Indonesia and Vietnam Healthcare Outlook 2012
Where are the healthcare opportunities in these emerging marketsWhere are the healthcare opportunities in these emerging markets
Rhenu Bhuller, VP – Asia PacificHealthcare
29 June 2012
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Today’s PresentersToday’s Presenters
Rhenu Bhuller, VP, Healthcare-Asia Pacific Frost & Sullivan
• Rhenu Bhuller has close to 20 years of healthcare industry knowledge, including more than 10 years of consulting expertise in the pharmaceutical and biotechnology sectors. She is an industry expert and has particular expertise in new market and therapeutic area analysis; sales, marketing and business planning; market entry and business strategy; strategy discussions with c-suites, government officials, etc.
• She is a regular keynote speaker at industry conferences and is also often featured in the media, such as BBC, Bloomberg, CNN, and CNBC.
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Globalization, consumerism and prosperity are the major trends that will impact healthcare in SEA
Globalization: • World is becoming smaller: cheap air- travel, connectivity, internet, medical tourism• Increased healthcare awareness because of multiple media
Consumerism: • Increased self medicating behaviour; ease of access (online)• Increased expression of consumer individuality through brand choices
Prosperity: • Increasing disposable income, financial independence leading to exploring more choices• Increased health awareness has led to consumers spending more on health prevention and OTC
2 3
1
Source: Frost & Sullivan
INFRASTRUCTURE
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APAC among the fastest growing economies over the next 5 years
Source: Data in the above charts were based on GDP per capita data in the respective country’s national currency as sourced from the WEO online database. The data above was converted to US dollar based on the currency conversion rate for the respective years. Analysis by Frost & Sullivan
Australia
CAGR 2.9%
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Diverse population structures with varying levels of purchasing power
Sources: World Economic Outlook (WEO), World Bank and countries data. CAGR data is for 2006 to 2016
Lower economic profile,
rural areas
Increasing consumer power
•Rural population, low income, relies on government support. •Upwardly growing middle class, living in tier 2 cities, educated, can pay for some level of healthcare• High income category, first adopters of new technology, services, private HC
Governm
ent dependant f
or
basic HC
Growing middle class
Private
insura
nce, co-p
ay
High income, 5-10%
of population
Self pay, m
edical touris
m
Austra
lia
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• Per capita healthcare expenditure is far below global average (lowest is Vietnam and Indonesia).
• Shortage of healthcare professionals in both countries.
• Efflux of medical tourists seeking treatment in other countries; 400,000 Indonesians patients travel annually.
Market Restraints
• Growing middle-class population in Indonesia; per capita income expected to grow from $2,580 in 2011 to $3,500 by 2015.
• Rise in non-communicable disease incidence, cardiovascular disease will account for 31 percent of total number of deaths in Indonesia by 2030, followed by other chronic diseases at 28 percent.
• Vietnamese government intervention to enhance healthcare workforce by 2020.
Market Drivers
Total Indonesia and Vietnam Healthcare Market Size
CAGR12.7%CAGR12.7%
CAGR8.7%
CAGR8.7%
Healthcare Industry: Revenue ForecastIndonesia and Vietnam, 2011–2015
Source: Frost & Sullivan analysis.
0.0
2000.0
4000.0
6000.0
8000.0
10000.0
12000.0
2011 2012 2013 2014 2015
Year
Indonesia 5549.30 6016.30 6515.90 7072.10 7742.50$ (Billion)
Vietnam 2647.20 2970.40 3332.70 3746.80 4266.50 $ (Billion)
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Indonesia—Healthcare System
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Indonesia—Healthcare Indicators
Healthcare Indicators: Indonesia, 2007–2011
Key FeaturesKey Features
• The population of the country as of 2010 stands at 238.0 million people. It is recorded as the fourth most populous country in the world.
• The population of the country is expected to grow at a consolidated pace of 1.0 percent for the 2010‒2015 period.
• Life expectancy at birth has increased by 16 months per person from 2007 to 2011, and decreasing mortality rates are a result of improving healthcare services.
