Coming Challenges for Healthcare in Asia Potential Opportunities 2011 & Beyond May 2011 1
Coming Challenges for Healthcare in Asia
Potential Opportunities 2011 & Beyond
May 2011
1
Framework of Report
2
Provide Overview & Key Logic of Report Leading to Options
Section One- Challenges Facing Global Healthcare
Section Two- Future Scenarios for Asia’s Healthcare Industry
Section Three- Assessing Partnership Opportunities
3
Detailed Agenda of Report
4
Section One- Challenges Facing Global Healthcare
� Global Healthcare Faces Pressure from Triple Conver gence � Trend 1 : Ageing World Populace � Trend 2: Rising Global Healthcare Costs � Trend 3: Unequal Distribution of Healthcare Capabil ities
� Multiple Impact on Global Healthcare � Impact 1: Nature of Services � Impact 2: Global Healthcare Industry � Impact 3: Healthcare Industry Sectors
� Healthcare Spending: Large Differences, Unequal Res ults � Case Study: US Healthcare System
� Rise of Healthcare Consumers
Provides background to key forces challenging globa l healthcare
Convergence Creates Undue Challenges on
Global Healthcare System
• Opportunities for Global Public & Private Sectors Drive to Create Innovative Solutions to Bring the Global Healthcare System back to Equilibrium (?)
Triple Convergence
Global Healthcare Faces Increased Pressure from the Triple Convergence of Major Trends ..
Global Health-
care 2050
Trend One: Ageing World
Populace
Trend Two: Rising Global
Healthcare Costs
Trend Three: Unequal Distribution
of Healthcare Capabilities
Globally number of people aged 60 years or older will reach 2
billion by 2050
• Old-age dependency ratios will increase significantly as the number of elderly increases and the working-age populations decline
• Europe will witness the highest old-age dependency ratios at 48% vs Asia with a relatively younger population at 27% (i.e. ratio of aged population vs working-age population)
Shifts in Population Pyramids
Developed Nations
Less-developed Nations
Old-age Dependency Ratios in Global Regions
Trend 1: Ageing World Populace Results in Signific ant Shifts in Global Demographic Profiles…
Source: UN 2007
Source: UN 2007
Trend 2: Rising Global Healthcare Costs Expected to Continue in Coming Years Albeit at Lower Growth rate
2010- Medical Costs in 95% of
Countries Exceeded Inflation
• Two most significant factors driving Healthcare costs increase are new medical technologies and the overuse of care.
• Expectations of medical cost trend over the next 5 years
Upwards Costs Trend Expected Major Factors Driving Medical Costs
Source: Towers Watson Global Medical Trends Survey of Health Insurers 2010
• Significant factors driving medical costs per person
Source: Towers Watson Global Medical Trends Survey of Health Insurers 2010
Trend 3: Unequal Distribution of Healthcare Capabil ities from Developed to Emerging Nations..
