Healthcare landscape in bric nations

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Healthcare Landscape in BRIC Nations September 2013


Content Snapshot of Healthcare Landscape in BRIC Nations .............................................................................3 Brazil .................................................................................................................................................4 Russia ................................................................................................................................................5 India ..................................................................................................................................................6 China .................................................................................................................................................7 References.........................................................................................................................................8


Snapshot of Healthcare Landscape in BRIC Nations Health spending (USD per head)

Brazil has the highest health spending (per head) among the BRIC nations, followed by Russia. China and especially India lag behind on health spending. However, both countries will witness over 40% increase in their health spending by 2015.

Population growth (millions)

China has the highest population among the BRIC nations followed by India. Although it will remain the most populous nation, India will witness the highest population growth of 6% by 2015. Russia, on the other hand, is the least populous country when compared to other BRIC nations and will continue to witness population decrease in the coming years leading to 2015.

Health expenditure, public (% of total health expenditure)

Russia leads the BRIC nations in the public contribution towards health expenditure with 63%, followed by China with 53%, indicating a higher degree of government involvement in the healthcare sector.

Healthcare Landscape in BRIC Nations

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Brazil Brazil is the largest healthcare market in Latin America with a population of 195 million (2012) and GDP of USD2.253 trillion (2012). It has the highest per head healthcare spending in Latin America. Public contribution is about 45% of the total health expenditure. Out-of-pocket healthcare expenses were 57.8% in 2011. 1,500 1,170

1,236

1,000

1,294

197

1,351

1,402

204

200

202 200

198

198

195 500

196

193

194 192

0

190 2011

2012

2013

Health Spending (USD per head)

2014

2015

Population Growth (millions)

Payor Market Unified Health System (SUS), also known as Unified Health Care System, is Brazil’s national health plan, which has contracts with public as well as private providers for providing free health care. However, due to long waiting time for procedures, well-to-do citizens additionally buy private health insurance, which gives them access to private healthcare services at doctor’s clinics, hospitals and diagnostic laboratories. The private sector insurance and plans beneficiaries are mainly divided into medical aid plans with or without dental care and dental-only plans. At the end of 2012, about 48 million beneficiaries where covered under private medical aid plans with or without dental care showing a growth of 2.1% over 2011 and another 18.6 million covered under private dental-only plans, representing a growth of 10% over 2011. Some of the major players in the private health insurance segment are Bradesco, Sul America and Tempo.

Provider Market Hospital groups in Brazil do not have national presence and all private hospitals operate only regionally. The healthcare provider market is highly fragmented, consisting of about 1,000 companies since 2010, according to healthcare regulator ANS. The private sector provides many services in public hospital and there are also few private hospitals that treat private patients exclusively. As the largest private hospitals in the country are philanthropic and/or nonprofit, there is a huge demand for new investment. However, the Brazilian legislation restricts international investments in hospitals. Some of the major players in the private health providers market are Amil, Omint and Samaritano. In October 2012, UnitedHealth Group took over Amil Participacoes SA (a healthcare company, which together with its subsidiaries, provides healthcare plans and medical, hospital & dental care services), Brazil’s biggest healthcare provider.

Future Trends Healthcare spending in the country is also anticipated to grow at a CAGR of around 8.5% during 2012-2015. Major diseases driving the healthcare expenditure include hypertension, cancer, tuberculosis, obesity and diabetes.

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Russia Russia has a population of 142.8 million (2012), which is decreasing per year, and GDP of USD2.015 trillion (2012). Public contribution is about 63% of the total health expenditure. Out-of-pocket healthcare expenses were 87.9% in 2011. 1,000

909

800 600

688 143.0

709

762

826 144

142.8

143

142.5

400

145

142.2 141.8

200 0

142

141 2011

2012

2013

Health Spending (USD per head)

2014

2015

Population Growth (millions)

Payor Market Russia offers a Mandatory Medical Insurance (OMS) in the public healthcare system, which guarantees all the citizens equal opportunities to receive medical care in accordance with the annually adopted programs. Insurance companies are selected by the state in each region. They are financed from state budgets at all levels, from tax revenues and other sources. The scheme is financed by employer’s contribution and local authorities’ contributions paid for non-working population. Federal Fund of the mandatory health insurance is considered to be the main insurer and is financed by employers’ contributions and federal budget means. However, a new legislation, effective January 2013, has reduced the free medical care to USD730 for Moscow and USD300 for the rest of the country, a step taken towards cutting health spending by 8.7% in 2013 and by 17.8% by 2015. Besides OMS, there is Voluntary Medical Insurance (DMS) that can be bought by consumers as private health insurance coverage. Some of the major players in the private health insurance market in Russia include Sogaz p., ROSNA p., Zhaso p., Ingosstrakh p. and Reso-Garantiya p.

Provider Market As of 2012, about 15% of medical services are provided at non-state-owned healthcare institutions and as many as 64% of Russians used private clinics and other healthcare facilities. Some of the important players in the private outpatient clinics and hospitals are Medsi p., International On Clinic Medical Centre p., European Medical Centre p. and Medicina p.

Future Trends According to a healthcare reform in Russia, a budget up to USD15.1 billion would be spent during 2011-2014. The reform aims to improve spending efficiency and public access to medical services and raise salaries of medical personnel, provide patients with medicines and food, and purchase diagnostic equipment.