• The population of the country as of 2010 stands at 238.0 million people. It is recorded as the fourth most populous country in the world.
• The population of the country is expected to grow at a consolidated pace of 1.0 percent for the 2010‒2015 period.
• Life expectancy at birth has increased by 16 months per person from 2007 to 2011, and decreasing mortality rates are a result of improving healthcare services.
Healthcare Indicators 2007 2008 2009 2010 2011
Population (Million) 226 229 232 238 245
Population Growth Rate (%) 1.3 1.3 1.3 1.07 1.04
Birth Rate (per 1,000) 19.65 19.24 18.84 18.10 17.76
Mortality Rate (per 1,000) 6.90 6.85 6.80 6.28 6.26
Life Expectancy (Female) (years) 72.7 73.1 73.4 74.0 74.3
Life Expectancy (Male) (years) 67.6 68.0 68.3 68.8 69.1
Source: IMF, CIA World Fact Book, Indonesian Department of Health, Frost & Sullivan analysis.
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Disease Information – Major Causes of Death
Source: Indonesian Association of Medical Doctors (Ikatan Dokter Indonesia, or IDI)
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Indonesia—Health Care Delivery System
Healthcare System
Public Private
MOH Hospital
Provincial Hospital
District Hospital
Puskesmas Pustus and
Mobile Clinics
Specialty Private
Hospital
General Private
Hospital
Private Clinics
Source: Ministry of Health and Frost & Sullivan analysis
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Indonesia—Hospital Categorization
Hospitals (General and Specialty)
Public Hospital
Private Hospital
Class A (>400 beds) = 10
Class B (100-400 beds) = 120
Class C (50-100 beds) = 250
Class D (<50 beds) = 126
Extensive specialist medical services + extensive sub
specialists Extensive specialist medical
services + limited sub specialists
Has minimum of four basic specialist medical
services
Provides basic medical facilities
PriorityGeneral medical services + specialists and sub-specialists
Madya
Pratama
Minimum four specialists medical services
General medical service
Source: Indonesian Department of Health, Frost & Sullivan analysis
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Indonesia—Hospital Classification
Public (Ministry of
Health)36%
Public (Military)
8%
Public (State or other govt dept-owned)
5%
Private51%
Percent of Hospitals by Type and Sector, Indonesia, 2010
Mental 15.3% Leprosy
6.6%Pulmonary
TB3.0%
Eye3.9%
Maternity 19.5%
Pediatric32.1%
Others19.5%
Percent of Specialist Hospitals Split by Specialty, Indonesia, 2010
Source: Indonesian Department of Health, Frost & Sullivan analysis
Hospital Classification by Type Hospital Classification by Specialty
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Number of Hospitals: Regional Spread
Source: Ministry of Health, Indonesia
BaliNo. of hospitals:
34
Sumatra SelatanNo. of hospitals:
34
DKI JakartaNo. of hospitals:
124
Sumatra UtaraNo. of hospitals:
130
Sumatra BaratNo. of hospitals:
41
Sulawesi SelatanNo. of hospitals:
62
Jawa BaratNo. of hospitals:
144
Jawa TengahNo. of hospitals:
162
AcehNo. of hospitals:
35
Jawa TimurNo. of hospitals:
171
Hospitals are concentrated in major cities in the Sumatra and Java province, such as Jakarta, Surabaya, Medan.
