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Display to 31 August 2018
SILVER POPULATION DILEMMA THE COUNTRY’S YOUNG ELDERLY CARE INDUSTRY IS UNDER PRESSURE AS SILVER POPULATION BOOMS
IT’S RAINING MEDS IN HONG KONG DOCTOR ROBOTS: ARE MACHINES TAKING OVER? SHOULD INDONESIA ACCEPT DEFEAT IN FIGHT FOR UHC? BYE ‘MOM AND POP’ HOSPITALS
FROM THE EDITOR This issue of Healthcare Asia magazine delved into how Asian governments are rushing to revamp regulations to boost their healthcare sectors whilst keeping investments flowing in. According to channel checks with experts, some governments are attempting to lure more multinational companies in to push the growth of digital healthcare. However, the pressure to reduce costs, increase efficiency, and demonstrate value will continue to intensify. Will the countries be able to keep up? We also tackled Malaysia’s current challenge in caring for the elderly as we found out that by 2035, the country is expected to have reached the status of an ageing nation with 15% of the population above the age of 60. This is projected to reach 20.4% by 2050. What keeps analysts up at night is the fact that Malaysia’s elderly care industry is still a budding one, and may not be ready as the silver population booms. We have also included event coverages of the the Healthcare Asia Forum held in Manila and Jakarta. Read on and catch up on what has transpired.
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29 Exhibiting Countries 2018
Healthcare Asia Forum
Malaysia’s fledgeling elderly care pressured to cater to booming silver pool
Here’s how Malaysia’s National Heart
12 Institute saved up US$6.4m in opex
22 HEALTHCARE INSIGHT
How should firms prepare amidst the evolution of smart healthcare?
04 Thailand hospitals are stuck
10 Governments rush to revamp
26 Taiwan eyes pushing
in a stalemate
regulations as costs rise
05 India scrambles to spur spending 06 It’s raining meds for Hong Kong’s
for value-based healthcare
EVENT COVERAGE 16 How the National Health
30 The future of healthcare
08 Doctor robots: Are machines
Insurance is altering Indonesia’s
32 ASEAN healthcare spending
taking over Asian hospitals?
18 Closure looms for 300 ‘mom
for Singapore’s ageing population to reach US$740 billion by 2025
and pop’ hospitals in the Philippines
28 Extensive R&D boosts Taiwan’s bid
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FIRST for the patients. I’m not qualified to comment on behalf of the sector, but talking about the equipment that hospitals buy, I think investing on these kinds of technology still puts the hospital in a good position despite shelling out cash,” said Dr Techapaitoon.
How to improve ASEAN’s healthcare system
Balancing business costs and patient needs
Thailand hospitals are stuck in a stalemate THAILAND
hen the Thai parliament passed a policy requiring private hospitals to take in emergency cases before passing them to public facilities, it did not come with the necessary investments from the government side. Public hospital players in the country still do not have enough training and the private and public sectors lack partnerships to strengthen collaborative abilities in terms of taking care of patients. Dr Surangkana Techapaitoon, hospital director at Samitivej Children Hospital, said that patients have high innovation expectations from their hospitals at little to no cost. However, both public and private facilities are hard-pressed without patients willing to shell out additional baht. Despite what seems to be a stalemate between the patients and the hospitals, administrators remain committed to providing the best healthcare at the most affordable price possible. “We spend a lot of money in buying the latest technology to provide what we can
Investing on these kinds of technology still puts the hospital in a good position despite shelling out cash.
Compensating the doctors Gavin Wadell, international head marketing executive of the business development department of Phyathai International Hospital said the healthcare industry in Thailand also ensures that its doctors are compensated well, if not better than their ASEAN counterparts, to encourage them to stay in the country. Dr Techapaitoon said that at the moment, private practitioners are paid way more than their colleagues in the public hospitals. General practitioners receive US$889 per month if they are in government hospitals, but once they move to private hospitals they can get as much as US$2,965. She added that the industry must address issues on how to balance the cost, the patients’ needs, and business strategies. Meanwhile, Joni Java, international marketing executive at Vejthani Hospital, said that as a private hospital, they can only decrease their prices up to a certain point. To address such dilemmas, Dr Techapaitoon said private-public partnerships must be strengthened to improve healthcare and keep costs at a reasonable level. In the meantime, the recent policy passed by the parliament can help bridge some gaps. Wadell said that so far, the government has been very helpful in assisting private hospitals to accept social security patients.
xxx capita total expenditure on health Per
Source: World Health Organization
Public still remains cash-strapped with healthcare costs
India scrambles to spur spending
f India is to eliminate diseases such as leprosy, measles, and tuberculosis by 2025, the country will have to start increasing its health budget sooner rather than later. The current spending on healthcare is below the average of 6.5% of GDP expected for the Asia and Australasia region. “The healthcare sector in India has struggled for long with multiple health indicators, including high maternal mortality rate (MMR), high infant mortality rate (IMR), and
low life expectancy rates,” says Nitin Atroley, partner and head of sales and markets at KPMG India. “However, the situation has drastically changed over the years and the healthcare sector is rapidly contributing to both employment as well as revenue.” Poor public spending Charu Sehgal, LSHC industry leader of Deloitte India, attributes this growth mainly to private players. “Public spending has remained quite low and resulted in inadequate
Public spending has remained quite low and resulted in inadequate infrastructure and manpower.
infrastructure and manpower in public health facilities, especially in rural areas,” she adds. In response to this, allocation for health will rise by more than 20% to Rs48b (US$7b) from the previous year’s estimate of Rs38b (US$568m). Additionally, Finance Minister Arun Jaitley announced an increase of Rs31b (US$464m) towards expenditure on the National Rural Health Mission, a scheme that aims to provide accessible, affordable, and quality healthcare to the rural population. Optimism also remains as growing demand, supportive policies, innovation, and increasing investments direct the growth of the sector. The India Brand Equity Foundation reports that these factors, which include rising income, ageing population, growing health awareness, precautionary treatments, and medical tourism, are set to ensure the growth of the sector from here.
India’s public health expenditure, 2012-13 to 2017-18
Source: Union Budgets 2012-2013, 2013-14, 2014-15, 2015-16, 2017-18
The Chartist: SINGAPORE’S DOCTOR HEADCOUNT lagged OTHER DEVELOPED NATIONS These charts from CIMB Research show the number of doctors in Singapore rose at a CAGR of 6.5%, improving the overall doctor per 1,000 population ratio from 1.5 to 2.2. This is supported by an expanding annual medical student intake into local universities from 354 in 2012 to 471 in 2016, as well as returning Singaporean doctors who are trained overseas. CIMB said the figure is in the lower range for developed nations. As of the of the end of 2016, the medical talent pool is made up of 84% local doctors, and the Ministry of Health projects it to further grow to 500 in 2018. A physician shortage in Singapore signals a significant effect on the quality of care. Without sufficient doctors, this equals longer waiting times for patients.
Number of specialists and non specialists in Singapore 2008-2016
Physician growth in Singapore
FIRST KEEPING UP WITH DIGITALISATION MALAYSIA
It’s raining meds for Hong Kong’s drug consumers HONG KONG
Healthcare Asia interviewed Datuk Dr Kuljit Singh, medical director of Prince Court Medical Centre, as he discusses digitalisation amongst Malaysian hospitals and how Prince Court Medical Centre is catching up. What are Malaysian hospitals doing to catch up with the fast pace of information technology? All new government hospitals built today are equipped with total hospital information system. For private ones, it depends on the budget of the hospital but by and large most new private hospitals are fully built with IT systems. The older hospitals are trying to change into IT systems but in phases. The main issue is always cost but the other problems would be migrating old data into the IT system system. There would be huge written volumes of info that need to be transferred. Then the isssue of getting the doctors and nurses to learn the new IT system also compounds the problem. What dangers are there for Malaysian hospitals that can’t keep up with digitalisation? The number of patients have increased and without digitalisation, the entire delivery of healthcare is going to be very slow. Speed in healthcare is now becoming important from getting appointments, tracing results, prescription of medication, and viewing of images. What opportunities are there for healthcare firms in assisting the country to achieve UHC? Not every hospital have modules that will help them achieve universal healthcare coverage. Some will usually adopt modules from other parts of the world, which could be quite costly. Not every hospital will be able to afford this much expenditure for digitalisation. So for opportunities, some firms can come up with easier, simpler and cheaper modules that Malaysian hospitals can adapt. 6
ey Big Spender could be the theme song for Hong Kong’s drug makers as they revel in higher pharmaceutical spending by consumers in the region. According to Ang Wei Zheng, pharmaceuticals & healthcare analyst, BMI Research, public spending on drugs in March 2016 rose 7% year-on-year to HK$5.7b (US$736m), up from HK$5.3b (US$686m). Notably, drug spending from the special administrative region’s Samaritan Fund, established to finance the health expenditure of low-income people, rose by a significant 12% yoy to amount to HK$269m (US$34m). Funding pharmaceuticals In aggregate, public funding of pharmaceuticals in Hong Kong rose by 7% yoy to HK$5.9b (US$770m). “We project top-line medicine spending in the special administrative region to grow from HK$9.6b (US$1.2b) in 2016, to HK$13.4b (US$1.7b) by 2021 and HK$18b (US$2.3b) by 2026,” Ang says. “Despite its small pharmaceutical market, we continue to view Hong Kong as attractive to innovative drugmakers, given its well-developed regulatory regime and higher per capita
$500m fund to help stir Chinese drug development
We project top-line medicine spending in the special administrative region to grow from HK$9.6b (US$1.2b) in 2016, to HK$13.4b (US$1.7b) by 2021.
medicine spending at US$169 - as compared to other Asian countries such as China or the Philippines in 2016.” Hong Kong authorities are expected to adopt an increasingly austere position. This is reinforced by the fact that pharmaceutical spending is the second largest area of spending for the administration, accounting for 10% of the total in FY2015/16. As a consequence, high-value pharmaceuticals will face significant difficulties getting listed on Hong Kong’s drug formulary. Additionally, the government has increased its recurrent expenditure on healthcare by an average of 7% over the past decade. The expenditure on public healthcare services will increase by 13.3% to $71.2 billion in 2018-19, accounting for 17.5% of total recurrent expenditure. It also proposed establishing a $500m fund to promote the development of Chinese medicine by supporting areas such as applied research amongst other areas.
