ASEAN is a diverse region with member countries having different economic, social, cultural, infrastructural and political characteristics. Healthcare response, policies, resources and infrastructure are defined by the characteristics of each member country and the state of the country’s economic development. Therefore, healthcare is at varying levels, standards and quality across the region.

In the region, the highest spend per capita on healthcare is Singapore, followed by Malaysia and Thailand. The higher-income countries are ahead in terms of allocation of resources, availability of medical talent, access to healthcare and quality of care. The healthcare systems in these countries are also compared to the quality of healthcare in the US and UK. High standards and quality of healthcare have also led to a growing healthcare travel industry in the region.

The healthcare divide is, thus, prominent. Countries like Lao PDR, Cambodia and Myanmar are severely resource strapped and unable to respond to healthcare needs locally. For instance, for every 1,000 of its population, less than one doctor and nurse are available and there are less than 10 hospital beds for every 1,000 people. Even middle income countries within ASEAN such as Vietnam and Indonesia, with huge population, are barely covering health needs. Indonesia with a population of 240 million, experienced a deficit in doctors and hospital beds, with less than 1 doctor per 1,000 people and less than 10 beds per 1,000 people. Vietnam, with a population of 89 million, has less than 1 nurse per 1,000 people.

Evolving healthcare landscape
The healthcare landscape is fast evolving, driven by socio-economic and demographic shifts. Demand for healthcare in ASEAN outstrips supply. With a 600 million population, the growing affluence, more people entering the middle class and an increasing aging population, the base healthcare spend will be on the rise. The region will be under pressure to find solutions.

1.  Economic growth
The increasing affluence and a growing middle class will lead to a transition towards an increase in discretionary, tertiary and lifestyle related healthcare. Cardiovascular diseases, cancer, diabetes, and cholesterol, among others, are expected to rise. Likewise, the demand for diagnosis, in-house and outpatient treatments in hospitals, are expected to increase.

2. Demographic shifts By 2030, more than 10% of population will exceed 65 years old, double the current base. Ageing populations and longer life expectancy rates will also intensify the burden on healthcare costs. This will be more pronounced for developed ASEAN countries even if their healthcare systems are well resourced as an increasing aging population base will cause a strain on public healthcare spending.

Barriers to Integration and Issues
Healthcare is different from other industries, in that there is a commercial and a public welfare side to healthcare that lead to various non-trade related barriers, making integration of the healthcare sector in ASEAN a challenge. The opening up of ASEAN healthcare markets will not necessary mean immediate and increased intra-ASEAN investments in healthcare. This can only happen when national level public healthcare developments and reforms are made in areas such as policy, infrastructure, economic, labour, and socio-cultural.

1. Economic Barriers
Healthcare funding
Countries will have to spend more on healthcare. While healthcare spending is between 2000 and 2010 was on the rise, all ASEAN members face challenges allocating healthcare funding on par with the global average of 9% of GDP. Member states are at different levels of economic development and this reflects on funding for healthcare, Singapore’s per capita healthcare spend for instance is the highest, more than six times that of Malaysia (which is the second highest) and more than 100 times more than Myanmar. Distribution of funding on healthcare will remain disparate within ASEAN because the economic conditions of member states are different.

Similarly, healthcare financing schemes in ASEAN are also varied; some countries do not have any financial schemes. Less developed member countries are limited by resources allocated for healthcare and therefore, many of these countries have populations that have to take on healthcare costs on their own. Entrance of investments from foreign players will not likely take place unless the national level economic conditions and healthcare sector becomes a more viable market.

2. Labour barriers
Shortage and Mobility of talent
A shortage of medical personnel and limited access to know-how are apparent. This will present a critical challenge to regional integration. Talent will continue to move to jobs with better compensation and opportunities. This could happen internally within countries where medical jobs are moving to the city where private healthcare providers are setting up or abroad, causing a brain drain in the medical sector. Middle and high income countries in ASEAN are facing a shortage of talent and are losing manpower to these internal and outbound migration opportunities.

Most ASEAN doctors are generalist and the medical profession in the region will have to move up the ladder into subspecialisation to deal with trends in healthcare problems. A growing segment of the population are looking for niche and tertiary care; rising affluence will mean that this will continue to be a trend in ASEAN. Plans for training, re-training and raising the standards and proficiency levels of medical personnel in the region will be key in ensuring adequate access to healthcare. For less developed countries, lack of access to training facilities and infrastructure, limit their ability to raise the standards of national level healthcare.

