

SJSN AND THE

INTRODUCTION

OF BPJS (A SEA

CHANGE IN

INDONESIAN

HEALTHCARE

PROVISION)

• Indonesia currently has a basic level of healthcare provision, with half

the population – i.e. 125m+ - lacking state health coverage or state

or private health insurance.

• The government is set to introduce basic health health Insurance

coverage called SJSN (Sistem Jaminan Sosial Nasional), where from

1st January 2014, it will provide 140 million Indonesians with health

coverage implemented by the BPJS (Badan Penyelenggara Jaminan

Sosial) state social security provider. Further, it aims to have truly

universal coverage by 2019.

• It will mainly provide for the poor and vulnerable, who are currently

catered for under a number of other social protection programs.

• SJSN is a move towards a more comprehensive and joined up approach

to state cover and provision.

• It is worth noting that with the 2014 elections fast approaching and a 2nd

term „lame duck‟ presidency, the government is content for high public

spend levels, such as implementing the health scheme, without tackling

politically sensitive and economically costly subsidies. The question

remains: will the next government have the political will?

THAILAND

• Healthcare in Thailand can generally be categorized as high – especially in

relation the rest of SE Asia. The public system covers everything from basic

health needs up to operations and access to antiretroviral treatment for HIV.

• Thailand has had a universal healthcare program in place since October 2001, although

it is underfunded and puts a serious demand on public resources. This is one of the

reasons why there is growing demand for higher quality private healthcare – the

emergence of a dual-track system, a growing policy sticking point in Thailand.

• Thailand has four main health security systems; The Civil Servant Medical Benefit

Scheme (CSMBS) for civil servants and their families, the Social Security Scheme

(SSS) for employees of private companies, the Universal Health Coverage scheme

(UHC), also widely known as the 30 baht scheme, for low income earners.

• It also has a highly-developed medical tourism sector, as previously discussed.

Key Facts

1,200 total hospitals

2/3rd of hospitals in public sector

Average of 2.1 beds per 1,000

people

Major Hospital Groups

Bangkok Dusit Medical Services

(BGH) – Thailand‟s largest private

hospital chain

Bumrungrad Hospital Plc -

Thailand‟s second-biggest listed

hospital operator and a leading

hospital chain

Health Issues

HIV/AIDS, which in the early 2000s

emerged as the country‟s leading

cause of death

Health expenditure, total (% of GDP) 4.06

Health expenditure, public (% of government expenditure) 14.49

Health expenditure, private (% of GDP) 1.00

Health expenditure, public (% of GDP) 3.06

Health expenditure per capita (current US$) 201.84

THAILAND

2014 AND

BEYOND

• Despite its healthcare strength, Thailand's national health system is in need of

improvement, as high-quality medical professionals are in short supply. Thailand is

facing a shortage of doctors, especially at public hospitals in rural areas. According to

the Private Hospital Association, it is estimated that 40,000 more doctors are needed

to ensure quality healthcare, but there are only 2,500 graduates every year.

• The „2011 World Health Statistics‟ report by the World Health Organization stated that

in Thailand there are just three physicians for every 10,000 patients, compared to

18.3 in Singapore, 9.4 in Malaysia, 11.5 in the Philippines and 12.2 in Vietnam. This

may be exacerbated as the ASEAN Economic Community takes effect.

• Ageing is also an issue. The population of Thailand is getting old. According to Viroj

Tangcharoensathien, senior adviser of Thailand's International Health Policy

Program, 11% of the Thai population is over 60 years of age and the trend is rising –

more elderly healthcare provision is therefore needed. The proportion of older citizens

in the total population is expected to reach 14% in 2015, 19.8% in 2025 and nearly

30% by 2050.

PHILIPPINES

• The Filipino healthcare system can generally be considered to be of a goodstandard. Healthcare is provided by the Philippine Health Insurance Corp(PhilHealth), which has existed since 1995, and operates the National HealthInsurance Program. It is estimated that the program covers around eight out of tenFilipinos. State spending on healthcare is limited due to constraints on the statebudget.

• In 2010, a major reform effort was made to achieve universal coverage, reduce paymentsand provide more comprehensive cover. Some still remain uncovered however; some ruralareas only have basic primary healthcare.

• The Philippines has a decentralized hospital system setting, wherein the Department ofHealth (DOH) serves as the governing agency for both local government units (LGUs) andthe private sector providing services to communities and individuals.

• The Philippines has a large private healthcare sector in which most expenditure is out-of-pocket, with the remainder being funded through insurance schemes.