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India India has a population of 1.22 billion (2012) and GDP of USD1.842 trillion (2012). Public contribution is about 28% of the total health expenditure. Out-of-pocket healthcare expenses were 86% in 2011. 160 140

124

120 100

107 95 82

1,280

1,273.6

1,260

1,255.8

1,237.9

80

1,240 1,220

1,220.0

60 40

141

1,200

1,202.1 1,180

20 0

1,160 2011

2012 2013 Health Spending (USD per head)

2014 2015 Population Growth (millions)

Payor Market Indian health insurance market is highly untapped, with less than 15% of the population with some form of health insurance coverage. This creates a huge growth opportunity for payors. Health insurance schemes in India include Voluntary health insurance schemes or private-for-profit schemes such as mediclaim policy, Mandatory health insurance schemes or government-run schemes [such as Employer State Insurance Scheme (ESIS), Central Government Health Insurance Scheme (CGHS), Universal Health Insurance Scheme (UHIS)], Insurance offered by NGOs/Community-based health insurance, and Employer-based schemes. Currently, the health insurance industry is dominated by four public sector entities (National, New India, Oriental and United India), together they cover about 60% market share. The remaining share is with 17 private sector players, of which four are stand-alone health insurance players (Star Health, Apollo Munich, Max Bupa and Religare Health). Earlier in 2013, the insurance regulator in India – Insurance Regulatory and Development Authority (IRDA) – classified health insurance as a separate category and has permitted the insurers to tie-up with banks. This move has allowed the four stand-alone health insurers to collaborate with banks through bancassurance tie-ups across the nation.

Provider Market Hospital services industry in India has generated revenue of USD45 billion in 2012 and is expected to reach USD81.2 billion by 2015. India provides medical services that have a distinct cost advantage, giving rise to medical tourism. Medical tourism market is expected to expand at a CAGR of 27% to reach USD3.9 billion in 2014. Also, rising demand from the growing middle class in India’s large cities is fueling growth in private sector healthcare. Large national and state government programs will spur growth along the primary (and secondary) care sector and public health domain. Some of the leading players in the healthcare provider market are Apollo Hospitals Group, Fortis Healthcare India and Global Hospitals India.

Future Trends Hospital services revenue is expected to grow at a 20% CAGR during 2012-2017. The country's healthcare system is developing rapidly and continues to expand its coverage, services and spending in both the public as well as private sector. This is creating a large market for hospital information systems and other healthcare-related IT solutions. The government has permitted FDI up to 100% for health and medical services under an automatic route.

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China China has a population of 1.33 billion (2012) and GDP of USD8.227 trillion (2012). Public contribution is about 53% of the total health expenditure. Out-of-pocket healthcare expenses were 78.8% in 2011. 500 1,355 431 450 1,350 375

400 325

350 272

300

237

250 200

1,348.8

1,340

1,342.3

1,335

1,335.3

1,330 1,325

1,328.0

150 100

1,345

1,320 1,320.3

1,315

50

1,310

0

1,305 2011

2012

2013

Health Spending (USD per head)

2014

2015

Population Growth (millions)

Payor Market The urban employee basic medical insurance (UEBMI), urban residents basic medical insurance (URBMI) and new rural cooperative medical system (NRCMS) are the most important components of China’s health insurance system. Commercial health insurance, and a variety of other forms of medical insurance, also serves to supplement the system. In 2011, about 95% of the Chinese population was covered by health insurance. Gaps in the public medical coverage such as high co-pay requirements, drug exclusions and inflexible plans create challenges like under-treatment and high out-of-pocket costs. Private health insurance is gaining popularity in China to provide a possible solution to public healthcare systems woes. As of 2012, private health insurance covered 7% of the Chinese population; and it accounts for only 2% of healthcare spending.

Provider Market China has a largely hospital-based delivery system managed through the Ministry of Health and local governments, supplemented by a vast cadre of village doctors and newly-developed system of grassroots providers in urban areas. Public healthcare system provides emergency and in-patient services to almost 90% of the population. As of 2011, the Chinese healthcare industry has 38% of private hospitals. Some of the major providers in the Chinese healthcare market include Peking Union Medical College Hospital, West China Hospital of Sichuan University, General Hospital of the People’s Liberation Army, Shanghai Ruijin Hospital, Fudan University Huashan Hospital and some successful privately-owned hospitals are Aier Ophthalmology and TC Medical.

Future Trends Healthcare sector in China is expected to increase its expenditure at a CAGR of around 19% during 2012-2015. Major diseases driving the healthcare expenditure include diabetes, cancer, infectious diseases and hypertension.

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References • • • • • • • • • • • • • • • • • • • • • • • • • •

www.ans.gov.br Society of Actuaries Insurance Journal Global Business Insurance Journal News www.prnewswire.com www.pmlive.com Organisation Internationale du Travail www.bamf.de Russia Beyond The Headlines www.pmrpublications.com Stockholm Region office in St. Petersburg Zunia www.ft.com EIU World Bank zeenews.india.com www.actuariesindia.org www.dnaindia.com Gartner IBEF iis-db.stanford.edu www.wpro.who.int www.forpressrelease.com www.reportlinker.com Other secondary research sources

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