Gaps Emerging in Healthcare
Capabilities Across the Globe
• Developed nations confronted with demands on public pension & healthcare; emerging nations faces under-developed health insurance & shortage of trained healthworkers
Access to Medications & Technology Structural Shortfall -Trained Health Workers
Advanced drugs treatment beyond reach of poorer healthcare systems-
substitute generics with poorer efficacy. However major drug patents
expiring 2015
Expensive modern diagnostic systems unavailable to most nations
• Structural mismatch- emerging nations with young populace but lacked trained talent vs developed nations faced w limited workforce
Source: WEF Report 2010
Detailed Agenda of Report
9
Section One- Challenges Facing Global Healthcare
� Global Healthcare Faces Pressure from Triple Conver gence � Trend 1 : Ageing World Populace � Trend 2: Rising Global Healthcare Costs � Trend 3: Unequal Distribution of Healthcare Capabil ities
� Multiple Impact on Global Healthcare � Impact 1: Nature of Services � Impact 2: Global Healthcare Industry � Impact 3: Healthcare Industry Sectors
� Healthcare Spending: Large Differences, Unequal Res ults � Case Study: US Healthcare System
� Rise of Healthcare Consumers
Provides background to key forces challenging globa l healthcare
Impacting National Systems to Private
Healthcare Providers
• Driving increased National Healthcare spending and changes in healthcare service demands & delivery
Multiple Impact Across Global Healthcare Value Chai n – from Public Health Systems to Healthcare Industry
Convergence of
TripleTrends
• • - Increased GDP allocation to national healthcare
• - Drive for system integration •
• - Changes in demand for healthcare services • - Shift in provision of healthcare services
• - Geographic shift in location of healthcare players • - Consolidation/growth in different healthcare
sectors
Public Healthcare Systems
Global Healthcare
Industry
Healthcare Industry Sectors
Increased share Of GDP Allocation to Healthcare Across
Nations
• Developed economies will see 30%-50% increase in Healthcare’s share of GDP by 2050; Emerging countries similarly spending significant sums to build national systems
Impact 1: Public Healthcare Systems Allocated Incre ased Budget and are Focused on Integration
Increased Public Spending on Healthcare Integration of Healthcare Delivery
• Projected Increase in Public Spending on Healthcare in Developed Nations in 2050
Source: World Economic Forum -Pensions & Healthcare 2030 Scenario Report
• Priority more for developed nations rather than emerging healthcare systems
Source: KPMG Report 2010
Burden of Chronic Diseases
due to Aged Populace
• Major Chronic diseases that now accounts for 60% of all deaths & 43% of global disease burden will rise to 73% and 60% respectively by 2020
Impact 2A: Global Healthcare Industry Faces Changes in Nature of Services Required
Top 3 Upcoming Chronic Diseases Change in Kind of Healthcare Required
• Top 3 conditions causing highest prevalence of claims over next 5 years
Source: Towers Watson Global Medical Trends Survey of Healthcare Insurers 2010
Treatment of upcoming Chronic diseases i.e. cancer, cardio is expensive & requires
new medical resources, higher cost medication, etc
Shift from acute care to a “continuum of care” as mortality rates improves and
patients suffering from chronic diseases require extensive hospital care
Advances in Technology & Devices Shifts
Service Provision
• Advancements in wireless, device technology allows patients to enjoy in-home monitoring supported by a call service center or online communications platform
Impact 2B: Global Healthcare Industry Faces Shifts in the Provision of Services
mHealth Potentially Disruptive In-Home Monitoring/ Online Healthcare
• With the growth of smartphones and availability of connected devices , an era of eHealth or mHealth is emerging – “provision of health services and information vis mobile technologies”
• In-home monitoring provides best of both worlds: comfort of staying home with security of daily monitoring and proper medical attention. Allows preventive care & reduces emergencies.
Increasing Demand from Asia Driving Focus of Global
Healthcare MNCs
• China expected to become 2nd largest Pharma market by 2015 with market valued at US$103 billion; also significant increase in new drug R&D
Impact 3: Global Healthcare Industry Focuses on Gro wth in Asia
Healthcare Reforms & Investments Migration of Global R&D
• RMB 850 billion investment to improve healthcare delivery infrastructure- drives demand for medical devices & systems
• China’s CRO Market forecast to grow significantly
Source: MOH Source: Goldman Sachs; Healthcare CROs
Detailed Agenda of Report
15
Section One- Challenges Facing Global Healthcare
� Global Healthcare Faces Pressure from Triple Conver gence � Trend 1 : Ageing World Populace � Trend 2: Rising Global Healthcare Costs � Trend 3: Unequal Distribution of Healthcare Capabil ities
� Multiple Impact on Global Healthcare � Impact 1: Nature of Services � Impact 2: Global Healthcare Industry � Impact 3: Healthcare Industry Sectors
� Healthcare Spending: Large Differences, Unequal Res ults � Case Study: US Healthcare System
� Rise of Healthcare Consumers
Provides background to key forces challenging globa l healthcare
Healthcare Spending – Large Differences but Unequal Results
Higher Spending on Healthcare does not necessarily prolong
lives
• Exposes inefficiencies in respective nation’s healthcare spending and policies; additional spend has opportunity to be better allocated for improved services
Healthcare Spend vs Life Expectancy
81 81 76 80 79 73 78 80 80 78
• Based on 2007 OECD Health spend Data: Comparison of per capita healthcare
Life Expectancy In Years
Case Study: US Healthcare Costs Breakdown Shows Ex cessive Spend on Out-patient care, Admin and Medical Goods. .