• Medical professionals are of a very high standard, training at the top universities in thecountry or outside, usually in the US. This has led to a number of Filipino healthprofessionals being „poached‟ by western countries – such as the UK – who have recruitedFilipino nurses to fill shortfalls. Some areas in the Philippines are still understaffed.

Key Facts

1,921 total hospitals

Private sector hospitals 1,202

State hospitals are much larger than

private and account fro 51% of the

country‟s 93,180 hospital beds

Health Issues

Heart disease

Health expenditure, total (% of GDP) 4.073

Health expenditure, public (% of government expenditure) (no data available)

Health expenditure, private (% of GDP) 2.72

Health expenditure, public (% of GDP) 1.36

Health expenditure per capita (current US$) 96.51

• The private sector, which is much larger than the public sector in terms of human, financial

and technological resources, is composed of for-profit and non-profit providers that cater to

30% of the population.

• Although the private health sector is regulated by the DOH and the Philippine Health

Insurance Corporation, health information generated by private providers is generally

absent in the information system of the DOH.

• Regulation of health science schools and universities is under the Commission on Higher

Education, while the regulation of health professionals is carried out by the Professional

Regulation Commission.

• Some of the top private hospitals in the Philippines:

• St. Luke's Medical Center

• Makati Medical Center

• Asian Hospital and Medical Center

• University of Santo Tomas Hospital

• The Medical City

PRIVATE

HEALTH IN THE

PHILIPPINES

MALAYSIA• Malaysia has a very high level of healthcare, from basic needs to advanced treatment

– GPs to advanced invasive surgery. It may have a low ratio of GDP spend, but its

public healthcare system is one of the best in Asia. This is primarily due to a well-

developed co-existing government and private healthcare system. A significant

amount of coverage and provision is facilitated by private healthcare providers.

• The government is committed to universal coverage and public medical services are heavily

subsidized. For the poor, healthcare is free. A majority of Malaysians have private insurance

policies or pay out-of-pocket for private healthcare expenses. Through this „two-tier‟ system

the population has easy access to primary- and secondary-care facilities.

• The government accounts for around 60% of total healthcare spending in Malaysia, but it is

trying to reduce costs by advancing the private sector as an ever greater healthcare

provider. Malaysia‟s healthcare industry is valued at around US$8.4 billion. The government

is pushing for spending on both public and private healthcare to rise to around 7% of GDP

by 2020 in order for Malaysia to reach developed-country standards. This may be difficult to

meet however, due to Malaysia‟s fiscal consolidation and current budgetary constraints.

• Private and public healthcare demand is set to grow due to an aging population, increased

prosperity and greater consumer awareness of private healthcare services.

Key Facts

358 total hospitals

138 public hospitals

38,394 public hospital beds

2,880 public health clinics

220 private hospitals

6,589 private medical clinics

Major Hospital Groups

KPJ Healthcare Berhad

IHH Healthcare Berhad

Columbia Asia

Ramsey Sime Darby Health Care

Health Issues

Non-communicable diseases such

as heart disease and type-2

diabetes

Dengue fever

Health expenditure, total (% of GDP) 3.58

Health expenditure, public (% of government expenditure) 6.12

Health expenditure, private (% of GDP) 1.95

Health expenditure, public (% of GDP) 1.64

Health expenditure per capita (current US$) 346.01

VIETNAM• Healthcare in Vietnam can generally be described as good to basic cover, but suffers from poor

provision in rural areas. Public healthcare provision is also limited. Private healthcare expenditure

is rising rapidly owing to increasing prosperity coupled with low level state provision. Vietnam –

along with Korea – is reckoned by Big Pharma to have the most corrupt drug purchasing system in

the region.

• In 2010, 60% total coverage was achieved. Vietnam covers its population via a number of programs. One is

the Vietnam Social Insurance Agency, for employees of state-owned enterprises and private companies.

This is employee and employer contribution based – around 5% of salary. Vietnam also runs a Healthcare

Fund for the Poor, with the aim of achieving universal coverage by 2014. Universal coverage, however, is

unlikely due to poor health infrastructure, especially in rural areas, and complications involved in covering

the informal sector.

• The government carries around 30% of total expenditure on healthcare, with households making up the

rest, increasingly via buying their own health insurance packages.

• Most healthcare expenditure is now in the private sector, accounting for over 60% out of an expected total

healthcare spend in Vietnam in 2014 of $6 billion, up from $3.5 billion in 2009.