2018 Medicare Taiwan to tap growing medical tourism TAIWAN
The 2018 Medicare Taiwan (Taiwan International Medical & Healthcare Exhibition) and SenCARE (Taiwan International Senior Lifestyle and Health Care Show) has created an international platform for traders in medical industry in Taiwan. Taking place from June 21 to 24, at Taiwan World Trade Center, Hall 1 (TWC), these two Delegates at the 2018 Medicare Taiwan press visit trade shows will gather 400 key exhibitors in the medical industry to demonstrate their latest products in the categories of electro-medical equipment, diagnostic equipment, medical disposables, rehabilitation equipment, and mobility aids. Additionally, with Taiwan’s mature ICT and high-tech industries, many key industrial players have the necessary skillsets to take part in medical and healthcare markets, which also encourage the development of medical services, as well as increasing medical tourism in Taiwan.
Co-published corporate profile
AIA Diabetes Care: Ensuring a sweeter future for diabetics in Singapore Insurance giant AIA fills in the gap with Singapore’s first diabetes insurance plan. everyone deserves the coverage they need, especially after being diagnosed with a chronic illness,” says Ms Ho Lee Yen, Chief Marketing Officer of AIA Singapore.
Empowering diabetics to live life to the fullest
hese days, it is already quite easy to gain peace of mind and get insured against nearly all types of diseases, thanks to a number of comprehensive insurance packages being offered to the public. But the situation may be less assuring for those afflicted with diabetes. A serious condition Diabetes is considered one of Singapore’s most serious illnesses. According to data from the Ministry of Health, in 2014, 440,000 Singaporeans aged 18 and above had diabetes. This number is projected to balloon to 1 million by 2050.1 Dr Abel Soh, an endocrinologist at Mt Elizabeth Medical Centre, notes that the number of people with diabetes mellitus in Singapore is growing at an alarming rate, with more diagnosed at a younger age. In fact, Singapore General Hospital data reveal that more people are getting diabetes before 40. “To make matters worse, many individuals do not even know that they have diabetes until complications arise,” adds Dr Soh. Diabetics are also at a higher risk of developing other conditions such as cardiovascular issues, blindness, stroke, and even kidney failure. But despite these worrying statistics, only a small number of Singaporean diabetics find themselves properly insured. In order to meet this demand for insurance for diabetics, insurance giant AIA Singapore recently rolled out AIA Diabetes Care, Singapore’s first insurance plan designed for Type 2 diabetics and pre-diabetics. “Dealing with diabetes is a lifelong challenge, and we want to help Singaporeans and their families as they fight their personal battles. We believe
Generous benefits The plan provides “access to diabetes complications insurance for those who need it the most, but find it impossible to obtain – by ensuring hassle-free underwriting, immediate underwriting decision, and no extra premiums”, says Ms Ho. She also adds, “With AIA Diabetes Care, we hope to equip individuals with the tools to successfully manage their condition, and also give them the added peace of mind from knowing that they are adequately covered. Ultimately, our aim is to empower Singaporeans and their families to live longer, healthier, better lives.” AIA Diabetes Care provides key benefits for its policyholders, firstly by guaranteeing easier access to protection and coverage for five key diabetes-related complications – blindness, kidney failure, stroke, heart attack, and coronary artery by-pass surgery – with guaranteed level premiums that remain unchanged throughout the whole policy. Policyholders may also opt for an add-on protection with Cancer Cover, providing additional protection for early or intermediate stage cancer and major cancer. As a type 2 diabetes, you can still continue to live a fulfilling life by leading an healthy lifestyle through eating healthily, exercising more and losing weight, going for regular screenings, stop smoking and reducing alcohol in-take2 - A 1% drop in HbA1C levels lowers the risk of diabetesrelated complications significantly – such as amputations by 43% and microvascular complications by 37%. To motivate positive behavourial change, AIA Diabetes Care features several AIA Vitality enhancements that rewards you for each healthy choice you make, however small. AIA Vitality members are able to enjoy up to 15% discount on future premiums, discounted health screening
packages, and access to a healthy eating programme based on their Vitality Nutrition Assessment3 - A value unseen in any other insurance package. “We want to score against diabetes through protection, improvement, and prevention,” says Ms Ho. A powerful plan “As it is a chronic condition, I know of individuals with diabetes who struggle emotionally and financially, having to deal with the consequences of the disease,” says Dr Soh. According to Ms Ho, the rollout of AIA Diabetes Care is rooted in AIA Singapore’s strong belief in the success of private-public partnerships, especially in the area of healthcare. “We strongly believe that there is a significant role the private sector can and should play in this national movement to support the numerous government-driven initiatives such as the recently announced enhancements to screening subsidies to curb diabetes in Singapore,” she says. Ms Ng Ying Ying, a teacher with diabetes, recalls, ”As a type II diabetic, any diabetesrelated condition would be excluded from new insurance policies as a pre-existing condition. This meant that if I wanted to purchase additional coverage, my premiums would be very high or my existing condition may even be excluded. There were also no available insurance plans offering sufficient coverage for type II diabetes to begin with.” She is delighted that AIA Singapore is championing this cause with AIA Diabetes Care to give people easier access to protection and financial security. https://www.nrdo.gov.sg/docs/ librariesprovider3/default-document-library/ diabetes-info-paper-v6.pdf?sfvrsn=0 2 http://www.straitstimes.com/singapore/ health/how-to-reduce-risk-of-diabetes 3 Source: BMJ 2000;321:405, Association of glycaemia with macrovascular and microvascular complications of type 2 diabetes (UKPDS 35): prospective observational study, http://www.bmj.com/ content/321/7258/405 1
“With AIA Diabetes Care, we hope to equip individuals with the tools to successfully manage their condition, and also give them the added peace of mind.” HEALTHCARE ASIA
Doctor robots: Are machines taking over Asian hospitals? CHINA
hen Chinese web provider Baidu rolled out its AI-powered medical assistant Melody, not only did users receive instant and real-time access to medical expertise, doctors also found what a day is like without the long check-up queues they are used to. As tech firms increasingly expose users to the myriad benefits of digitalisation, more countries in Asia are expected to embrace artificial intelligence (AI) and integrate it within their own industrial ecosystems. In fact, Asia is considered to be one of the most promising markets for AI, with an estimated US$1.8t to US$3t added value by 2030 in terms of total AI investment and revenue across all industries. John Kelly III, senior vice president, cognitive solutions and research, IBM, said that the region is extraordinarily well-prepared to lead in the Cognitive Era, due to its massive wealth of talent in the fields of data engineering and science. However, the region is also currently underserved, with significantly low physician density in key countries such as China (1.5) and India (0.7). These numbers are way below statistics in developed markets such as the US (2.5) and the
European Union (3.5). Sundeep Gantori, analyst, UBS, added that with these factors in mind, the key applications where AI holds promise in the region include decisionmaking support during clinical trials, robots to assist in surgery and patient monitoring, and managing healthcare data. Machine learning is leading For the past few years, Asia has already been seeing quite a number of AI-related innovations in the healthcare industry. Analysts at McKinsey Global Institute revealed that machine learning is already being applied in payments and claims management, but a wider application of AI may be seen across all aspects of healthcare soon. Medical providers will soon be faced with more choices for more effective digital solutions, from treatment options tailored to suit each patient to real-time health monitoring of their patients’ vitals. Through partnerships with medical providers like Memorial Sloan Kettering Cancer Center, IBM has taught its cognitive system, Watson, how to analyse cancer and enable clinicians to provide personalised medical care to their patients. Watson, which
GLP announced its delisting this January
is now being deployed all over Asia, is helping doctors identify personalised treatments and keep pace with the massive volume of new cancer research every year. Artificial is the way to go Arnab Basu, partner and leader, technology consulting, PWC India, said AI is also being used to monitor patient vitals as a way to create a baseline for health and well-being. Mobile platform xbird uses AI to help diabetics understand how hypoglycemic attacks work and when they will occur. Xbird uses over 20 sensors from mobile devices to add up personal and environmental data points and create an automated personal diary, which may be cross-referenced against blood sugar levels.
HEALTHCARE OFFICE WATCHWATCH
The doctor is in: App lets xxxx you book with just a click
FindDoc,player Hongjoins Kong’s multilingual, Another the first fray of coworking spaces centralised online healthcare information at the heart of garden city with the opening of and appointment platform, has been space WeWork, the world’s largest coworking creatingLocated a comprehensive system provider. at beach centre, the space since 2012. It aims to contribute toand the boasts of a perfect blend of art, utility, development supportive medical productivity – allofinaclose proximity to Singapore’s ecosystem. The booking youthful downtown district.app has the function of real-time appointment The space features 690 desks and open-air booking,places providing users convenient meeting with ample natural light,and splashed flexible access to walls professional medical with pastel-colored and furniture. A stay information and services. at WeWork Beach Centre will be reminiscent from a databaseshophouses, of 6,000 medical of Aside traditional Singaporean with practitioners, has over 400 videos old storefronts, FindDoc arched window frames, multimade inshutters, collaboration with over a hundred colored and concrete breeze blocks healthcare professionals onthe itscenterpiece video placed around the office. But platform Atyellow the same it of the glassFindDocTV. building is its maintime staircase, is a partner of theBeach Hong Centre’s Kong Sanatorium spanning WeWork three floors. In & Hospital offers free faecalItsoccult here, classic and meets modern design. WeWork’s blood testsinto to users agedAsia, 45-65. FindDoc first venture Southeast where is also working closely Silence, a nonresidents are expected towith increase WeWork’s profit organisation that found servesamongst the hearing 200,000-strong members 212 impaired.inFindDoc has 4.3m per year. locations 20 countries aroundvisits the world. 8
Is it time for Indonesia to embrace defeat in achieving UHC?
ime is ticking for Indonesia’s national health insurance scheme, Jaminan Kesehatan Nasional (JKN), as latest estimates show that only three in four of citizens have been enrolled since the launch of the programme in January 2014. Government authorities have been aiming to enroll the entire Indonesian population by January 2019 as part of their overall goal to ensure access to high quality healthcare services across the archipelago. However, with only two months left, their initial aim might be pushed further down the calendar. Analysts at BMI research said that the country remains lacking in terms of general infrastructure and government financing to support healthcare in the rural areas. As a percentage of the country’s gross domestic product, healthcare spending stood at a measly 2.9% in 2016. This will continue to weigh on the financial sustainability of Indonesia’s universal healthcare programme, as well as its full implementation. In the short term, Indonesia’s healthcare coverage
Government healthcare budget
will remain unequal and inaccessible to many. The country’s highly fragmented healthcare industry and underdeveloped medical system also pose huge challenges to true universal healthcare for all. BMI Research analysts added that these will result in stagnant medicine sales growth for the country’s drugmakers. Still not in tip top shape At present, Indonesia experiences very diverse levels of access across the country. In 2016, the Special Region of Yogyakarta has 13 hospital beds per 10,000 people, whilst the Central Sulawesi Region had only eight. Analysts believe that the short term will remain challenging despite the expansion of private healthcare providers such as Siloam International Hospitals. Private healthcare providers in Indonesia will continue to expand their presence in the market, with opportunities presented by the country’s long-term economic growth potential and
low levels of public healthcare infrastructure, according to BMI Research. The long-term rise of household incomes will provide a boon for private hospitals which generate a substantial amount of their revenues from out-of-pocket payments. Furthermore, the introduction of a Coordination of Benefits (COB) scheme, which according to the Ministry of Health regulation no. 71 2014 (Clause 21) allows patients to increase their entitled benefits by obtaining additional health insurance coverage from Indonesia’s universal healthcare scheme, will also provide opportunities for private healthcare providers.