US per capita Healthcare cost 2X Compared to
Developed Nations
• Reduction of US Healthcare costs…
Analysis of US and Selective Developed Nations 2007 Healthcare Cost Breakdown
Source: OECD and CIA factbook
Breakdown into 3 Major Healthcare Cost Components
Detailed Agenda of Report
18
Section One- Challenges Facing Global Healthcare
� Global Healthcare Faces Pressure from Triple Conver gence � Trend 1 : Ageing World Populace � Trend 2: Rising Global Healthcare Costs � Trend 3: Unequal Distribution of Healthcare Capabil ities
� Multiple Impact on Global Healthcare � Impact 1: Nature of Services � Impact 2: Global Healthcare Industry � Impact 3: Healthcare Industry Sectors
� Healthcare Spending: Large Differences, Unequal Res ults � Case Study: US Healthcare System
� Rise of Healthcare Consumers
Provides background to key forces challenging globa l healthcare
Consumers Increasing Desire to Manage Healthcare
Needs
• Consumers in Developed Nations Seeking Information, Comparing Services & Increasingly Willing to Travel to seek Lower-cost or Higher quality Healthcare
Rise of Healthcare Consumers Open New Opportunities and Non-Conventional Approaches to Meeting Healthcare Need s..
Access to Information for
Decision
Tools & Services to
Manage
Embrace Non-
traditional. Options
Future “Savvy”
Healthcare Consumers
Consumers want access to info from hospitals, doctors and health plans; to better understand providers and
pricing for healthcare service
Consumers use tools that can provide personalized
recommendations for improving health & disease management
Consumers interested in home or self-monitoring devices; alternative
treatment regimes i.e. TCM; travel to seek better healthcare
• Online medical database • Online scheduling • Doctor-patient X-change platform
• Online healthcare programs • Nurse call lines • Online claims management
• Home Monitoring Devices • Homecare network • Medical Tourism
Consumer Objectives New Services
Framework of Report
20
Provide Overview & Key Logic of Report Leading to Options
Section One- Challenges Facing Global Healthcare
Section Two- Future Scenarios for Asia’s Healthcare Industry
Section Three- Assessing Partnership Opportunities
21
Detailed Agenda of Report
22
Section Two- Future Scenarios for Asia’s Healthcare Industry
� Healthcare in Asia at Unique Cross-road � Ideal Conditions to Build World-class Healthcare In dustry
� Condition (1): Young Populace � Condition (2): Strong Private-Public Collaboration � Condition (3): Increasing Healthcare Demand
� Asia’s Role in a Globally Integrated Healthcare Sys tem � Scenario (1): R & D � Scenario (2): Healthcare Service Delivery
� Asia- the World’s Largest Medical Tourism Destinati on � Drivers of Outbound Medical Tourism � Fundamental Factors Favoring Growth
Layout scenarios for healthcare in Asia due to glob al changes
Opportunity for Asia to Leverage on Global Healthcare
System
• Healthcare in Asia to grow from low-base and can leverage on Global Healthcare partnerships to build world-class healthcare services
Healthcare in Asia at Unique Crossroads – Leverage Global to be World-class
Characteristics of Healthcare in Asia
Young Populace & Low Old-age Dependency
Relatively Low Demand for Expensive Healthcare
Poor Healthcare Insurance & Provider Coverage
Low-tech Medical Equipment & Generic Drugs
Global Healthcare Partnership Opportunity
Increasingly Wealthy Asian
Populace Demand Better Healthcare
Detailed Agenda of Report
24
Section Two- Future Scenarios for Asia’s Healthcare Industry
� Healthcare in Asia at Unique Cross-road � Ideal Conditions to Build World-class Healthcare In dustry
� Condition (1): Young Populace � Condition (2): Strong Private-Public Collaboration � Condition (3): Increasing Healthcare Demand
� Asia’s Role in a Globally Integrated Healthcare Sys tem � Scenario (1): R & D � Scenario (2): Healthcare Service Delivery
� Asia- the World’s Largest Medical Tourism Destinati on � Drivers of Outbound Medical Tourism � Fundamental Factors Favoring Growth
Layout scenarios for healthcare in Asia due to glob al changes