• There is a big push for private health sector involvement; this is driven by the need to upgrade services, lack

of state finance, and a growing middle class. The Vietnamese government has implemented a number of

laws from 2008 to 2011 to encourage growth and investment in the health sector. The government has

encouraged private investment in the health sector, mostly due to Vietnam‟s broader social mobilization

policy in health; this has been backed by foreign investor tax breaks. The framework for private healthcare

providers is therefore relatively good.

Key Facts

1,063 total hospitals

137 private hospitals

152,000 hospital beds

State hospitals are much larger than

private and account fro 51% of the

country‟s 93,180 hospital beds

Health Issues

Developing country ailments including

rabies, malaria, dengue fever

Tuberculosis

Health expenditure, total (% of GDP) 6.81

Health expenditure, public (% of government expenditure) 9.43

Health expenditure, private (% of GDP) 4.06

Health expenditure, public (% of GDP) 2.75

Health expenditure per capita (current US$) 94.81

SINGAPORE

• Despite the relatively low level of spending on healthcare in Singapore, it has one of the best

healthcare systems not only in SE Asia, but also in the world. Economically, Singapore may have the

world’s most efficient healthcare system. Its facilities are world class and cater from basic services to

highly advanced transplant surgery; many people travel to Singapore for ‘medical tourism’.

• Singapore operates a universal healthcare system through compulsory insurance, subsidies and price

limitations. No medical service is free, despite public insurance schemes and subsides. This is designed to

ration the use of services. Around 70-80% of Singaporeans obtain their medical care within the public health

system via the three major public healthcare finance schemes; Medisave, Medishield and Medifund. Private

healthcare demand is still high however, via private insurance schemes.

• Overall, the „Healthcare 2020 Masterplan‟ aims to add 4,100 hospital beds by 2020, including 1,900

community hospital beds, mainly to cater to the aging population. The government also plans to build four

new acute hospitals between 2020 and 2030.

• In 2014, MediShield will be renamed MediShield Life, the age ceiling (previously 90 years) will be removed

and the compulsory fund will cover all Singaporeans, including those with pre-existing illnesses. The

government has also introduced the Pioneer Generation Package, which will pay for healthcare bills for those

in the late 60s and older. For low-income families, the qualifying age floor of 40 years will be removed from

the Community Health Assist Scheme (CHAS) so that children in these families can also receive subsidized

outpatient medical treatments. Subsidies for lower and middle-income patients at specialist outpatient clinics

will also be increased.

Key Facts

25 total hospitals

10,756 hospital beds

15 public hospitals

10 private hospitals

Health Issues

„Developed country‟ ailments such as

cancer, cardiovascular diseases and

strokes; these account for 60% of all

deaths

Health expenditure, total (% of GDP) 4.56

Health expenditure, public (% of government expenditure) 8.82

Health expenditure, private (% of GDP) 3.15

Health expenditure, public (% of GDP) 1.42

Health expenditure per capita (current US$) 2286.38

BRUNEI

• Brunei has a very good public health care system, in which all citizens are entitled to

free medical care; this is paid for by the state’s rich oil and gas resources. Brunei is

also a very small country at the tip of Malaysia, with a population of around 408,000;

this makes the system more manageable.

• A handful of hospitals are supported by health clinics around the country. These facilities

are of a high level and provide good treatment for all standard medical needs. Health

facilities are very good and a large number of health professionals and doctors receive their

training in the UK, North America, New Zealand and Australia; until recently all medical

training took place overseas as there were no medical training establishments in the

country.

• The government also funds overseas specialist treatment, usually in Singapore and

Malaysia, as part of the paternalist, absolute monarchy „social compact with the people‟.

Key Facts

6 total hospitals

4 public hospitals

2 private hospitals

17 heath centers

Health Issues

Ageing population

Lifestyle related health problems

such as inactivity and smoking

Health expenditure, total (% of GDP) 2.46

Health expenditure, public (% of government expenditure) 8.85

Health expenditure, private (% of GDP) 0.37

Health expenditure, public (% of GDP) 2.10

Health expenditure per capita (current US$) 993.42

MYANMAR, CAMBODIA,

LAOS

• Healthcare in these three countries can generally be characterized as poor and underdeveloped; thecountries themselves could also be categorized the same way.

• Myanmar’s recent political and economic opening has revealed an extremely impoverished andunderfunded healthcare system, which will require substantial investment and time to build up;international donor agencies have recently started working on Myanmar’s numerous public policypredicaments.

• Cambodia and Laos are increasingly being left behind by their SE Asian peers. Rural agriculturally basedeconomies characterize the current landscape. Government care is therefore very basic, although better inurban areas. For the private healthcare sector, there is little demand due to small income levels (see graphto the left on per capita GDP compared to Malaysia). ‘Subsistence incomes’ do not include allocations forprivate healthcare.