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National Health Strategic Plan: Infrastructure Targets
• Aim to increase the number of community health centers from 9,133 in 2010 to 10,856 in 2014• Develop hospitals to achieve a ratio of 1 bed per 1,000 population in 2014• Indonesia also aims to achieve sufficient numbers of medical professionals:
Source: Indonesia Human Resource for Health; Development Plan, 2010Regional Health Forum, 2006
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Indonesia—Healthcare Expenditure Forecast
Health Industry: Healthcare Expenditure Forecast by TypeIndonesia, 2007–2015
5.1 5.7 7.8
10.3 12.1 13.6 4.3 4.7
7.3
9.5
11.312.8
0.00
5.00
10.00
15.00
20.00
25.00
30.00
2007 2008 2009 2010e 2011e 2012e
Expe
nditu
re
($ B
illio
n)
Private Government
2013F 2014F 2015F
Private Expenditure 14.66 16.96 19.95
Government Expenditure 15.44 17.44 19.95
0.005.00
10.0015.0020.0025.0030.0035.0040.0045.00
Go
ve
rnm
en
t v
s P
riv
ate
H
ea
lth
Ex
pe
nd
itu
re (
US
D
bill
ion
)
Source: EIU, World Bank, Frost & Sullivan analysis
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Indonesia—Health Insurance Coverage
Scheme Target Population Funding Source(s) Enrolment (% of
insured)
Jamkesmas (Askeskin)
Poor and near poor, based on individual and household targeting
General revenue (100% funded by central government)
32.3
Jamkesda Poor and near poor, homeless, orphans and non-civil service teachers
District/Out‐of‐Pocket, Based on affordability
13.5
Askes Active civil servants and dependents, civil service and military retirees
Member contribution of 2 percent of salary plus government match of 2 percent
7.4
Jamsostek Private formal sector employees (and dependents) of firms with ten or more employees
Member contribution of 3 percent of salary for singles, 6 percent for families
2.1
Private Health Insurance
Private formal sector employees and dependents
Out‐of‐pocket 7.7
Not insured 37.0
Health Insurance Coverage, Indonesia, 2010
. Source: MOH, Frost & Sullivan analysis
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Vietnam—Healthcare System
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Vietnam—Healthcare Indicators
Key FeaturesKey Features
• The population of the country as of 2010 stands at 88.3 million people. Vietnam’s population size is expected to expand about 9.2 percent from 2006 to 2014, and is likely to grow 1.0 percent annually from 2010–2014.
• The increase of life expectancy (73.9 years in 2006 to 74.7 years in 2010) have led to an increase in aging population.
• The population of the country as of 2010 stands at 88.3 million people. Vietnam’s population size is expected to expand about 9.2 percent from 2006 to 2014, and is likely to grow 1.0 percent annually from 2010–2014.
• The increase of life expectancy (73.9 years in 2006 to 74.7 years in 2010) have led to an increase in aging population.
Healthcare Indicators 2010
Population (M) 88.3
Population Growth Rate (%) 1.0
Birth Rate (per 1,000) 17.0
Mortality Rate (per 1,000) 6.8
Life Expectancy (Female) (years) 74.7
Life Expectancy (Male) (years) 69.5
Source: Datamonitor, Worldbank, http://vietnam.unfpa.org, Frost & Sullivan analysis
Healthcare Indicators: Vietnam, 2010
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Source: World Health Organization, 2009, Frost & Sullivan analysis
Vietnam—Major Causes of Death
Major Causes of Death: Vietnam, 2010
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Vietnam—Health Care Delivery System
Source: Department of Health, Vietnam; Frost & Sullivan analysis
Healthcare Delivery System: Vietnam, 2010
Government
MINISTRY OF HEALTH•14 Department and Administration•The Cabinet•Inspectorate
Provincial People’s Committee
PROVINCIAL HEALTH SERVICE•Office•Inspectorate
PROVINCIAL HEALTH SERVICE•Office•Inspectorate
People’s Committees at District
People’s Committees at Communes
COMMUNAL HEALTH CENTRES•Head•Healthcare Workers
Professional Units under Ministry •Curative:30 hospitals with beds•Preventive:17 institutes or centres•Quality Control: 5 institutes or centres•Training:14 schools or colleges•Centre for health education and communication :17 units
Professional Units under the PHS •General and specialized hospitals for curative care•Preventive Health Centres•Quality Health Centres•Training Middle Level Schools or Colleges•Centre for health education and communication
•District General hospitals •Clinics
•District Preventive Health Centres
Village Health Workers
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Type Department Descriptions
Provincial Health Department of the Province of the People’s Committee
• 304 general and specialist provincial hospitals in 64 provinces, mostly with 50–100 beds and consultation and treatment rooms.