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Healthcare insight: REGULATORY REVAMP
Markets are increasing in competitiveness and attractiveness
Governments rush to revamp regulations as costs rise Asian countries are rolling out multi-pronged strategies to boost their healthcare sectors and keep attracting investments.
t is no secret that China is a regulatory nightmare for many healthcare companies as it takes at least two years for most drugs and medical devices to obtain the necessary licences to be sold nationwide. Pharmaceutical companies also face significant price pressures to slash bidding prices, sometimes by as much as 30%. As if these were not bad enough, the healthcare system is highly centralised and large hospitals are overutilised. But as its population ages and healthcare spending soars, Chinese regulators have finally recognised the need to overhaul the system. “The goal of the recently launched healthcare reforms is to enhance the quality, coverage, and sustainability of the Chinese healthcare system,” notes Michael Custer, an analyst with Solidiance. He explains that the reforms will likely 10
Markets across Asia are continually acting to increase the competitiveness and attractiveness of the life sciences industry for foreign multinationals.
result in “daunting” cost challenges for both local and multinational healthcare firms. Despite this, China remains an attractive market because the demand is big enough for multinationals to find and carve out profitable businesses with the right strategy and understanding of the market. China is not alone in rolling out long-overdue healthcare reforms. Across Asia, countries are scrambling to overhaul their healthcare systems, most of which are ill-equipped to deal with the challenge of rapidly changing demographics. A key goal of healthcare reform is attracting more multinational companies to set up shop in developing Asian economies. “Markets across Asia are continually acting to increase the competitiveness and attractiveness of the life sciences industry for foreign multinationals,” says Andrew Chen,
Asia-Pacific life sciences transactions co-leader, EY Shanghai. Chen notes that Asian countries have rolled out a multi-pronged approach to boost their respective healthcare sectors. For instance, India has undertaken several initiatives, including encouraging public-private partnerships (PPPs) in R&D projects and increasing focus on infrastructure to establish the country as one of the world’s major pharmaceutical innovation hubs. Zeroing in on innovation Meanwhile, Australia and China have implemented sectorfocused innovation plans to boost investments, along with reforms to expedite drug approvals. Other Asian countries are dealing with problems of counterfeiting and patients’ inadequate trust of the industry. For example, Indonesia and the Philippines are adopting stringent measures to contain the spread of counterfeit medicines, whilst Australia and South Korea are increasing transparency between pharma-physician-patient relationship through mandatory physician payment disclosures and
Healthcare insight: REGULATORY REVAMP hefty penalties. Similarly, India is strengthening its pharmacovigilance programme by making the pharma companies take on more accountability for drug safety. Apart from dealing with structural issues, Asian countries are also steadily moving towards digitalisation. “The life sciences industry in the region is also inching toward digitalisation, with both industry and government playing an important role,” Chen says. A fine example is South Korea, which is working towards becoming a global biotech and medical industry hub with focus on biosimilars, stem cell therapies, and 3D printing of medical devices. Meanwhile, Taiwan has dedicated an initiative to enhance its position as a major biomedical market in Asia, and Vietnam has lifted the cap on foreign investments in the pharma sector. China’s government is developing a national digital platform that will enable data sharing and is introducing digital medical identification and signatures. At the same time, pharma companies in India and the Philippines are developing mobile applications to enhance patient experience and to educate different stakeholders. Get the MNCs Asian economies are correct in attempting to attract more multinationals. Chee Hew, senior principal for Asia Pacific at Clearstate, a business of The Economist Intelligence Unit (EIU), argues that multinationals have a critical role in driving innovation and the application of technology to healthcare challenges on a large scale. “In an environment in which both startup firms and technology giants have a strong presence, healthcare multinationals are well positioned to drive innovation and the application of technology to major healthcare challenges,” Hew notes. “The value offered by digital healthcare lies in the way in which companies can apply recent breakthroughs in science and technology to different healthcare challenges to bring value to users,” EIU says. Healthcare ecosystems are
changing, with more intelligent health enterprises emerging to drive smart healthcare in ways that improve patient outcomes and bring down the cost of healthcare delivery. Empowered by technology, patients and consumers are becoming more active in healthcare. These factors will drive the emergence of a healthcare industry that will be vastly different from that in the past. “Pharmaceutical and medtech multinationals have the domain knowledge and influence that can enable them to lead innovation and application of technology at scale that will catalyse the transformation of entire healthcare ecosystems, thereby speeding up the adoption of digital health around the world,” Hew notes. Companies have tended to create digital health centres in cities with high concentrations of technological innovation activity, such as San Francisco and Boston in the US. In Asian markets, by contrast, digital health efforts are focused on achieving basic standards of care, such as supporting affordability and access to care for people living in rural areas and places with a shortage of doctors who can deliver more complex care. “For digital health to take off, there must be a fundamental shift in how stakeholders collaborate,” Hew says. “Multinationals can seed change in a number of different markets more effectively and quickly by setting up centres for digital health in strategic locations with high digital density, leading to the formation of digital hubs.” All these reforms are focussed on a single goal: lowering healthcare costs across the board. “Change is the new normal for the global healthcare sector. However, the pressure to reduce costs, increase efficiency, and demonstrate value will continue to intensify. This shift is being fuelled by aging and growing populations, the proliferation of chronic diseases, heightened focus on care quality and value, evolving financial and quality regulations, informed and empowered consumers, and innovative treatments and technologies — all of which are leading to rising costs and an increase in spending levels for care provision,
infrastructure improvements, and technology innovations,” says Mohit Grover, Life Sciences & Health Care industry leader at Deloitte, in a co-authored report. He expects healthcare spending growth to rise to over 6% a year in 2017 and 2018. Growth in several markets, particularly in Asia and the Middle East, will be particularly rapid, driven by the development of both public and private healthcare systems. What’s the growth driver now? In addition, the trend towards universal health care is likely to be a growth driver in numerous markets. The role of cost is “so pivotal” that it is at the core of the many issues — demographic, financial, operational, innovation, and regulatory — impacting sector stakeholders in the coming years. “The way forward is clear: sector stakeholders must look for ways to decrease costs, given the consensus that the current upward trajectory is unsustainable. In addition to demographic, financial, operational, innovation, and regulatory considerations, three macro issues are framing the cost discussion: sector defragmentation, the shifts from episodic care to population health management and from volume to value-based care, and efforts to deliver effective, efficient, and equitable care,” Grover says. However, whilst most people fear that increasing healthcare costs will result in negative situations, this apprehension will not necessarily come to pass. Whilst there may be rising costs, these can also signal positive developments.
Utilisation and number of public and private hospitals in China
Sources National Bureau of Statistics, Solidiance
There is greater competition in Malaysia now as more centres are coming up with private hospitals offering similar services. Cost is a problem due to the depreciation of ringgit as well as GST.
Datoâ€™ Seri Dr Mohd Azhari Yakub Predee Daochai CEO President National Heart Kasikornbank Institute of Malaysia 12 HEALTHCARE ASIA
Here’s how Malaysia’s National Heart Institute saved up US$6.4m in opex CEO Dato’ Seri Dr Mohd Azhari Yakub said that cost is still a lingering headwind for the hospital, but costoptimisation measures salvaged the business and even helped boost operations for its cardiac care wing.
