6 Sept 2017
Clean Bill of Health
Despite global political uncertainties and a sluggish economic outlook, US business consultancy Frost & Sullivan predicts a massive increase in healthcare spending across the Asia-Pacific. In 2017, the region is expected to account for 30 per cent of total global spending in the sector, while still recording an annual growth rate of eight per cent – almost double the global average of 4.8 per cent.
Overall, Asia-Pacific healthcare spending is expected to top US$510.7 billion in 2017, up from US$472.5 billion in 2016. In value terms, this makes it second only to North America.
Speaking at the Asia Health event in Singapore, Rhenu Bhuller, Senior Vice-President of Frost & Sullivan's Healthcare division, said that several tech giants, including Apple, Google and IBM, have begun to seriously invest in opportunities they see in healthcare.
"Overall, it is clear that record amounts will be spent on healthcare. This is especially the case in Asia, where ageing populations, growing populations, increasing wealth and the increasing incidence of non-communicable illnesses are driving the sector. Many new technologies, notably digitisation and telemedicine, are also attracting considerable investment.
"Above all, though, the customer – who we once called 'the patient' – is now armed with more information than ever before. As a result, they are now calling the shots as to what treatment they are willing to receive, and where," Ms Bhuller said.
Highlighting the role digital technology is likely to play in the healthcare sector, she said: "The increasing trend for healthcare consumerism will ensure solid growth for wearables and homecare devices. We will also see robot-assisted surgery devices and related systems being fast-tracked. Similarly, there will be an increase in the number of medical devices designed to slow or prevent the onset of chronic or degenerative diseases. Today, 39 per cent of all medical devices come from the US and that dominance is likely to remain over the long-term."
Despite the United States’ technological supremacy, Fredrik Nyberg, Chief Executive of the Asia-Pacific Medical Technology Association, the Singapore-headquartered body that represents suppliers and manufacturers of medical equipment across the region, sees the local market as having the most potential. Looking to the future, he predicted that "by 2020, the Asia-Pacific medical-device market will be bigger than its European counterpart and will be worth US$128-US$133 billion. Accounting for 24 per cent of the global market, it will be the second-largest component, though still dwarfed by North America's 42 per cent.
"In 2015, though, the local medical-devices market represented only 22 per cent of the global spend. This saw it seriously underrepresented in terms of GDP (32% of the global total), population (51%), chronic disease burden (52%) and citizens ages 50 or above (59%). The potential for growth is, therefore, enormous and all the more so as the Asia-Pacific share across all of these four categories is certain to expand."
Mr Nyberg cautioned that the Asia-Pacific is very heterogeneous compared to North America or Europe, with multiple socio-economic segments frequently found within the same country. Other factors likely to have a significant impact were the increasingly more cost-effective solutions sought by many governments, the diverse nature of the existing infrastructure, and the evolving nature of the regulatory framework across the region. Above all, he emphasised that competition in the sector is likely to grow intense, with China alone having licensed some 15,000 medical-device companies.
The Indian healthcare market is currently worth about US$100 billion, according to Tiger Tang, founder of Singapore based healthcare consultancy Tangbridge Think-Tank. “By 2020, with its compound annual growth rate (CAGR) of 23 per cent, its value will be in the region of $280 billion. In the same year, it is expected that the Singaporean market will be worth $13 billion, while Malaysia will account for a further $20 billion. Among the other markets enjoying rapid growth are Thailand and Indonesia, with CAGRs of 16 per cent and 12 per cent, respectively.”
Mr Tang noted that in 2015, China spent $60 billion on healthcare, some 6.2 per cent of its GDP. “This figure isn't likely to fall. Every year in China, there are 4.2 million new cancer cases, while the country is also home to one in four of the world's diabetics as well as those with cardiovascular disease. By 2025, more than 300 million Chinese citizens will be aged 60 or above. In light of this, it should be no surprise that the Chinese healthcare market is on course to be worth US$2.62 trillion by 2030.”
He added that preventive healthcare is among China’s priorities, with 38 cities and districts designated last November as pilot “healthy cities,” with the provision of a healthy environment one of the key aims of the initiative.
The coming “global silver tsunami," according to Professor Heung Bong Cha, the President of the International Association of Gerontology and Geriatrics, means that by 2050, there will be two billion elderly people – a 10-fold increase in just 100 years.
"Today, only one country – Japan – has an aged population in excess of 30 per cent,” said Professor Heung. “By 2050, 64 other countries will be in the same situation. Although it is mostly the more developed countries that will be affected, a number of the developing countries, including China and most of Southeast Asia, will see some 20 to 29 per cent of their populations aged 60 or above. As this is roughly double their current percentage, these countries will be hit very hard.
"Meeting the needs of these ageing populations will present enormous social, economic and cultural challenges to individuals, families and societies, as well as to the global community as a whole. The elderly will make heavy demands on healthcare and, given their increasing affluence, they will also demand anti-ageing treatments, while expecting a high quality of life to the very end. As a result, we are looking at a future where healthcare may well be the primary economic driver."
In Asia, problems specific to the region include the lack of medical infrastructure, particularly in such places as Indonesia. “Typically, there may be three or four times the number of patients who need treatment, but there are acute shortfalls in terms of infrastructure, technology and the availability of properly-trained personnel. This is particularly the case in many of the more rural areas,” said Rebecca Samuel, Director of Consulting for ICME Healthcare Asia, a Zurich-headquartered healthcare consultancy.
"Tackling many of these issues will require a shift towards new healthcare models, ones that look beyond the traditional hospital-centric, acute-care approach. Basically, we need to restructure around the patient and not the hospital. The road ahead will require a change of mindset on the part of healthcare stakeholders, as well as changes in regulatory frameworks. We will also need to bridge the current knowledge gap that characterises many healthcare professionals and managers."
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