• 64 preventive medicine centres, 61 medical secondary schools, and 61 pharmaceutical companies.
District Health Department of the District of the People’s Committee
• 3,014 medical specialist groups and 1,507 hospitals and polyclinics (more than 600 hospitals nationwide)
• About 100 beds in each of the hospitals; focus is on obstetrics, geriatrics, and paediatrics
Commune Health Station of the Commune of the Peoples Committee
• More than 10,600 commune health stations, with 4–6 beds, a delivery room, and a cabinet stocked completely with medicines.
• Staffed with doctors, pharmacists, and nurses who transport serious cases to district and central hospitals.
• Volunteers involved largely in providing immunization and family planning services.
Vietnam—Classification of Public Health System
Source: The National Bureau of Asian Research, US and Frost & Sullivan analysis
Public Healthcare Infrastructure, Vietnam, 2009
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Vietnam—Key Health Care Infrastructure Statistics
Infrastructure 2006 2007 2008 2009CAGR %
(2006–2009)
Total Number of Hospitals 903 956 974 1,002 2.6%
Regional Polyclinic 847 829 781 682 (5.3%)
Sanatorium and Rehabilitation Hospital
51 51 40 43 (4.2%)
Medical Service Units in Communes, Precincts
10,672 10,851 10,917 10,979 0.7%
Total Number of Beds 1,31,500 1,42,800 1,51,800 1,63,900 5.7%Number of Beds Per 10,000 Population
23.8 25 25.8 27.1 3.3%
General Doctors 52,800 54,800 57,300 60,800 3.6%
Assistant physician 48,800 48,800 49,800 51,800 1.5%
Nurses 55,400 60,300 65,100 71,500 6.6%
Midwives 19,000 20,800 23,000 25,000 7.1%
Pharmacist 16,300 18,100 19,700 21,600 7.3%
Source: General Statistics Office (GSO) of Vietnam, Frost & Sullivan analysis
Public Healthcare Infrastructure Statistics: Vietnam, 2009
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Vietnam—Regional Spread of Healthcare Infrastructure
Central hospitals in Vietnam are facing a shortage of beds; in some hospitals, a single bed is being shared by two or sometimes even three patients. GSO statistics show that there were just 2.58 hospital beds per 1,000 people in Vietnam in 2008. According to MOH, demand for beds in provincial hospitals is 115.0 percent while in major cities it is 250.0 percent.
Source: Ministry of Health Vietnam, Frost & Sullivan analysis
Hospital Description
Hanoi
Bach Mai Hospital It is a multi-field medical facility and one of the largest in Vietnam, recognized as one of the three specialized medical centres specializing in internal medicine.
L’Hôpital Francais de Hanoi
The hospital stands as a 68-bed multi-disciplinary care facility offering essential medical and surgical services, supported by 20 rotation doctors and 93 qualified nurses.
Viet Duc Hospital It is the largest surgical centre in Vietnam. The hospital has more than 500 beds for patients and 18 surgery rooms and can perform over 800 open-heart operations annually.
Central Vietnam
Hue Central Hospital The hospital is one of three largest in the country, providing 2,078 beds. HCH is organized into 52 clinics and para-clinic departments, notably the Cardiovascular Center, Blood Transfusion Center, and Training Center.
Ho Chi Minh City
Chợ Rẫy Hospital It is the largest general hospital in Ho Chi Minh City. At present, the hospital has 35 clinical, 11 subclinical, and 8 functional departments.