ealthcare Asia recently caught up with Dato’ Seri Dr Mohd Azhari Yakub, CEO of Institut Jantung Negara (National Heart Institute) of Malaysia as he shares the hospital’s biggest achievements over its 25 years of existence. He also shared cost-optimisation measures the institute has carried out and what the establishment has achieved under his wing. What new initiatives are in place at Institut Jantung Negara and how have these helped the hospital so far? We have been striving to be the centre of excellence for cardiovascular care in the region and globally, and I think we are now right on the dot to achieving that. The multinational clinical trials are usually initiated by a group of internationally renowned cardiologists. They then look at different centres. As many of our doctors and consultants are key opinion leaders in matters of cardiology, some of us are in that circle of peers. Thus, they may have at one point visited IJN, knows of our system and how reputably high the standards of cardiac care are kept, prompting them to collaborate with us. Our intention is to be the global centre of excellence in cardiovascular and thoracic care whilst our pecuniary objective is to merely be financially self sustainable and not profit making. What are the best changes you’ve see in IJN over its 25 years of establishment? We are very proud of what we have achieved over the past 25 years. I think that the founders of this hospital are pleasantly surprised with the milestones that we have achieved, some of which goes above and beyond their expectation when they first conceptualised IJN back in 1992. We have allocated about RM2 to 3 million for some attractive treatment packages that we will subsidise to the public as our way of saying thank you for their confidence in us and their continuous support. We are also actively seeking foreign patients to boost the medical tourism for the nation. As one of the elite members of the Malaysian Healthcare Tourism Council (MHTC), we are indeed in the best position to make it happen. In terms of cardiac surgery, probably I have set a high standard of heart surgeries that the next generations of surgeons could outdo mine. In terms of management, it is to set the business plan and systems in place for future sustainability and for IJN to always be at the cutting edge of cardiac care in the country and the Asia Pacific region. I wish for IJN to scale greater heights and be an internationally acclaimed centre. IJN’s medical tourism has seen double digit growth in revenue. IJN provides for the heart care needs of both developing and fast-developing
countries. It also addresses the problem brought about by mismatch between high demand for cardiovascular care services and available home expertise. Another selling point in IJN is our highly competitive cost. IJN maximises the opportunity in medical tourism to be financially self-sustaining through constant anticipation of growth in the number of foreign patients. In this light, IJN takes pride in having more than adequate capacity to accommodate both international and local patients. It is actively and closely working with the MHTC, and also works with other partner hospitals all over the world. As an internationally accredited heart centre, IJN has consistently passed the tough Joint Commission International (JCI) vetting since 2009. Not many hospitals are JCI-accredited. Actually, fewer hospitals are being accredited like us, three times in a row. What are the biggest plans in the pipeline for IJN? We will have our presence outside the current headquarter in Jalan Tun Razak. The memorandum of understanding between IJN and Permodalan Nasional Bhd (PNB) for the construction of a cardiac hospital in Taman Perling was signed in mid-August. The hospital will enable IJN to tap larger customer base in the region as it was positioned to attract Singaporeans and Indonesians entering Malaysia via land link. The 150-bed hospital will be offering medical services to between 20 and 30 patients for cardiology and other heart-related treatments. IJN has also developed sub-specialties in other niche areas like pediatric cardiology, electrophysiology, and mitral-valve repair centre. The institute also eyes expanding its in-house facilities, particularly in related expertise like renal, genetic, hypertension, and endocrine. We will expand in these fields. Our core services will still be around cardiac but we will strengthen it with an integrated capabilities with peripheral areas. There is greater competition in Malaysia now as more centres are coming up with private hospitals offering similar services. Cost is a problem due to the depreciation of ringgit as well as GST. To make sure IJN weathers these challenges, it carried out cost-optimisation measures which resulted to savings of between RM20-25m (US$6.4m) in terms of operational expenditure last year. We have to be firmly at the frontier of cardiac care. It is best to position ourselves with new technology and new expertise. Since we invest in people, we can ride on these challenges by continually delivering the best and latest affordable cure. Financially we are strong. However, we want to get more private patients so that we become less dependent on government patients whilst at the same time we can continue to cross-subsidise. HEALTHCARE ASIA
Country report: MALAYSIA
Medical tourism is a US$55 billion industry that has opened up doors
Malaysia’s fledgeling elderly care pressured to cater to booming silver pool Nursing homes are run mostly by charitable groups providing final stages of care to the elderlies.
lobal healthcare expenditure has consistently risen but incomes have not kept pace, and Malaysia is certainly having difficulties keeping up. Natasha Gulati, industry manager at Frost & Sullivan, said that private healthcare expenditure has grown at par with total expenditure. Fabian Boegershausen, country manager at Solidiance, enumerated some of the high level observations on healthcare in Malaysia. In the regional context, Malaysia is above the emerging markets in per capita spending for healthcare but still far below a benchmark country like Singapore. An ageing population and ongoing urbanisation impacts the overall need for healthcare, the mix of healthcare requirements, and the population’s ability to finance its healthcare needs. The economy has performed sluggishly in the past years, hampered by low oil prices and
lower FDI investments, better than the Middle East but behind emerging markets. Ballooning spending Overall healthcare spending has consistently outgrown key indicators in Malaysia by almost twice the growth factor, following the global and regional trend. Public healthcare budgets remained stable and recently picked up again but are expected to grow only slowly in the midterm future as government income is constrained. Private spending is expected to keep outgrowing public spending, making up for the lack in public coverage — which is technically universal but full of gaps and bottlenecks. The supply of private healthcare facilities is ill-balanced. Since 2014, private facilities have tended to reduce capacity and may pick up only slowly. The coverage by private insurance is
Public hospitals hold 75% share of the total number of hospital beds in the country, but trends show that private hospitals are gaining more share.
still very low, people focus more on general savings and life insurances. Malaysia has a healthcare spending per capita at US$455, which is one of the highest in ASEAN where the government plays an active role. Vietnam is also showing a promising start with 7% of GDP spent on healthcare. Indonesia ranks low for healthcare per capita amongst is picking up with the growth of the middle class and increased government spending. Healthcare expenditure is similar to that of Malaysia but with a much larger population, the healthcare spending per capita is half of Malaysia’s healthcare spending per capita. Almost 70% of the approximately 50,000 healthcare staff in Malaysia are serving in public hospitals but the Ministry of Health still recorded a shortage in healthcare staff at public hospitals. Public hospitals hold 75% share
Country report: MALAYSIa of the total number of hospital beds in the country, but trends show that private hospitals are gaining more share in the past decade. Malaysia has one doctor for every 633 people and one nurse per 333 people. In the past decade, the number of doctors in the public and private sectors increased by around 50% and 20%, respectively. Do we have enough staff? In terms of the number of nurses, there was an increase of about 40% in public sector nurses, and more than 50% increase in private sector nurses during the past decade. The middle class households in Malaysia have the highest average income in Southeast Asia, apart from Singapore. Suresh Ponnudurai, CEO of Malaysiahealthcare.com and World of Wellness, wondered what strategies are being rolled out by healthcare firms and hospitals to keep luring medical tourists in, and what trends are currently in play and what challenges are players likely to encounter due to these trends. Medical tourism is a US$55 billion industry that has opened up the doors to quality treatment for people everywhere. This industry has expanded by leaps and bounds whilst constantly evolving to surpass previously set standards. Senior living remains a relatively new concept to Malaysia, said Boegershausen. Presently, nursing home is the place that focusses on the final stages of care and majority are run by charitable organisations. The population who are 65 and above remain below 10% of the total population of Malaysia. A recent study shows that approximately 70,000 active 54-year old EPF contributors have an average savings of just below RM167,000 (US$38,973) in 2013. As the average Malaysian is expected to live until 75, this means that for one to retire at 55 the average monthly expenses can only be at around RM700 (US$163.36). A growing senior population will most certainly drive up demand for healthcare, in particular long-term care as well as non-communicable diseases. The top 3 mortality cause has been consistently causing two-thirds of the deaths in private hospitals.
Diseases of the circulatory system have been consistently high at 28% for the past three years as the cause of death in private hospitals. Total healthcare expenditure is forecasted to grow at around 6% CAGR minimum, mainly driven by private healthcare — due to stable growth of GNI per capita and health insurance penetration. Private sector’s share Percentage share of private sector in healthcare expenditure is forecasted to increase from 48% in 2015 to 55% in 2020. To achieve 11MP, private hospital beds must grow at 5% CAGR to provide 24% of the target capacity, and private hospitals beds must grow at 2% CAGR to 65%. Remaining 10% will be catered by homes and medical centres. Ponnudurai added that the ageing population of Malaysia and in ASEAN is rising sharply as quality of life improves significantly. By 2035, Malaysia is expected to have reached the status of an ageing nation with 15% of the population above the age of 60. This is projected to reach 20.4% by 2050. This looming problem is a global issue for most nations including Malaysia coupled with significant shortages in aged care. The ageing population requires more in terms of healthcare services with nations that have homes to cater for aged care living. Healthcare providers and stakeholders must look to eliminate waste and explore alternative care delivery models like retail clinics, telehealth, and medical tourism for “everywhere care”. These firms are using mergers and acquisitions as well as alliances to consolidate into large health system for economies of scale and to reach more patients. Priorities must be delivering care through mHealth, telehealth, and EMR/PHR, as well as incorporating wearables and social media into their care plans to deliver value in a competitive environment. Additionally, they must address the cost curve and managing health populations with public and private sectors transitioning to financial incentives from the “breakfix” model, to prevention and predictive maintenance.
Datuk Dr Kuljit Singh
Ganesan Satimuti, head of biomedical engineering in Parkway Pantai, Malaysian Operation Division, said that adoption of technology in the healthcare sector of any country is critical in enhancing delivery of quality healthcare services. Malaysia practices a dual healthcare delivery system. Both the public and private sectors are central players in Malaysia’s healthcare delivery system. Datuk Dr Kuljit Singh, medical director, Prince Court Medical Centre in Kuala Lumpur, Malaysia, enumerated some of the challenges in converting into digital technology in Malaysian healthcare. He cited that the industry must tackle traditional thinking amongst hospital players, elevated costs, more training, partial digital conversion, the system’s 100% dependency, and confidentiality. Healthcare expenditure will continue to rise because of the ageing population, according to Dr Milton Lum, a former president of the Malaysian Medical Assocation, the double whammy of non-communicable and infectious diseases, new technologies and increasing patient demands. The need for long-term care and non-communicable disease management will increase for the senior population and an increasing number of young adults. This is inevitable as large segments of the population are unhealthy with diabetes, hypertension, overweight and obesity. Concomitantly, infectious diseases, especially dengue, will continue to plague the public. Despite vector control measures, dengue and malaria prevail with no cure for the former and increasing drug resistance in the latter. Some previously eradicated diseases like rabies are also making a comeback.