Young Populace Provides Talent Pool
For Healthcare Workforce
• As developed nations face a shrinking and increasingly costly workforce, the young populace in Asia offers an alternative source of trained healthcare workforce
Ideal Conditions to Build World-class Service (1) – Young Populace Provides Pool for Healthcare Workforce
Transforming Asia’s Talent Pool
• Pool for Medical Professionals- Doctors + Nurses
(Philippines & Indonesia already provide pool of trained nurses; Singapore, Malaysia & HK have strong medical talent pool)
Partnerships with Nursing Institutes
• Pool for Medical Equipment Operators; medical researchers
Global Medical Facilities Collaborate w Local Institutes
Global Healthcare MNCs invest in training
• Pool for Outsourced Medical Admin & Services- Call-centers; database admin
(India & Philippines already building significant pool)
Global Pharma’s outsourced R&D
Govts in SE Asia Investing heavily in
Healthcare Infrastructure
• Following Govt investments; Private sector players have also committed significant capital expenditure to the overall healthcare service infrastructure
Ideal Conditions to Build World-class Service (2) – Strong Public-Private Collaboration
Private Sector Healthcare Investment Key driver is impending
liberalisation of services sector by 2015 under ASEAN agreement
Private hospitals across region diversifying service portfolio to
offer broader healthcare services
Presence of several large healthcare groups- Parkway (SG),
Bangkok Dusit (TH), Sunway Medical (MY)
Source: WHO 2010
SE Asian Governments records the highest private healthcare expenditure of any region at 63% of total health expenditure
Strong Demand Driving
Improvements to Service
• Increasingly discerning domestic consumers and need to cater to global consumers due to medical tourism driving providers to innovate in order to position as world-class providers
Ideal Conditions to Build World-class Service (3) – Strong Healthcare Demand
Medical Tourism by Country 2009 Medical Industry contributes over
US$80billion to Singapore GDP and is a significant service sector
Thailand’s medical tourism generates US$940million and
continues to grow strongly
Other SE Asian countries Malaysia and Vietnam are targeting to grow
this sector
Source: Deloitte, Josef Woodman Oct 2009
Five Countries Most Visited for Medical Treatments
Detailed Agenda of Report
28
Section Two- Future Scenarios for Asia’s Healthcare Industry
� Healthcare in Asia at Unique Cross-road � Ideal Conditions to Build World-class Healthcare In dustry
� Condition (1): Young Populace � Condition (2): Strong Private-Public Collaboration � Condition (3): Increasing Healthcare Demand
� Asia’s Role in a Globally Integrated Healthcare Sys tem � Scenario (1): R & D � Scenario (2): Healthcare Service Delivery
� Asia- the World’s Largest Medical Tourism Destinati on � Drivers of Outbound Medical Tourism � Fundamental Factors Favoring Growth
Layout scenarios for healthcare in Asia due to glob al changes
Asia’s Role in a Globally Integrated Healthcare Sys tem – R&D 2050
Asia- Hub for R&D Outsourcing +
Medical Device Production
• R&D includes drug development as well as production of medical devices & IT systems; with majority of activities focused in Asia where manpower/production costs are low
Identify Drug Tgts
Identify Drug Tgts
Drug Discovery
Identify Drug Tgts
PreClin+ Clinical
Med. Device R&D
Med. Device R&D
Med. Device R&D
Healthcare IT software
Healthcare IT software
Healthcare IT software
Drug Discovery
US EU CHINA
INDIA
Healthcare IT software
Med. Device Production
PreClin+ Clinical
Asia’s Role in a Globally Integrated Healthcare Sys tem – Service Delivery 2050
Asia – Hub for Selective Surgery+
Aged Hospice Care+ Service Support
• Network covers Admin, Database Mgt, Service Centers Comms with Medical experts, Outpatient and in-patient care; Asia focus on In-patient care & aged Hospice services
Comms Plt w Medical Experts
US EU ASIA
INDIA Online
Healthcare Program
Call Center Support
In-Patient Care
