Southeast Asia’s diversity isn’t just centered around culture, history and geography. Countries in the region are also experiencing different levels of urbanization and developments — including their healthcare systems.
Home to around 40% of the world’s poor (according to 2017 data by The Borgen Project), the region still struggles to adapt to technological innovations and the digital shift of one of its most important industries.
The most pressing concern, however, is the changes that will occur for the healthcare system in Southeast Asia over the next two decades. Within this time, expectations have determined that the population size of older individuals (aged over 65 years) will jump from 7% to 14%. This rapid aging in the population could also increase stress on the already-exhausted healthcare systems within various countries in SEA, reads The Borgen Project article.
Then add the COVID-19 factor — the current most challenging medical battle Southeast Asia (and the world) is trying to overcome but still too far from winning. Most countries in the region, dubbed “success stories” in 2020, have now become virus hotspots, recording no less than 10,000 new infections every day.
A recent study by RedSeer, an internet-focused consulting firm in India, revealed that Southeast Asia’s healthcare expenditure to GDP averages at 4.5%, way lower than the global average of 9%.
Delay in receiving care from inefficient processes, as well as the shortage of medical experts, are said to be the underlying problems found throughout the region’s patient journey.
The patient journey in SEA faces numerous bottlenecks, long wait times at the forefront of the problems dealt with by most patients. Manual patient check-in and check-out lead to long queues during the initial registration process, physician check-up, and pharmacy visit. The average patient in SEA will need two hours for a single doctor visit before factoring in travel time. Additional paint points shared by most patients are physician proximity to home and patient to doctor ratio, wrote RedSeer.
But even with the mounting obstacles, the region has made healthcare improvements over the last few years, with the rise of private and government-funded hospitals, the expansion of medical insurance packages and the growing number of medical professionals.
National governments have also made it their priority to increase budgets in their healthcare systems to accommodate growing populations.
Vietnam, in particular, is leading Southeast Asia with the highest healthcare expenditure to GDP at 6%, a percentage point higher than Singapore.
In 2019 alone, Vietnam’s healthcare expenditure reached approximately $17 billion, equivalent to 6.6% of the country’s GDP, and it’s expected to increase to $23 billion in 2022, at a compound annual growth rate of 10.7%.
Medical and economic experts said that even with the fourth outbreak currently dampening economic activities in Vietnam, the health sector remains a top priority and concern for the government.
Indonesia, meanwhile, trails behind its regional peers at only 3%. Along with Singapore’s, India and Malaysia’s healthcare spending stand at 5%.
For comparison, the US and UK’s average healthcare expenditures to GDP are at 17% and 10%, respectively.
Universal health care coverage rolled out in Indonesia, the Philippines, and Thailand will help these countries achieve higher coverage levels. Higher GDP per capita will also support individual healthcare expenditure. A long-term goal for SEA is to achieve the OECD average healthcare expenditure per capita at ~$5000 per annum, according to RedSeer.
Opportunities for e-health
Southeast Asia’s lagging healthcare sector presents huge opportunities for growth. While the region still lacks modern systems most developed countries have already been using for a decade, Southeast Asian countries have actually seen an influx of deals within the last five years.
RedSeer wrote that since 2017, the region has gained nearly 3x growth in the number of funding deals. This year, funding has focused on telemedicine, and just last month, a Singapore-based industry player received over $60 million in funding with a total of $100 million raised since 2017.
Telemedicine has also sparked the interest of digital ecosystem players including the ride-hailing and fintech segments. Recently, consumer tech players have collaborated to unleash an array of healthcare use cases easily accessible from popular on-demand apps. We can expect digital ecosystem players to fine-tune their e-health partnerships and offerings with a focus on the patient experience.
It’s seen that Indonesia and Singapore, which account for more than half of the market size, will be leading digital health innovation. Other countries, especially Vietnam, will play supportive roles in pushing for the digitalization of the healthcare ecosystem.
Given how the pandemic revealed the importance of easily accessible online health services, RedSeer also foresees the e-health sector to grow 10x by 2025. Within this, digital diagnostics, consultations and pharmacy segments are estimated to capture 70% of the market by 2022.
When further strengthened, the region’s e-health sector can accelerate progress towards universal health coverage, where people have equitable access to quality services at reduced costs.