Malaysia medical tourism market revenue
Sources: TMR Analysis
healtcare asia forum: jakarta
Indonesia’s healthcare industry stands far below the global average of doctor to patient ratio
How the National Health Insurance is altering Indonesia’s healthcare sector Will the government sustain better access to healthcare amidst challenges?
opulation growth amongst Indonesia’s elderly is posing a new threat to the country’s universal healthcare programme JKN (National Health Insurance), one of the biggest universal healthcare programmes in the world with its 195-million strong membership. Indonesians aged 60 and above are expected to grow in number by up to 19% from 21m in 2015 to 25m in 2019, pushing demand levels to new heights and posing the question of whether Indonesia’s healthcare sector is ready to manage changes of this scope. Despite the forecast of significant market growth, the details paint a less optimistic picture. With only three doctors per 10,000 people, Indonesia’s healthcare industry stands far below the global average of 14 and way behind many of its Asian neighbours. In addition to this, the bed-to-population ratio is still 16
Huge deficits have also been plaguing the programme since its inception.
relatively low at 1.3 per 1,000 people. Dr. Triharnoto, head of business and development, Panti Rapih Hospital, said that Indonesia is coming into a new era alongside the exponential increase in patient numbers and the continued expansion of the private sector. Huge deficits have also been plaguing the programme since its inception, from a little over IDR3m in 2014 to IDR9m in 2017, a huge increase within a span of just three years. In the midst of these deficits, BPJS Kesehatan (Healthcare and Social Security Agency), the primary body in charge of the JKN, remains optimistic that the programme will achieve its purpose of providing access to as many Indonesians as possible. During the 2018 Healthcare Asia Forum held at the Ritz-Carlton Jakarta Mega Kuningan, Dr. Ismail Dilanir, Sp.BTKV, corporate chief
executive officer, Jakarta Heart Center, said that the optimism around JKN may be sustained if BPJS continues to rethink its model and ensure that the people’s needs are accommodated with great efficiency. Growth imbalance Gervasius Samosir, associate partner, Soliadiance, said that in the past five years, the share of healthcare spending of the total government expenditure may soon reach its limit. The growth of the country’s healthcare expenditure per capita from 2016 to 2017 has fast outpaced the country’s GDP growth per capita. According to him, this shows that the country may not be prepared to meet future healthcare demand and rising costs. “Growth rates of seniors in Indonesia are predicted to be much higher than OECD will surpass the growth rates of the working
healtcare asia forum: jakarta Most of the healthcare institutions are still in the adaptive phase, where healthcare is adapted with Petunjuk teknis Sistem Indonesian Case Base Groups Coming up with a logical benchmark
population (ages 15-64). This could aggravate healthcare challenges and put additional pressure on Indonesia as the elderly require more healthcare services over time,” he added. To streamline growing costs, the government needs to come up with a reasonable benchmark for the overall public healthcare budget and the operation of healthcare institutions. An unsustainable 45% of the overall health spending has gone to personal costs, something that may be prevented with the efficient allocation of healthcare expenditures. Efficiency is key Dr. Ridwan Tjahjadi Lembong, hospital director, OMNI Hospital noted that for the JKN, there is a gap between what the government pays and the cost itself. According to him, most of the healthcare institutions are still in the adaptive phase, where healthcare is adapted with Petunjuk teknis Sistem Indonesian Case Base Groups (INA-CBGs) and the new tariff and where the current scheme is continuously adjusted to improve efficiency. “BPJS will not pay you IDR5m, maybe IDR3m only or IDR2m depends on the diagnosis, how do you cover the gap? So, we’re going to boost the drugs, the pharmacy, the doctors. We ask them to help us, we go to the facilities. That’s what happens in Indonesia, find a better way to make the healthcare system more efficient,” he added. Meanwhile, Dr. Donald Pardede, MPPM, special advisor, Ministry of Health Development and Financing, Ministry of Health, said that
Indonesia is still currently facing an ideological conflict. Health services have long been based on a free market while the introduction of a social health programme through the BPJS and universal healthcare coverage demands regulation. “From the economic perspective, we cannot allow the increase in insurance premium. To some extent, the rich must help the poor. That seems easier said than done, but cigarette tax is one. But also, how to allow more premium by allowing to some extent differentiation in service? Those who are willing to pay may not choose to use BPJS in some cases, even though they can pay. If the patient can pay and the needs are not for terminal diseases, to some extent there must be a balance between the increase in premiums and the government adding more money,” said Budi Raharjo Legowo, chief finance officer, Siloam Hospitals Group. Dr. Ridwan also noted the delay problem in terms of the payment, which he said kills small businesses. “Is it possible if BPJS can create a regulation saying the payment for medication will also delay along with the BPJS payment? The expense for pharmaceutical will cover 40-50% itself,” he said. Prevention over cure Samosir said that compared to other countries like Malaysia and Singapore, Indonesia has not focused its energies on prevention and early stage treatment. According to him, there is no prevention management being embedded in the country’s
healthcare system and poor health amongst Indonesians has been causing a ripple effect on the overall healthcare expenditure. Dr. Tiara Kirana, chief executive officer, ADDAM Health, mentioned that Indonesian men are still extremely vulnerable to disease due to lifestyle habits that are largely preventable. Kirana said that Indonesia is losing a significant proportion of its working age men through premature mortality, affecting not only industry and commerce, but also fundamentally impacts social and financial positions of families. Due to the high rate of mother and child deaths in Indonesia, 66.67% of 566 specialty hospitals have been dedicated for maternal and pediatric health. On top of the already underserved healthcare market, the segment serving the male population in Indonesia has been negligible. Kirana said that Indonesia has to recognise the issue of men’s health and make amendments to policy, following developments in other countries such as Ireland, Australia, Brazil, where there is a working national policy for men’s health. Dr. Thomas Peter Budisusetija, MARS, chief executive officer, Pantai Indah Kapuk Hospital, noted that in the coming years, artificial intelligence (AI) will definitely take its place in the healthcare sector. The launch of Indonesia’s kata. ai is a first step in developing AI for Indonesia’s various sectors. Dr. Budisusetija added that executives must prepare their institutions by educating the leadership team about digital innovations, asking technical partners if they are up to speed, and developing a roadmap for digital strategies.
Indonesia must focus its energies on prevention
healtcare asia forum: manila
Panelists discuss fragmented healthcare industry
Closure looms for 300 ‘mom and pop’ hospitals in the Philippines The country’s smaller players are getting jittery as they are being wiped out by larger healthcare players.
he demise of as much as 300 out of 2,000 mom and pop hospitals in the Philippines, or small familyowned hospitals housing around 50-100 beds, looms in the near future as they cope with increasingly unsustainable operations due to increasingly heated competition from the country’s medical giants. The lack of financial assistance from the central government, plus the increased competition from improving facilities and services in public hospitals threaten their very existence, according to speakers at the first Healthcare Asia Roadshow Forum held last March 1 at the Makati Shangri La. “I am predicting the demise of mom and pop hospitals. The small hospitals the 50-100 bed hospitals - owned by the father, he built it, the son inherited it, and the sister and wives run it - they will not be able to compete with likes of Metro Pacific, Ayala Health United,” said Dr Teodoro Herbosa, Executive Vice President of the University of the Philippines System who also served as the former undersecretary of the country’s Department of Health. This grim outlook comes as the share of private sector hospitals is steadily eating up the local healthcare pie after private beds grew from 51% to 54% in a mere three years, effectively stamping on smaller medical service providers. “This is happening [right now]. Either you sell out or 18
This grim outlook comes as the share of private sector hospitals is steadily eating up the local healthcare pie.
you try to invest, you try to just be competitive with your efficiency models,” Herbosa added. Mom and pop hospitals play a key role in the delivery of healthcare services in the Philippines, an archipelago of more than 7,000 islands, as major healthcare providers may be unable to meet the medical needs of communities far from the city center from which they are usually located. “Our health system is fragmented,” said Dr Enrique Tayag, Assistant Secretary of the Department of Health. Sin tax The looming extinction of local, family-run hospitals is aggravated by ongoing improvements for the public healthcare sector which is drawing footfall away from smaller healthcare players. Most illustrative of this was when government healthcare facilities like the country’s largest state-run medical provider Philippine General Hospital witnessed improvements in its facilities thanks to a steady stream of revenue following the passage of the Sin Tax bill last 2012. The bill, which reformed excise taxes on tobacco and alcohol products, allocates 80% of collected taxes for the government’s universal health care programme. The remaning 20% are distributed nationwide for medical
Healthcare asia forum: Manila
Middle class is veering away from private hospitals
assistance and healthcare facilities. In fact, incremental revenue from the bill contributed to more than half (56.09%) to the Health Department’s budget for 2016. “When we passed the Sin Tax, the government finance people said we would earn only about $577.2m (Php30b) a year. In the first year in 2013, we earned $2.5b (Php130b) from cigarette taxes, 85% of that went to health care,” Herbosa said. However, the improvements reportedly prompted complaints from mom and pop hospitals because after the revenue boost, the government started buying equipment like CT scans, MRIs, ultrasound, to upgrade their systems which drew potential customers away, Herbosa said. “The middle class started moving away from the private sector and started going to the public hospitals,” he added. “This is also affecting the private sector business.” Private sector model Striking the right balance between improving healthcare delivery and keeping hospitals on steady financial footing is also a problem for Philippine hospitals especially amidst the rising inequality in healthcare access, according to Erlina Oracion, Clinical Quality Director for The Medical City. “How do I keep [both] my patients and my investors? How can I improve healthcare quality and keep my institution financially stable?” Oracion asked. This is further aggravated by a massive brain drain problem crippling the growth of the medical industry as the country’s doctors and nurses leave the Philippines in droves to seek opportunities in wealthier countries that can offer undeniably higher wages and better living standards. A report from The Economist Intelligence Unit identifies the Philipines and India as the two countries which account for a massive share of the developed world’s healthcare labour force, particularly for Organisation of Economic Development (OECD) countries like Australia, Canada, the United States and the United Kingdom. And this shouldn’t come as a surprise. A doctor working in United Arab Emirates (UAE) gets paid around US$5,093 monthly compared to a measly $542.69 received by a doctor earning his keep in the Philippines.
Improvements reportedly prompted complaints from mom and pop hospitals because after the revenue boost, the government started buying equipment.