GDP per capita

(current US$) - 2011

Data from World Bank

(Myanmar data not available)

Health expenditure per capita

(current US$) 2011

0

100

200

300

400

Malaysia Cambodia Laos Myanmar

0

2000

4000

6000

8000

10000

12000

Malaysia Lao PDR Cambodia Myanmar

Appendix: Digital Healthcare

Across ASEAN

3,784,644,400 43% 57%

Total Asian

Population

Rural

Urban

1,033,688,491Internet Users

27%Internet Penetration

3,110,235,171

Mobile Subscribers

82%Mobile Penetration

ACROSS ASIA

Digital health is growing

in South East Asia – like the rest of the world

eHealth, telehealth, mHealth, social health

THE

APPLICATION

OF DIGITAL

HEALTH

• Telehealth Systems

• Therapeutic & Diagnostic Medical Devices

• Remote Monitoring Devices

• Mobile Health Applications

• Secured Wireless Communication Medical Devices

• Medication Monitoring Equipment

• Mobile Health Devices

• Medical Robotics

• Personal Health Records

• Communications Networks

• Gaming for Health

• ePrescriptions

• Patient communities

• Information websites

SOME EXAMPLES

INDONESIA

• IT and digital technologies are already

being used widely in Indonesia – although

there is a huge need for a joined up

approach to IT systems integration.

• So far in terms of IT integrated

systems, these are limited, usually to one

hospital or one hospital unit, if at all. They

are also all found in high-end private

hospitals. Potential is ripe!

• Digital technologies though are widely

used; according to Edelman Indonesia‟s

„Healthcare Professionals Survey 2013

‟, 4 out of 5 physicians in Jakarta trawl the

internet for work-related information.

Digital is already used in helping doctors

with limited means and services to make

diagnoses.

Dokter Gratis (Free Doctor)

An App for consultation (iOS, Android)

Developed by Warung Kreasi and handled

by Medika Consulting group

At the moment there are 12 general

practitioners to respond to all the chats every

day. Working in shifts, it‟s claimed that a

doctor has the capacity to handle about

1,000 chats per day. The app has so far

been downloaded 130,000 times with around

500 chats happening each day

SOCIAL AND DIGITALSome widely used digital apps…

Dokita (Dokter Kita – ‘Our Doctor’)

An (Android) app service of Dokita.co, one of

the products/ideas by Aibilities;

Patients are able to:

Consult

Submit prescriptions

Purchase medicine & medical items

Aibilities is a startup company focusing on

health issues

DIGITAL HOSPITAL TAKEUP

Our preliminary research shows that digital hospital and healthcare system take up is low. According to our contacts in the Ministry of Heath, patient-centric e-records have been implemented in a limited number of cases. In the small number of hospitals that they have, such as Cipto Mangunkusumo Hospital (RSCM), there is still limited awareness and understanding. The Ministry says there is plenty of scope for improvement.

Most hospitals are still using internal based information systems (HIS), and there are no major digital providers. The only major firm is AdMedika, who provide a Hospital Information System (Hisys); the firm is a subsidiary from Telkom Indonesia.

PHILIPPINES

• The digital landscape in the

Philippines is changing fast. At

present, the Philippines is the

networking capital of the world

and growing as time goes by.

• Seeing the necessity of digital

health strategy, Philippine

healthcare initiatives are now

finding its rightful place in the

digital space. The government

together with the private sector is

pushing forward the digitalization

of Healthcare information and

accessibility for the benefit of the

Filipinos.

DIGITAL HOSPITAL TAKEUP

Government and Private Sector Initiatives

• Digital Healthcare Week 2013 Conference and Exhibition is a one-stop-shop where policy-

makers, senior executives from healthcare providers, care

providers, clinicians, nurses, healthcare IT professionals and technologies companies can come

together for a week of collaboration, sharing and learning for improving the quality of care and

accessibility to healthcare for patients.

Full Information: PHIE Workshop

Private Sector Partnerships

• Last July 2013, Smart Communications, Inc. subsidiary Voyager Innovations, Inc. collaborated

with Asian Hospital and Medical Center to develop a digital health system that will improve

coordination between patients and their healthcare providers.

Full Information: Smart subsidiary partners with Asian Hospital for mobile health project

THAILAND

• Successive Thai governments have aimed

to turn the country into a healthcare hub in

South East Asia; however, the country has

never had a strategy or a policy for

establishing a digital electronic healthcare

system.