3. Infrastructure
Development of infrastructure within ASEAN member countries remain largely imbalanced. Roads, ports, airports, internet penetration, ICT and infrastructure will not only determine the ability to provide adequate healthcare, raise standards of healthcare and quality of care nationally but will also determine its attractiveness to talent and regional healthcare investment.

4. Socio-cultural
Cross country integration within ASEAN will also be limited by diversity in language and cross-culture gaps within the regions. Language barriers, for instance, will limit cross border movement of trained medical professionals.

5. Policy barriers
Immigration and access to medicines
Beyond addressing the complex and challenging economic competitiveness, infrastructure, labour and cross-cultural barriers, each country within ASEAN will have to address outright policy barriers with implications on a regional economy.

At a national level, the movement of foreign patients within ASEAN are restricted. Immigration laws do not provide preferential treatment for medical travellers. Access to medicines and drug approval processes within the region lack integration. For example, while the vaccination of cervical cancer is universal in the Philippines, this is not the case with many countries within the region. The differing approval process for drugs also make speed to market highly fragmented.

6. Medical Tourism
Affluence within the region and with this, more patients seeking better healthcare and medical services, have brought about growth in medical tourism. Singapore, Malaysia and Thailand have developed competitive advantages and are the region’s leading exporters of healthcare services. However, only 2% of ASEAN patients can afford to travel for better healthcare services within the region. While health tourism will remain an interesting revenue proposition, member countries will have to ensure better healthcare for the remaining 98% of the patients.

If countries are using only 1-2% of their resources for medical tourism, with upsides in gaining returning talent to serve locally and increased funds coming into the country, then health tourism will continue to have an interesting revenue proposition. The backlash only arises if medical resources are only concentrated on foreign or medical tourists at the expense of local population healthcare. This must be watched. How member countries minimise the impact of health tourism on local populations will be key to avoiding any potential backlash from growing healthcare tourism.

The road towards AEC provides an impetus to explore possibilities in addressing healthcare disparities between the rich and poorer countries in ASEAN. Together, public private partnerships within the region could lead to collaborations that could leverage on technical expertise, cross country training and mobility of resources to assist less-developed member countries raise standards, capabilities and capacity of the local healthcare eco-systems.

Countries will need to be realistic about what can be achieved by 2015. As a principle, regional integration in healthcare can only take place when national level healthcare inadequacies are effectively dealt with.

Having said that, here are some realistic goals that member countries can focus on:

  1. Speed to market for medicine – ASEAN should aim to harmonise the approval process for drugs at a regional level. This integration especially for diseases that are similar in nature will enhance the speed to market for medicine. The EU drug approval process could be used as a model.
  2. Medical tourism – In this aspect, ASEAN countries need not take patients, doctors and nurses beyond borders. Market forces will influence this; the majority of medical tourists are intra-ASEAN and represent only 2% of patients. Patients who are affluent will naturally seek out better healthcare services within the region while doctors and nurses will be drawn by better compensation and opportunities. However, an “ideas beyond borders” approach will be most beneficial at this stage.

What should and could be implemented by 2015 are regulations and policies that allow for:

  1. Cross boarder technical training, education and capacity building. Expertise across borders should include not only medical professionals but also ICT, operation and administrative expertise within ASEAN to help health sectors that are lagging.
  2. Facilitation of greater knowledge exchange within the healthcare sector.
  3. Greater allowances for FDI in healthcare services.
  4. Visas for medical tourists; countries can promote easier visa processing for healthcare travellers regionally.


3. The quality and availability of physicians
Each country must fix its local healthcare needs and physician training first before opening up. It will be difficult to promote the opening up of the sector if the national healthcare eco systems do not allow for the building up of a competent and sufficient physician base. 4. ASEAN members should support the development of healthcare to levels and standards that are acceptable within ASEAN and outside of the region.

5. Regulations to allow for better distribution of medical equipment and resources
Private owners of medical resources and equipment could be tapped on to supply the equipment and resources to the public sector healthcare providers at a lower cost. This will increase distribution as well as access to medical equipment and resources especially in less developed areas.

Sector Champion

Dr. Lim Cheok Peng,
Managing Director, IHH Healthcare

Kenneth Mays,
Senior Director of Marketing, Bumrungrad International Limited

Research Partner
Dr. Julian Sham, Senior Manager and Clinical Lead, Accenture’s Health & Public Service practice
Dr. Penny O’Hara, Partner, Health Analytics (Asia Pacific), Accenture

Dr. Penny O’Hara, Partner, Health Analytics (Asia Pacific), Accenture

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