(Medical Tourism)
Aged Hospice Service
(Retirement Homes)
Comms Plt w Medical Experts
Online Healthcare Program
Home-based Health
Monitoring
Emergency Service Centers
In-Patient/ Out-Patient care
*
*
Online Medical Database
Detailed Agenda of Report
31
Section Two- Future Scenarios for Asia’s Healthcare Industry
� Healthcare in Asia at Unique Cross-road � Ideal Conditions to Build World-class Healthcare In dustry
� Condition (1): Young Populace � Condition (2): Strong Private-Public Collaboration � Condition (3): Increasing Healthcare Demand
� Asia’s Role in a Globally Integrated Healthcare Sys tem � Scenario (1): R & D � Scenario (2): Healthcare Service Delivery
� Asia- the World’s Largest Medical Tourism Destinati on � Drivers of Outbound Medical Tourism � Fundamental Factors Favoring Growth
Layout scenarios for healthcare in Asia due to glob al changes
Asia- World’s Largest Medical Tourism Destination
Potential Global Medical Tourism Market of US$100
billion in 2010
• Asia well-positioned to continue on strong growth projections in the market- as even more Asian-based destinations enter the market i.e. China, Vietnam, Taiwan
*
Partnerships with Leading US-based
Medical Institutions
Profiles of Leading Asian Healthcare
Providers
Consumers Travel to Seek Lower Cost + Quality & Safe
Healthcare
• Industry initially driven by high cost of healthcare in the US and Outbound US Tourists; Demand from regional countries increasingly important
Medical Tourism in Asia- Drivers of Outbound Medica l Tourism
Comparative Costs for Selected Surgeries
Source: American Medical Association
Costs in Asia are significantly lower than the US
Outbound Travellers to Asia for Medical
UK Inefficient domestic healthcare service and introduction of medical tourism insurance
driving growth. Preferred destination: India
US Seeking lower cost healthcare, over 750K US residents travel annually for medical tourism.
Preferred destination: Thailand
Within Asia Regional travellers taking advantage of cheap flights and higher quality service-
Indonesians, Chinese, Japanese
Asia has Strong Foundations to
Support Medical Tourism Growth
• Strong mix of medical destinations and development of overall tourism infrastructure to support medical tourism growth; offers combination of medical + holiday
Medical Tourism in Asia- Fundamental Factors Favors Growth
Fundamental Factors Strength of Leading Destinations
Thailand Pioneer & leader industry leader with established reputation. In 2009; 1.4 M
medical tourists generating US$2 billion
Singapore Over 600K medical tourists generating
US$1.4billion with reputation for high quality and advanced care
India & Malaysia Emerging with over 450K & 300K tourists
respectively. Attractive to regional consumers
High Quality of Service Associated with Asian Culture
Attractive Holiday environment- for Post-surgery Recovery
Availability of Alternative Medicine/Treatment
Framework of Report
35
Describe framework and criteria in assessing opport unities
Section One- Challenges Facing Global Healthcare
Section Two- Future Scenarios for Asia’s Healthcare Industry
Section Three- Assessing Partnership Opportunities
36
Detailed Agenda of Report
37
Section Three- Assessing Partnership Opportunities
� Framework and Criteria for Assessing Partnership Op portunity � Criterion for Screening Healthcare Cluster
� Ranking of Potential Healthcare Cluster Opportunity � Recommendations for Shortlisted
Describe framework and criteria in assessing oppor tunities
Framework and Criteria for Assessing Target Sites for Partnership Opportunity
Opportunities will Undergo Two
Levels of Screenings
• Screened to ensure Opportunities meet Healthcare Cluster as well as Eco-city Development Criteria before Financial Modeling for Investment Return
Shortlist HC Sites
Potential Healthcare
Cluster Sites
HC+ Eco Ready Sites
Screened for Healthcare
Cluster Criteria
Screened for Eco-City Criteria
Screened for Investment
Return
* In this paper screening for this criterion list shall only be done at the Country level.