• Patient e-records and integrated IT

systems are currently not widely

used, with traditional administration

remaining the primary system for keeping

patient records.

DIGITAL HOSPITAL TAKEUP

• There is one example of digital and IT systems beginning to be integrated into

healthcare. A Thai IT company has developed its own innovative

application, Tele Diang, which could ease problems associated with the

country‟s shortage of radiologists by offering a pioneering tele-radiologist

service.

• The solution allows radiologists to access the system from other hospitals or

even from home via the internet and view the images and send back their

interpretations.

• This has so far been adopted by at least 20 hospitals nationwide, including

Praram 9 Hospital and Vejthani Hospital in Bangkok, Srisawan Hospital in

Nakhon Sawan province and other provincial hospitals.

MALAYSIA

For digital healthcare providers, big opportunities; from

2010-2014 the government is making a push to expand

the use of IT in medical care, health education and

health services system management. It is pushing

“telemedicine” which allows for virtual medical

consultation and training.

However…

This is a very ambitious national initiative and has failed

to get large-scale traction due to a lack of knowledge and

execution capabilities.

DIGITAL HOSPITAL TAKEUP

With the slow nation-wide take up of digital healthcare, hospitals

in both the public and private sector have been installing their

own system networks – on a case by case, individual hospital by

individual hospital basis.

There is definitely demand for technology and integrated

systems, but no grand joined up strategy at present, such as in

the UK.

VIETNAM

• In Vietnam, digital healthcare is

so far mainly convened to

administrative systems, although

„telemedicine‟ is also beginning

to be taken up. Digital healthcare

growth potential is therefore

strong.

• Predominantly, e-health

applications are so far used to

support the management and

administration of health

services, reduce arbitrary work

pressure for staff of health

facilities, and improve the quality

of Information.

DIGITAL HOSPITAL TAKEUP

• In hospitals, the term e-health is understood

so far as a software system for the purpose

of public health, mainly free

software, provided by the state.

• Current examples include

• Medisoft (by MOH): the

standard software for all

hospital statistic medical reports

• Healthnet

• Goodsoft

• E-Health (by IBOSS Vietnam)

• The introduction of „Telemedicine‟ has

recently been picked up, and some systems

are used in tele-consultation, tele-surgery

assistance, tele-imaging, and tele-

cardiology. This has proved very popular

with medical professionals and patients.

BRUNEI

• The Government of Brunei aims to have a single electronic

health record that is accessible from any government

hospital, clinic or healthcare centre.

• It has signed an agreement to develop the Brunei

Healthcare Information System (Bru-HIMS), a nationwide

project to digitise patient care documents and provide

electronic medical records.

• iSoft and Ishajaya Technology have been commissioned

to build the framework of the digital healthcare system that

will provide access to patient data, identity

management, process automation for administrative and

clinical departments, workflow design and

resource scheduling.

DIGITAL HOSPITAL TAKEUP

• Brunei was the first country in the region to have telemedical

facilities that allow patients to access stroke specialists in

Germany without stepping out of Southeast Asia.

• Telemedicine has helped connect Jerudong Park Medical

Centre (JPMC) doctors and patients with specialists from

overseas through satellite technology, video conferencing and

data transfer through phones and the Internet, a strategy that

will put it closer to its bid to lure medical tourists.

• Telemedicine has also helped connect doctors and nurses of

Neuroscience Stroke Rehabilitation Centre (NRSC) with

Krakenhaus Nordwest Hospital in Frankfurt, Germany through a

protected data line to allow for assessment, interpretation, and

reporting of MR-I and CT imaging.

Appendix: Thoughts for Pharma

Pharma Market – South Asia Region

US$ 40.5bn, YoY +5.5%

-1.6%

+9.7%+12%

+8.7%

+3.6%

+5.7%

+6.2% +20.6%ASEAN is

thus about

$15.4-

$16.5bn

Source: an MNC client’s market assessment

Of this our client reckons

MNCs have just 20% Rx

& 11% OTC market share

in Indonesia – but Rx

growth c. 16%

Drugs Spend And Market Size

Source: World Health Organization

Thailand is key for regional pharma –large predominantly public spend. Thailand also has the second biggest market size.

Malaysia is also big spending– mostly private, despite its small market size.

Vietnam is mostly private spend, despite large state healthcare provision.

The Philippines is almost entirely private spend.

Indonesia’s market potential is huge – biggest economy and population in the region with solid growth rates – but from a low

base.

Stephen Lock

Edelman Indonesia

Stephen.Lock@edelman.com

THANK YOU