In terms of specialisation, overseas Filpino workers in the healthcare industry, speciifically pediatricians and gynecolists, also earn the highest average salary at $2,239 monthly. “This outflow of doctors, which has resulted in an alarming ratio of 1 doctor to 1,429 Filipinos, could get worse if we do not provide them better working conditions, and decent pay and benefits commensurate to their qualification,” Philippine senator Antonio Triallanes IV said in a legislative committee after putting forward a bill lobbying for a doubling in government doctor salaries. As of this writing, the bill is still pending second reading. Faced with a systemic migration problem, the government must step in and ensure that the quality of healthcare services are kept at a standard even as it tries to keep its doctors and nurses within its borders. “The core business of government is not to run hospitals but to regulate that and provide a standard,” Herbosa said. Despite this noble aim, the government’s primary healthcare insurance provider, PhilHealth, is another source of headache for most private hospitals as its antiquated model and ill-equipped technology infrastructure is placing the most burden on local and family-run hospitals, according to Rustico Jimenez, president of the Private Hospitals Association of the Philippines. “You want a system that isn’t bureaucratic but one that is agile and very efficient,” Herbosa said. In exchange for PhilHealth accreditation for the institution’s quality of care, service delivery and establishments, hospitals and other health care providers are eligible for reimbursements under the National Health Insurance Programme. However, Jimenez said that local accredited hospitals are not properly receiving their dues. He cited an instance when a 10-15 bed hospital, which is eligible to $57,720$76,960 (Php3m-4m) in financial assistance, received only $3,848-$5,772 (Php200,000-Php300,000). Despite a provision under RA 10932 mandating the PhilHealth to reimburse health care providers for the basic emergency care and transportation costs incurred by poor and indigent patients, Jimenez cited anecdotal
Agile healthcare system
healtcare asia forum: manila reports PhilHealth delaying claims payments by two to six months. “The big hospitals can shoulder the claims of PhilHealth, but the small hospitals will eventually close,” Rustico warned, adding that a private sector model might enable the government health insurance agency to deliver better healthcare services. A report from the World Health Organisation similarly describes the poor state of health financing in the lower middle-income country. “In the Philippines, health financing is fragmented with insufficient government investment, inappropriate incentives for providers, weak social protection and high inequity.” Institutional threats If it’s any consolation to mom and pop hospitals, the worldwide industry push for digitalisation and AI threatening the very existence of smaller players is still a few years away from mainstream adoption in the Philippines where most hospitals still do much of their record-keeping by pen and paper. It’s also the last thing on the mind of local healthcare providers who face the more pressing issue of upgrading of their respective facilities and buying advanced equipment to service community needs. The small hospitals cannot really afford the necessary tech infrastructure and would rather spend it on various upgrades like facilities and medicine, Jimenez added. Even St. Luke’s Medical Center, one of the country’s largest hospitals with over $20m invested in various health tech initiatives, has just rolled out its digital transformation roadmap last November and is still in the process of building on its petabyte storage capacity. “We’re not there yet,” said President of St. Luke’s Medical Center Arturo de la Peňa in response to questions about the threat AI poses to healthcare industry. “Hopefully, by the middle of this year, we might be able to standardise collating our data on all aspects of medical care.” Andres Licaros Jr., President of the Asian Hospital and Medical Center, echoes this sentiment and adds that it’s up to big-name hospitals like them to show smaller hospitals how AI can serve as a force of good in record-keeping. It thus comes as no surprise that the Philippine healthcare system has but few vulnerable points to cyberattacks as the country is still in its infancy stages of adopting digital models compared to other developed
Facing the digital threats
Local push for digitalisation has been difficult
just because the Philippine healthcare system has few weak points doesn’t mean it can’t beef up its cybersecurity platforms now to prepare for the digital threats of the future.
countries.“There’s nothing to cyberattack [in the Philippines] because you can’t attack paper documents,” Atty. Bu Castro of the Philippine Hospital Association jokingly said. However, just because the Philippine healthcare system has few weak points doesn’t mean it can’t beef up its cybersecurity platforms now to prepare for the digital threats of the future. This is because several studies stress that hospitals, alongside governments and banks, are the top targets for cyberattacks because of the wealth of sensitive information they have on individuals in the form of patient records. To do this, hospitals must set aside the position of Chief Information Officer to someone in management who can provide accurate feedback from boardroom to patient care, and not delegate the task to a person with IT background, Herbosa recommended. “The strength of your IT security is only as strong as your weakest staff,” said The Medical City CIO Raymund Brett Medel who urged training for local healthcare professionals to help cope with the cyber threat. “Security and risk assessment is vital.” Digital threats are not the only bane plaguing Philippine hospitals face as the Marawi siege has shown that hospitals and doctors are amongst those first to be caught in the crossfire as armed conflict erupted between Islamic State-inspired rebels and government forces last May. The Amai Pakpak Hospital in Marawi, Lanao del Sur was the backdrop in which government forces first clashed with Maute group. After over four months of battle and massive losses on both sides, President Rodrigo Duterte officially declared the city free from terrorist group. A growing climate of impunity is similarly hampering the delivery of healthcare in the Philippines, according to Oscar Tinio, former president of the Philippine Medical Association. He cites the murder case of 31 year old barrio (provincial) doctor Dreyfuss Perlas who was deployed in Lanao Del Norte, a southwest part of the archipelago and killed on his way home from a medical mission last March. “When a physician or a healthcare provider is killed, it sends a message that there is impunity,” Tinio lamented. Amidst a myriad of internal and external issues plaguing the Philippine healthcare system, it might take more than a few years and heightened private and public sector participation to get the sickly system back on its feet.
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ANALYSIS: SMART HEALTHCARE
Combating shrinking margins
How should firms prepare amidst the evolution of smart healthcare?
With quality, outcomes, and value the watchwords for health care in the 21st century, sector stakeholders are looking for innovative, cost-effective ways to deliver patient-centered “smart” health care.
volving policies, processes, and capabilities to deliver smart health care will not be easy, given global health care’s magnitude and complexity. For example, there could be significant logistical and technology obstacles to overcome. More and more inpatient services are being pushed to non-traditional care settings such as the home and outpatient ambulatory facilities. Members of the health care delivery chain often work in multiple locations (hospital, doctor’s office, retail medical clinic, diagnostics lab). Patients may reside in a city or even a country away from their care providers. And health records frequently reside in different formats and on disparate systems. Clinicians may, therefore, have difficulty coordinating appointments and procedures, sharing test results, and involving patients in their treatment plan. In other words, care providers may be working hard but they are not necessarily working “smart.” Independently and collectively, health care stakeholders in 2018 are likely to face a number of existing and emerging issues in their quest to get “smarter”. Improving financial performance and operating margins is likely to remain a top issue. Many public and private health systems have been experiencing revenue pressure, rising costs, and stagnating or declining margins 22
Higher spending levels don’t always produce better health outcomes and value.
for years. The trend is expected to persist, as increasing demand, funding limitations, infrastructure upgrades, and therapeutic and technology advancements strain already limited financial resources. Combined health care spending in the world’s major regions is expected to reach USD $8.7tr by 2020, up from USD $7tr in 2015. As has been the case for the past several years, spending is expected to be driven by aging and growing populations, developing market expansion, clinical and technology advances, and rising labor costs (exacerbated by many markets’ competition for health care workers). Health care spending by country varies widely. Unfortunately, higher spending levels don’t always produce better health outcomes and value. For example, the United States, at 16.9 percent of GDP in 2016, continues to spend considerably more on health care than comparable countries but it is in the lower half of the Organization for Economic Cooperation and Development (OECD) countries’ life expectancy rankings. US health spending now exceeds USD $3tr per year, with growth rates projected to accelerate through 2024. Major spending categories are led by hospital care (USD $1tr), physicians (USD $634.9b), and prescription drugs (USD $328.6b). There are various views as to the drivers of health care
ANALYSIS: SMART HEALTHCARE spending. In developed markets, it’s expected that aging populations will continue to be a major factor—especially in Japan, where the share of people over age 65 will reach almost 30 percent by 2021, and in Western Europe, with its share nearing 21 percent. Changing patterns of care, including increased visits and higher-quality services, could also be major cost-drivers.Therapeutic advances and the desires of doctors and patients are prompting more (and more costly) tests and interventions for chronic and communicable diseases. What drives spending? Providers, payers, and life sciences companies may have to balance the development and adoption of new therapies and medical technologies with their potential quality, experience, and health outcomes. In developing markets, growing populations, an increase in higherincome households, and rising consumer expectations are pushing up health costs. In addition, health systems are dealing with the ongoing challenges of containing and treating both communicable and chronic diseases. Once a hallmark of developed markets, chronic diseases (diabetes, chronic heart disease, Alzheimer’s disease) exacerbated by lifestyle risks are becoming a shared health and cost issue. Adding to the cost equation, many health systems are struggling to update aging infrastructure and legacy technologies with already limited capital resources. As health care costs increase, affordability and insurance coverage remain problematic. In the United States, deductible cost increases are far outpacing increases in costs covered by insurance. Brazil’s private health insurance sector lost 2.5m beneficiaries between 2014 and 2016 due to the country’s high unemployment rate. Added to that, companies in Brazil had to cut expenses, and changing their employees’ health insurance plan to a cheaper one was a popular option.Sector stakeholders’ efforts to manage rising costs are complicated by price controls, reduced funding, and misaligned incentives (e.g., the longstanding fee-for-service payment model). For example, China’s policy of “zero markups” for drugs sold at hospitals is a major contributor to eroding profit margins. For more than 20 years, hospitals were able to add a 15 percent surcharge to the cost of drugs. Some hospitals derived as much as 40 percent of their revenues Healthcare spending
Health care expenditure as a share of GDP, 2016
Many hospitals in India are discovering they need to build more financially sound operating models to offset diminishing margins due to price controls on drugs, consumables, and medical device.
