Combined, the 10 member states — Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam — account for almost 9% of the global population with the grouping’s annual economic growth expected to remain relatively high, at about 7%, by 2020, outpacing many other countries and regions.
Indonesia, the region’s largest economy and most populous nation, accounts for 38% of Asean’s economy and 40% of its population. It is among the world’s 15 most populous countries, along with the Philippines and Vietnam, which are respectively expecting to achieve economic growth of 7.6% and 11.1% a year until 2020. Singapore, Thailand and Malaysia posted a combined gross domestic product (GDP) of about US$980.97bn in 2015 with expected annual growth ranging from 5.0–11.7% by 2020. Annual economic growth looks positive in other Asean economies and is expected to exceed 8% a year in Brunei, Laos, Cambodia and Myanmar within the same period.
The Philippines and Vietnam are among the fastest-growing Asean economies. The Philippines government has spurred economic growth through infrastructure development which has improved job opportunities and increased household spending. Vietnam has signed trade agreements with EU countries, which are expected to fuel further growth.
Healthcare in Asean’s emerging countries
Improving economic development across Asean is driving the healthcare industry’s development. Singapore, Thailand and Malaysia have benefited from the rise of global medical tourism which supports quality healthcare facilities, medical professionals, hospitality and related services. Other Asean countries have started implementing universal healthcare policies to support local demand for higher quality affordable treatment, as well as to fulfil UN Sustainable Development Goals by 2030. Laos and Cambodia have partially implemented universal healthcare covering about 12% and 17% of their popula tions respectively. Myanmar is also making steps towards universal coverage with its Myanmar Health Vision 2030.
Indonesia, Vietnam and the Philippines, which have led regional growth in healthcare over the past three years due to their on-going universal healthcare programs, exhibit some of the sector’s strongest near-term potential within the region.
The three countries are also expected to see growth in their elderly populations at about the same annual rate as the general population, which is forecast to rise by 3-5% a year until 2020. The incidence of chronic diseases and healthcare expenditure will also increase as these societies continue to age. These trends, supported by the gradualimplementation of universal healthcare policies and the development of healthcare infrastructure, are forecast to see Indonesia, the Philippines and Vietnam post the strongest growth in total healthcare expenditure, ranging from 8–10% a year by 2020.
The shortage and uneven distribution of medical professionals, a low per-capita ratio of hospital beds, and relatively high out-of-pocket healthcare expenses are key challenges for the industry across the three countries. National health insurance will play a critical role in facilitating access to healthcare and reducing out-of-pocket expenses.
Thailand provides a strong regional example of these benefits. Within a year of implementing its universal healthcare programme in 2002 it reduced out-of-pocket expenses from 21.5% to about 8% of total health expenditure. Current out-of-pocket expenses in Indonesia, the Philippines and Vietnam provide a stark contrast, accounting for 36% to 54% of total healthcare expenditure in 2014 despite the gradual rolling out of universal health coverage.
- Clear market segmentation is crucial
- Regional disparity affects patient outcomes
- Partnership with industry stakeholders is critical for understanding the evolving market landscape
- Expanding healthcare market will increase competition