Healthcare is in the policy spotlight in Southeast Asia, and indeed, in Asia generally. The Economist Events’ Health care in Asia 2014 summit in Singapore is shining a light on many of these important issues, such as the policy trends and healthcare models driving change across the region. Demand for healthcare in the region is rising rapidly. Increasing populations and increasing affluence are but two of the reasons. People in Southeast Asia are demanding better provision and better quality.
The World Health Organization states that health expenditure per capita in ASEAN is around 4 percent of GDP; that’s pretty low. The OECD average, in comparison, is around 12 percent. However, overall health expenditure has increased two and half-times between 1998 and 2010, reaching over $68 billion.
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 demand better services for their hard earned taxes. They will not be satisfied with poor level provision for long. The South East Asian nations of ASEAN vary widely in development, incomes and economies. This is also true of healthcare.
In terms of public healthcare, spending is generally low in ASEAN, apart from in Thailand and Brunei. The public healthcare environment is therefore developing and being increasingly sidestepped by a rapidly growing private sector. The citizens of Southeast Asia though are beginning to demand better public healthcare, for reasons not dissimilar to Brazil. Southeast Asians expect their governments to do more.
Indonesia is the latest country to put universal healthcare at center stage; where previously 125 million plus lacked state health coverage, or state or private health insurance. The government has started to introduce basic universal health coverage from 1st January 2014, to provide 140 million Indonesians with health coverage: it aims to have truly universal coverage by 2019.
Along with the demand for better and more comprehensive public provision, we are also seeing a rapidly growing private healthcare sector, not to mention a boom in medical tourism. Across the board – from Indonesia, the Philippines, Thailand and Vietnam – the state is being sidestepped by an increasingly prominent private healthcare sector. States are loosening laws on private healthcare to entice investors; the realization that the private sector is an important partner and complement to the public sector is beginning to set in.
In Indonesia, the government wishes to encourage more private sector involvement and suggested revising the Negative Investment List to allow for more foreign private sector investment. In the Philippines too, investments in (Public-Private Partnerships) PPPs are big. The government needs private sector cash to sustain state provision. In Thailand, private investment is growing at breakneck speed as demand for good quality provision grows and government provision falls behind (this is also boosted by a growing medical tourism sector within the country). In communist Vietnam, private healthcare is also on the march. Southeast Asia truly is going private and there are big opportunities for private healthcare providers and health related firms.
In conclusion, from both the public and private sector, demand is growing. The future of healthcare in Southeast Asia is exciting and the journey is just beginning. In the years ahead, Southeast Asia will have to deal with ‘new’ healthcare problems: an increase in type-2 diabetes, obesity (as well as the ongoing issue of stunting and malnutrition), and an ‘epidemic’ of HIV/AIDs. These are just a few of the already emerging health trends across the region. Tackling these challenges and growing quality healthcare alongside growing the size of the economy is therefore vital for the region’s future health.
For a more detailed overview of healthcare across the region and the big healthcare themes for 2014, please take some time to view Edelman’s presentation.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of The Economist Intelligence Unit Limited (EIU) or any other member of The Economist Group. The Economist Group (including the EIU) cannot accept any responsibility or liability for reliance by any person on this article or any of the information, opinions or conclusions set out in the article.