from drug sales—which could account for their entire profit margin.21 In 2009, the Chinese government passed the Zero-Markup Drug Policy, to rein in out-of-control drug costs, curb over prescribing, and reduce the financial burden to the public, especially those in low-income settings. The policy went nationwide in 2015 and hospital margins have been falling as a result. Many hospitals in India are discovering they need to build more financially sound operating models to offset diminishing margins due to price controls on drugs, consumables, and medical devices, and due to insurance companies’ use of growing patient share and buying power to squeeze hospital pricing. In addition, India’s medical workforce shortage means available doctors command a high price structure, further eating into hospital margins. Consolidating and collaborating Health care providers are employing a variety of strategies to combat shrinking margins and rising costs. Case in point: Rather than being paid more to increase inpatient volume to generate revenue, many health systems are responding to new financial incentives to treat patients outside traditional hospital settings. To illustrate the impact, the proportion of revenue from inpatient services relative to outpatient services in US hospitals has fallen 10 percentage points since 2004. Among other marginenhancing strategies are combining traditional workforce planning with predictive analytics to improve efficiencies in labor costs and find alternatives to contract labor; and revisiting revenue cycle strategies, such as leveraging new technologies and analytics tools that help improve processes and coding to reduce claims denials. In another example, large medical groups in China are trying to form a “closed-loop” supply chain by acquiring hospitals. CR Healthcare currently manages 109 hospitals with more than 11,000 beds, whilst sister company CR Pharmaceuticals supplies the hospitals’ drugs. Chinese insurance companies are also using similar business models to promote commercial medical Insurance. In April 2017, Japan’s government began allowing medical corporations to create nonprofit holding companies without corporate acquisitions as a way to promote organizational change. Under the scheme, a holding company can manage several medical institutions/ HEALTHCARE ASIA
ANALYSIS: SMART HEALTHCARE Health care Spending 2015-2020
Source: The Economic Intelligence Unit
nursing care facilities in the region. This may be especially effective for medical institutions in rural areas that need to increase operational efficiency despite declining patient populations. Large conglomerates are entering Southeast Asia (SEA) and expanding laterally between life sciences and health care through M&A and joint ventures (JVs), and traditional medical technology (medtech) companies are moving into care provision. And, nontraditional players like technology companies and other disruptors are entering the health care market and providing innovative perspectives. Considerable opportunities exist for health care players to work collaboratively on innovative access, delivery, and financing models to reduce health care costs and increase quality. Whilst reducing costs has long been a way for health care organizations to offset shrinking margins, many are pursuing new cost-cutting measures, such as developing alternative staffing models, shifting patients to outpatient services, and reducing administrative and supply costs. In addition, health systems are exploring new revenue sources. Some, for example, are looking to capitalize on their intellectual property (IP) by working with employees to develop innovations including medical devices, training videos, health information technology (HIT) tools, or patient safety solutions. Japan’s government has introduced a series of reform initiatives, the most symbolic being the establishment of an Integrated Community Care System that combines health care, long-term care, housing, and livelihood support services in a unified manner so that Japan’s elderly can receive continuous quality care in their local communities versus the hospital. The Singapore Ministry of Health (MOH) has categorized the nation’s top health care reform issues and trends into three broad shifts referred to as the “3 beyonds”—moving “beyond the hospital to the community,” “beyond quality to value,” and “beyond health care to health.” The MOH is focusing its productivity improvement projects in four areas to deliver quality care and better value: helping patients navigate the health care system more efficiently without compromising quality of care; automating labor-intensive activities to increase 24
operational efficiency; streamlining workflows, expanding job roles, and upskilling health care staff to work more effectively and productively, and meet the needs of patients more holistically; and empowering patients, caregivers, and volunteers to self-serve and self-care. Complex regulations Growing health care market complexity leads to more regulatory complexity and increases the need for heightened stakeholder risk management. And whilst health systems worldwide share overarching health policy and regulatory goals—ensuring quality care and patient safety, mitigating fraud, and cyber threats—regions and countries are grappling with their own specific challenges. The number of private hospitals in China surpassed public hospitals in 2015, prompting more regulatory Whilst reducing supervision of the registration, drug management, medical costs has long environment, and physician certification of private been a way hospitals. Adding to the need for oversight, the number for health care of illegal private medical institutions is also growing, organizations accompanied unfortunately, by an increase in medical to offset negligence incidents. shrinking In May 2017, Japan introduced a law establishing a margins, standardized rule for anonymously processing medical many are care information. The law’s purpose is to promote R&D pursuing new and advanced medical studies. The new legislation is cost-cutting expected to drive development and widespread promotion measures of a comprehensive medical database to aid research for drug discovery using artificial intelligence (AI) and other advances. Turning the vast volume of available health care data— from medical devices, smartphones, activity trackers, electronic health records (EHRs), and more—into insights that enable personalized medicine necessitates new aggregation, storage, and modeling approaches. Cognitive computing (machine learning, neural networks, deep learning, etc.) is a common technique for dealing with large volumes of rapidly changing data. It allows for a variety of statistical algorithms, can involve a large number of highly granular models, and can quickly generate new models for new data. It can be used to predict (disease onset, for example), detect patterns in data (a drug’s effects on populations or individuals, for example), or to classify populations (patient subpopulations, for example). Machine learning can also be used to combine data across disparate data sources—say, to create a Patient 360 view. There is no doubt that change is coming to health care. Exponential technologies are helping to drive that change by making care delivery less expensive, more efficient, and more accessible on a global basis. Consider: Beginning in 1999, scientists spent five months and approximately USD $300m to generate the first initial “draft” of a human genome sequence. The cost to generate a human genome sequence is now less than USD $1,000, and could eventually drop to less than USD $1. In coming years, exponential technologies have the potential to dramatically disrupt the systems and processes that have historically defined the industry. From Deloitte’s “2018 Global health care outlook:The evolution of smart health care”
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ANALYSIS: VALUE-BASED CARE The HTA of new medicines is not a new concept in Taiwan. The CDE, a private, not-for-profit non-governmental organisation, was created in July 1998 to provide value-based evidence for decisionmakers. In December 2007, the agency established a new division of HTA, now known as the National Institute of HTA, to allow for greater focus on comparative (clinical) and cost-effectiveness analyses of new drugs and medical devices, as well as the impact of new medical innovations on the country’s healthcare budget. It is one of Asia’s oldest government-administered services
Taiwan eyes pushing for value-based healthcare
Taiwan has used a variety of value-based measures across its health system for some time but a coherent framework is still lacking.
aiwan’s citizens benefit from one of the oldest government-administered, insurance-based national health services in Asia, and one of the few in the region that provides universal coverage. Established in 1995, the single-payer model health insurance programme is now managed by the National Health Insurance Administration (NHIA) and covers 99% of the country’s population. Expenditure on health accounts for a comparatively low 6% of the GDP. Costs bottoming The system is notable for comparatively low costs, comprehensive benefits, short waiting times, and completely free access to doctors, clinics and hospitals of the patients’ choice. The benefits package includes a list of thousands of prescription drugs, according to Joey Kwong, collaborate researcher at the National Center for Child Health and Development, Tokyo, Japan. Taiwan’s health system ranked 45th in the Global Burden of Disease Study’s 2015 Healthcare Access and Quality Index, out of 195 countries 26
Our healthcare providers have complaints about the design of our national health insurance.
and territories surveyed. The Index, which measured mortality from causes “amenable to personal healthcare”, was previously compiled in 1990. Fee regulation The single-payer structure of the Taiwanese system enables it to set and regulate fees, as well as impose a global budget, helping the NHIA to control costs, a 2015 article by the Brookings Institution pointed out. Jasmine Pwu, director of the National Hepatitis C office under the Ministry of Health and Welfare (MOHW) and a former director of the Health Technology Assessment (HTA) division at Taiwan’s Center for Drug Evaluation (CDE), said the government is being challenged about how it evaluates research, the brand value of drug manufacturers and, to a greater extent, the patient’s perspective. “Our healthcare providers have complaints about the design of our national health insurance,” she said. “Pharmaceutical and medical device companies ask questions about how reimbursement decisions are being made.”
Not a priority yet The Institute was commissioned with the authority to both reduce the burden of drug costs and to avoid unnecessary medical waste and uses methodologies that are “well-developed and transparent”, according to Ms Kwong. Research institutes use a range of measurements familiar in Europe and other countries where HTA is common, including qualityadjusted life years, disabilityadjusted life years, incremental cost-effectiveness ratios, willingness-to-pay thresholds and benefit-cost ratios and net benefit. Without a broader structure for integrating these metrics, however, they are not required in the National Institute of HTA’s dossiers, according to K Arnold Chan, a professor at National Taiwan University College of Medicine and director of the NTU Health Data Research Center. “Those metrics are familiar to most people, but there is no framework to incorporate them into a very rigorous system yet,” he added. “It’s not the very top priority of senior officers of the NHIA.” The MOHW compiles vital statistics and life expectancy data, whilst the the ministry’s Health Promotion Administration conducts surveys on major diseases and risk factors. From The Economist Intelligence Unit’s “Value-based healthcare in Taiwan: Towards a leadership role in Asia”
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Delegates from Malaysia, Philippines, Taiwan and Turkey for the pre-show media tour of Medicare Taiwan 2018
Extensive R&D boosts Taiwan’s bid for Asia’s medical tourism market The exports of medical devices hit a CAGR of 8.6% to US$1.82b in 2015. Can it beat its own record?
rom revamping the traditional syringe to manufacturing highdensity electrical currents for surgical use, Taiwan SAR is slowly but extensively building on its medical research and development capabilities in its bid to put the island nation on the map for quality and affordable healthcare services. Taiwan is steadily leveraging on its strong manufacturing expertise in high-tech electronic gadgets to disrupt the region’s medical industry. In fact, exports of medical devices were able to weather the overall economic slowdown of the past years with compound annual growth rate hitting 8.6% during 2011-2015 to US$1.82b. As a major market for US exports, Taiwan’s medical device market is all set for a promising growth trajectory with a government report estimating it to grow by 7.7% between 20142019, making it amongst the world’s 28
Taiwan’s medical device market is all set for a promising growth trajectory.
top 25 in terms of market value at an estimated US$5.94b in 2017. Additionally, its strategic connection to the region’s emerging markets as well as to the Mainland make it all the more attractive for foreign investment. “Taiwan is well positioned to act as a bridge to China for multinationals whilst domestic firms also look to collaborate with Chinese counterparts to take advantage of China’s healthcare system reforms,” a report from accounting firm PwC noted. No shortage in private sector The Tsai administration’s latest economic development model has identified the biomedical sector as one of the next generation industries part of the national research and development programme. This involves enhancing global links with local innovation clusters like the Nangang Biotech Industry Park, Jhubi
Medical Materials R&D Park, Central Taiwan Science Park and Southern Taiwan Science Park to emerge as the undisputed R&D leader in the Asia Pacific. “The government wants to take advantage of Taiwan’s existing industrial foundation to help the country upgrade itself at a faster pace and become more competitive,” President Tsai Ling Yen said in an interview with Channel News Asia. Launched in 2009, the Taiwan Diamond Action Plan for Biotech Take-off aimed to strengthen the basic industrial structure of the biotech, pharma and devical devices market. The second phase of the programme, the Taiwan Biotech Industrialisation Take-off Action Plan, was launched in 2013 to promote the development of new drugs, advanced medical devices and healthcare management services after the first phase succeeded in
EVENT COVERAGE: MEDICARE TAIWAN The private sector is also doing its part by ramping up respective R&D budgets.
Transverse Industries Co. Ltd.
stimulating private sector interest in the sector after sales hit US$3.3b in the mere five years after its launch. Promoting Taiwan as a leading medical tourism destination with the main goal of attracting medical tourists from China is similarly buoying the local healthcare industry, according to PwC. “Medical care in Taiwan is on a par with more developed countries but service fees are lower. Its other key competitive advantages include the availability of highly qualified personnel and stateof-the art facilities and procedures,” the accounting firm noted. Biotech market Some Taiwanese healthcare providers have also received international accreditation from US-based Joint Commission International, affirming the global quality of healthcare delivery in the territory. The government has also established medical service centres at major airports including Taoyuan International Airport to provide medical services to inbound visitors. An internationally-educated talent pool and the availability of funding and venture capital firms is similarly accelerating Taiwan’s medical R&D efforts, according to a report from business consulting firm Frost & Sullivan. The island is home to some of Asia’s largest business conglomerates like Uni-President and Formosa Plastics Group which have made hefty investments in devices manufacturing and biomedical technology in the past although some companies have chosen to go public to raise funds for product trials.