Potential
Opportunities
Criterion for Screening Healthcare Cluster Capabili ties for Target Site
Healthcare Cluster as the Core
Economic Theme
• Healthcare Services as the Core Cluster must drive sufficient economic activity to support & sustain the development of an integrated urban city
Healthcare Cluster Components
Criterion for Screening Healthcare Cluster Capabili ties for Target Site
Criteria Assessed Capabilities Govt Public HC Funding L M H HH
Supporting Policies L M H HH
HC Insurance Coverage L M H HH
External Assistance (NGO) L M H HH
Regulatory L M H HH
HC Industry Market Value L M H HH
Growth L M H HH
HC Technology Platform L M H HH
HC Delivery Infra L M H HH
HC Comp Competitiveness L M H HH
HC Supply Chain L M H HH
HC R&D L M H HH
HC Workforce L M H HH
Global Interaction L M H HH
HC Investors
Private HC Funding L M H HH
Foreign Investments L M H HH
HC Consumers
Per capita spend L M H HH
Demand for HC L M H HH
Supporting Education & Training L M H HH
HC Financing L M H HH
HH- World-class
Detailed Agenda of Report
41
Section Three- Assessing Partnership Opportunities
� Framework and Criteria for Assessing Partnership Op portunity � Criterion for Screening Healthcare Cluster
� Ranking of Potential Healthcare Cluster Opportunity � Summary of Market Opportunity for Healthcare Sector s
� Recommendations for Shortlisted
Describe framework and criteria in assessing opport unities
Summary of Assessment of Healthcare Sectors
Healthcare Sectors
Govt HC Industry
HC Competitive
HC Consumer
HC Investor
Support Svcs
M HH HH H H H
Vietnam M M M M H H
Malaysia H H HH M H H
Thailand H HH HH H H H
India M M H M H H
Ranking of Potential Healthcare Opportunities- (1) China (2) Thailand (3) Malaysia (4) Vietnam
Country Govt HC Industry
HC Competitive
HC Consumer
HC Investor
Support Svcs
China M HH HH H H H
Vietnam M M M M H H
Malaysia H H HH M H H
Thailand H HH HH H H H
India M M H M H H
Detailed Agenda of Report
44
Section Three- Assessing Partnership Opportunities
� Framework and Criteria for Assessing Partnership Op portunity � Criterion for Screening Healthcare Cluster
� Ranking of Potential Healthcare Cluster Opportunity � Recommendations for Shortlisted
Describe framework and criteria in assessing opport unities
Recommended Shortlist for Consideration
Project Must Also Consider What
Value-add Partner Brings
• Re-matching Market Opportunity with Potential Value-add results in a Adjusted Ranked Recommended List
Country Market Opportunity
Ranked
Final Ranking with input
China 1 1
Vietnam 4 2
Malaysia 3 3
Thailand 2 4
China Offers Opportunity to Create a World-class He alth Services Cluster and Aged Care Community
Leverage on China’s Competitive Strengths to Create World-class Cluster
• Partner can bring Global biotech+healthcare management , IT strengths to play to create China’s most advanced health delivery infrastructure & care services
Create China’s first World-class Health Delivery Service Hub
Zhuhai
Hainan
Site Preferred Location to Tap on Access to Global Medical Tourism- Zhuhai/Hainan
Access to Univ. or Cluster Must Collaborate w Global Medical Institutions to create R&D Hub
Build advanced Hospital care facilities leveraging e-health technologies – target
treatment of chronic diseases
Create environment for high-end aged care homes and wellness care facilities