KUALA LUMPUR, Malaysia, Jan. 27, 2016 /PRNewswire/ -- Malaysian healthcare expenditure could rise as high as USD20 billion by 2020 due to the rising incidences of chronic diseases, increasing healthcare costs especially in Wilayah Persekutuan and Selangor due to urbanisation, and a weak ringgit.
While the public sector is hampered by limitations in healthcare budget and the ability to retain experienced talent, the private sector is gearing up to meet competitive challenges with a stronger, more innovative play that is targeted to provide both financial and social returns. One of the key areas for development is further public and private healthcare integration and a social health insurance platform that can enable a more balanced healthcare environment within the country.
At a market size of close to USD500 million, the Asia Pacific Healthcare market (consisting of pharmaceuticals, medical devices and healthcare technology) represents 30% of global revenues, and is still the fastest growing region globally with a growth rate of 11.5% projected for 2016 (in comparison, the global projected growth rate is 6.9%).
Some of the key developments forecast for the industry in Asia and Malaysia are:
- Primary care chains are expected to expand integrated services spanning across diagnostic and preventive care, strengthening primary care as the first point for healthcare services.
- Growth in private health insurance due to awareness of rising healthcare costs and awareness campaigns by insurance companies and Governments push for shared spending.
- Governments are moving towards value-based healthcare, making it imperative for healthcare product providers to build business models that incorporate risk sharing demonstrating quality of their products.
- Local manufacturing gains importance within the ASEAN environment due to strengthening US dollar and high percentage of healthcare imports.
- Increasing presence of Japanese healthcare products and services in the region as Japan goes beyond borders.
- Innovative healthcare delivery models such as 'doctor at your door' and at-home blood collection services could create an increased migration of healthcare services from in-lab or hospital setting to a consumer driven point of care setting.
- Increasing access to health information and provider information for consumers drives medical tourism, albeit in a much more competitive environment.
- Use of technology to drive efficiency; ease resource pressures in healthcare delivery.
Malaysia is well-positioned to harness opportunities in the healthcare services industry especially in areas such as primary care, specialty services, diagnostics services, medical tourism and aged care.
According to Ms. Rhenu Bhuller, Partner at Frost & Sullivan, healthcare services in Malaysia as well as in neighbouring countries like Singapore, especially in the public sector, are facing capacity constraints.
"In early 2014, the bed occupancy rate (BOR) in Singapore was 87.2% with an increase of 1.4% compared to that in the previous year. The Malaysian public sector is under similar pressure with 1 out of 4 hospitals having a BOR of more than 85%. This is creating opportunities to develop infrastructure, use technologies and new business models in delivering healthcare services to satisfy both local demand as well as foreign patients that use healthcare services in Malaysia. States like Johor will continue to see investments in private healthcare delivery in areas such as aged care and integrated healthcare," she said.
Currently, per capita spending on health and both public and private healthcare expenditure is expected to continue its upward trajectory. Driven by issues such as urbanisation, chronic diseases (especially diabetes), and vector borne diseases (like dengue), delivering quality healthcare services with current budgets and resources will be a challenge.
"Malaysia needs to further develop healthcare resources, particularly specialists and ancillary healthcare workers, and technical healthcare skills as there is a resource gap," said Ms. Bhuller. "As Malaysia is continuing to work towards attracting investors as well as medical tourists, areas such as resources and technology application, as well as stronger public-private integration will be key success factors."
Medical tourism . . . growing competitively
Malaysia is an emerging centre of medical tourism in APAC and in 2015, Malaysia's medical tourism industry was estimated to have earned revenues of USD350 million. While the country holds less than 3% of APAC medical tourism revenues, growth rates are above market at 15% year-on-year. Thailand is still the benchmark with 50% market share, followed by India at 30%. All other countries make up the additional 20% in this highly competitive industry.
Efforts made to growth this sector are expected to highlight Malaysia's advantages to medical tourist as a location for high quality, cost effective healthcare. Additionally, with the current international wave of interest for wellness and traditional therapies Malaysia is well placed to attract health travellers for a combination of wellness and health vacations.
Demand and growth potential for aged care services as Malaysia gains attractiveness as a retirement location
As elderly population dynamics change, there is a shift in the way the future elderly will live. While Asia traditionally tends to be a care at home aged care dynamic, retirement villages and elderly care centres are increasing in Thailand and Malaysia specifically. In Malaysia, Penang and Johor Bahru are expected to see more development, with partnerships between Malaysian and foreign companies with experience in aged care services (such as those from Australia and Japan) enabling developments with a range of services positioning Malaysia as a favourable location for aged care services.
Frost & Sullivan's 2016 Predictions for the Healthcare Industry in South East Asia:
- Investments in aged care services grow specifically in Malaysia and Singapore.
- ASEAN Economic Community (AEC) will promote free flow of capital, goods & services and skilled labour, but impact will be limited due to scarcity of healthcare resources in the region.
- Ineffectiveness of current programmes to curb dengue will mean its continued spread in countries like Malaysia and Singapore.
- Increasing adoption of Internet of Healthcare things (IoHT) with machine-to-machine and telcos promoting IoT technologies in healthcare including Telkomsel, Kontron and Borderless Healthcare Group.
- Indonesia continues to attract healthcare investment and infrastructure development due to expected impact of the 2019 universal health coverage pushed through the BPJS Health agency and regulations permitting increased foreign investment in the healthcare sector.
- Thailand maintains its pole position in the medical tourism sector.
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SOURCE Frost & Sullivan