“Taiwan’s biotech market is relatively small in size, worth about US$3.3b in 2013 but its growth momentum is strong, due to government policy support and the maturation of companies’ drug pipelines,” PwC added. Ramping up the budget The private sector is also doing its part by ramping up respective R&D budgets and developing new products and frameworks with the aim of streamlining the delivery of healthcare services for the island’s 23m population. “Several Taiwan companies have in recent years established themselves as one of the leading medical device companies. Several of these companies have established an international team with marketing offices and distributors spread worldwide. New start-up companies are also banking on more innovation and a higher degree of research, allowing them to come up with high quality devices which will allow them to compete on equal grounds with global companies,” Frost & Sullivan noted. Due to the relatively young age of the industry, most of the manufacturing effort revolves around the production of safety syringes, medical disposables, blood glucose monitors, electronic and infra-red thermometers and home-use medical appliances as the low production costs have allowed local companies to gain a foothold in these sectors, Frost & Sullivan explained. One such company is manufacturer Anntong who is offering its accumulated 29-
year experience in automotive manufacturing to the medical devices sector through innovative product offerings. One of their products include the micro-needle array which builds on the traditional syringe. Unlike the syringe which has only one concentrated point for drug delivery, Anntong’s innovative product offers several contact points which they claim allows for faster and more accurate drug administration. “Regarding the micro needle array, it is developing an innovative line of novel microneedle-based transdermal drug delivery devices. This breakthrough technology revolutionises the way in which medicines can be administered, increasing efficacy, safety, and compliance,” said Anntong chief of R&D Stephen Wang. Electrical surgical unit provider Yesng is also expanding its R&D efforts through a newly opened factory in Tai Chung where it can meet growing demand for specialised ESUs. Powered by high-density electrical currents, the tech can surgically cut tissue, rendering scalpels and blades irrelevant and similarly do hemorrhage control by performing the function of sutures and clamps. Similarly, manufacturer Transverse is also leveraging on the multi-faceted capabilities of laser technologies to address a wide range of medical problems like treating eye diseases, detecting ulcers, growing hair, pain management and even for daily health maintenance. Photobiostimulation or the process in which low-level lasers treat diseased areas actually provide a more accurate aim and do not cause damage on a cellular or tissue level, said Joseph Huang of Transverse. Written by Sandra Sendingan
China Surgical Dressings Center
Dr Loke Wai Chiong The future of healthcare for Singapore’s ageing population
Dr Loke Wai Chiong Healthcare Sector Leader Deloitte Southeast Asia
ingapore’s ageing population is rising rapidly and elderly healthcare support is top of the government’s agenda with several major steps already taken over the years to minimise the impact on the economy, society and national healthcare expenditure. Globally, the “medicalised” model is shifting to become more social and rehabilitative. Singapore is similarly shifting focus and is placing emphasis on community-based care - delivering value at lower cost, and promoting an individual’s personal responsibility for his own health. In this year’s Budget speech, the Finance Minister announced two measures that lean towards this focus – expanding the Community Network of Seniors to provide social and healthcare support within the community setting, and consolidating social- and health-related services to streamline and improve delivery of services for the elderly. These moves make a lot of sense and are laudable – people are living longer with more complex diseases that require coordinated health and social care, and sometimes social determinants of health are even more important. Other innovative solutions can also be considered. Moving into the future, seniors will become increasingly digitally savvy and will be able to enjoy the conveniences afforded by technology. This will give rise to more elderly preferring to live independently and age-in-place within a supportive community. Co-living arrangements are seeing success in other parts of the world. For example, in the US, start-ups like Common and WeLive have set up full-fledged co-living spaces offering housekeeping services and an instant community of friends for less than US$1,500 a month. Established player Property Markets Group has developed small, but highly customisable integrated private spaces that prioritise common areas built to foster interaction. There is potential to develop similar living spaces in Singapore that offer not only amenities like the Internet and housekeeping services, but also an integrated medical service and facility on-site, a robust elderly support community, and easy access to family members. However, co-living may not be for everyone. Some would choose to live alone or with family members. For such cases, home-based care should be made more viable and sustainable, with solutions that are customisable and enhanced using innovative technology. Already, there are different organisations that have initiatives to provide these solutions and encouragement from the government is crucial for further developments in this space. One solution is to build an elderly-friendly, smart IoT-enabled infrastructure. A good example is SHINESeniors, a project by the SMU-TCS iCity Lab, that aims to deliver more effective community care services through ICT to support ageing-in-place. It does so by developing sensor-enabled homes and personalised home care for the elderly. In such homes, the physical environment (such as air quality, noise level, temperature and humidity) and daily living patterns (such as their mobility patterns at home, medication 30
Application of sharing economy concept to senior care
adherence and sleep quality) can be monitored unobtrusively, without infringing on privacy and comfort. By observing and analysing living patterns over time, changes in well-being can be detected before the senior’s condition deteriorates. Family and community caregivers can then be activated to intervene in a timely manner - especially in emergency situations such as falls or calls for help. Another way is to apply the concept of the sharing economy to senior care solutions by creating digitalised shared services and developing digitally-enabled living arrangements. A shared service currently available in Singapore is Homage – a web and mobile platform that provides on-demand elderly caregiving services. It combines curated and trained caregivers with smart technology, making the entire caregiving management process hassle-free. Communications services are also important to create a meaningful feedback loop. There are services available worldwide that allow healthcare providers and life science companies to harness emerging technology and big data to create meaningful patient dialogue. For instance, through connected and regulated applications and devices, the care provider is able to conduct digital therapy, improve patient outcomes, and support healthcare professionals in managing patient care. Also, internal and external data can be analysed to gather unique insights into patient treatment and interactions whilst demonstrating real-world evidence. Lastly, care-team coordination can be enabled to effectively support care coordination across practitioners, caregivers and other team members. Good examples can be found in the UK such as Patients Know Best and Health Fabric; and in integrated health and social systems like the Canterbury district in New Zealand.
Fabian Boegershausen ASEAN healthcare spending to reach US$740b by 2025
he growth trend of healthcare expenditures per capita in six major Southeast Asian economies - Malaysia, Singapore, Indonesia, Philippines, Thailand, and Vietnam - has consistently outpaced the growth in GDP per capita for almost a decade. In 2017, total healthcare spending of the ASEAN 6 nations reached ~USD 420b. We forecast that these will increase to ~USD 740b in total spending by 2025, signifying a ~USD 320b increment in healthcare costs. Drivers of rising healthcare costs in ASEAN Whilst ASEAN nations are often cited for having a very young population, the region is in fact undergo a profound shift in age demographics towards an older population. By 2050, the part of ASEAN 6â€™s oldest population bracket (age 65 and above) will reach 20% of the total population, doubling its size compared to today. The age transition will impact the ASEAN 6 nations on multiple levels. Primarily, a relatively smaller working population will have to carry the burden of caring for a relatively larger old population. This larger and older population will pose an evergrowing demand for medicine and medical care for the ASEAN 6 nations. Additionally, key health risk indicators such as smoking, overweight and obesity will compound with the effect of an ageing population. Amongst the ASEAN 6 nations, Indonesia posed the highest prevalence in smoking in 2015 whilst Malaysia surpassed other ASEAN countries in 2016 for overweight and obesity by far. These unhealthy lifestyles will aggravate the demographic impacts on health in the ASEAN 6 nations, escalating the situation to an older and sicker population. Over the past years, governments in the ASEAN 6 nations were able to inject a significant proportion of state budget into the healthcare industry. Amongst the ASEAN 6, Thailand and Vietnam afford the highest share in GDP whilst the Philippines and Indonesia are the relatively lowest public spenders. Recently, however, the increases of healthcare spending relative to total public spending have come to a hold and the share of health spending has begun to stagnate or even decrease. This implies governments in the ASEAN 6 nations are likely unable to allocate higher proportion of their current budgets to healthcare and will need to find other means to address the growing demand. Providing good quality healthcare at reasonable costs Although ASEAN 6 nations will inevitably need to deal with the ~USD 320b funding gap in less than a decade, opportunities still remain. Given the imminent rise in healthcare demand, governments can take early action to manage costs, strive for a more efficient healthcare system and invite the private sector to help make new investments in the provision of healthcare. First of all governments should generate new sources of healthcare funding, for instance through means of taxation schemes which 32
Fabian Boegershausen Manager Solidiance
Population growth in ASEAN 6 countries (CAGR, 2015-2040, %)
World Health Organization (WHO), United Nations, Solidiance analysis
could provide more fiscal maneuvering room. Decisive effort to cut costs Introducing mild taxation on unhealthy goods such as salt and sugar would likely result in a net benefit for the healthcare system given the improved incentives on consumption and state revenue generated from the taxed goods. For example, the Philippines imposed tax on sugary beverages earlier this year to improve health behavior incentives; other ASEAN countries can follow suit and apply the same principle. Moreover, governments in ASEAN should make the effort to gradually streamline healthcare spending requirements for patients, for example by introducing more significant yet manageable and effective co-payment fees for public hospitals in heavily subsidisedpublic health systems as found for instance in Malaysia. Secondly, policy leaders will need to make decisive effort in reducing overhead costs in nonpatient facing activities (i.e. administrative and support functions), which will play an essential part of freeing up budget in any national and local health organisations. Instead of conducting redundant administrative procedures, such as year-long approval processes for drugs that have long been cleared by western or international institutions, funds could be spent on personnel inpatient care such as doctors, nurses, and other directly health affecting functions. Digitalisation will likely be yet another tool to harmonise and manage administrative efforts. Thirdly, by investing more in prevention at early stages of treatment, future patient costs can be avoided though it may require additional spending early on. Early diagnosis and treatment of certain illnesses can greatly improve survival rates of patients and can avoid the need for continuous treatments later. A great, albeit controversial, example here are kidney transplants which, if successful, avoid the need for life-long dialysis treatments.