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Vietnam—Healthcare Expenditure
Government and Private Expenditure on Health: Vietnam, 2006–2012
Source: WHO, Frost & Sullivan analysis
2006 2007 2008 2009 2010 2011 2012
Private Expenditure 2.63 2.98 3.98 4.19 4.53 4.77 5.02
Government Expenditure 1.29 1.99 2.05 2.52 2.76 3.01 3.25
0.001.002.003.004.005.006.007.008.009.00
He
alt
hc
are
Ex
pe
nd
itu
re($
Billio
n)
26
Mega Trends and Healthcare Market Trends
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Key Mega Trends impacting Indonesia and Vietnam
Low Probability of Success
Deg
ree
of
Imp
act
Lo
wH
igh
High
Urbanization
Generation Y
Increase in Working Age
Population“She-conomy”
The Middle Bulge
Wealth Watchers
Future Economic Growth
Space Jam
Connectivity
Innovating to Zero
E-Mobility
Future Infrastructure
Top Industries of the Future
“Value for Many” Business Model
Health, Wellness and Well Being
Future Energy Power Generation
Private public partnerships
E-Governance
“Click-n-Connect”Mobile users
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What’s Trending for Indonesia Between 2012 and 2015
Indonesia’s per capita expenditure on pharmaceuticals is expected to remain below the US $30 mark by 2015 as patients continue to be responsible for the bulk of their medical bills.
Indonesian health ministry established a supervisory body, the Indonesian Hospitals Supervisory Agency (BPRSI), in Nov 2011.
The University of Indonesia is constructing a new hospital at its Depok campus; the Japan International Cooperation Agency will provide a loan of $158.0 million to the university to establish UI Hospital.
Indonesian Q3 GDP growth came in at a strong 6.5 percent year-on-year for 2011.
As of December 2011, the Indonesian health insurance program for the poor, Jamkesmas, covered 76.4 million people.
In Q4 2012, some of the major reforms announced by Indonesian MOH include a merger of ASKES and JAMKESMAS, and five committees are now working to set the insurance system.
Source: Frost & Sullivan analysis
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Examples of investments into Indonesia
Philips supplied most of $140m in medical equipment for the first dedicated cancer research centre and the biggest hospital in Indonesia. Philips, which has group sales of $32bn and 120,000 employees, has set up a regional headquarters in Singapore with almost 300 staff with a view to increasing its share of the medical and home healthcare products in Indonesia, the Philippines and Vietnam.
Singapore-based Invida Group, a specialty biopharmaceutical company announced a joint venture with the local Indonesian drug manufacturer PT MUGI Laboratories. Under the terms of the agreement, Invida will seek to expand its operations in Indonesia to include the importation of raw materials and auxiliaries and the manufacture of pharmaceutical products.
A state pharmaceutical company PT Bio Farma announced that it is to spend USD 60 million on a facility to produce blood plasma products, including albumin and Factor IX. The plant will be the first of its kind in Indonesia and will be built using assistance from South Korean and Australian pharmaceutical companies, based on guidelines stipulated by the WHO.
Sources: Company websites, Frost & Sullivan
Siemens in Indonesia has provided support to public and private hospitals by installing computed tomography, magnetic resonance imaging systems, and angiographic systems, as well as conventional x-ray units and life support systems. Siemens supplied the first 128-slice computed tomography (CT) Somatom Definition AS+ in Indonesia.
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In Vietnam, new health service facilities are expected to be charged an
enterprise income tax of 10% rather than the previous 28%.
Quality of public hospitals in Vietnam is likely to improve following the
establishment of private hospitals by Singapore-based Thomson International and Pacific Healthcare, Malaysia-based
Columbia Asia and the French Hospital of Hanoi, owned by the French company
Eukaria S.A.
Vietnamese government’s health care development plan, extending to 2020,
aims at doctor patient ratio of 8, pharmacists of 2, and 25 hospital beds
per 10,000 patients. Vietnam’s healthcare expenditure is
growing in next five years with its healthcare spending as a % of GDP surpassing most ASEAN countries,
forecasted grow up to 8.3% of GDP in 2014.
Vietnam government aims to modernize traditional medicine by 2020. According to
a plan, hospitals that offer traditional alternatives to patients will receive new
equipment in 2015
What’s Trending for Vietnam
Source: Frost & Sullivan
Regulatory reforms, ASEAN harmonisation
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For Additional Information
Donna JeremiahCorporate CommunicationsAsia Pacific+61 (0) 8247 8927 [email protected]
Carrie LowCorporate CommunicationsAsia Pacific+603 6204 [email protected]
Dewi NurainiCorporate CommunicationsIndonesia+62 21 571 [email protected]