Weekly notes – Week 41: healthcare services grow and prosper in Asia
Sitra has been an active player in the reform of healthcare for many years. The Asian healthcare market is driven by rapid population growth and a booming middle class. This market area might prove to be essential to Finland, says Teppo Turkki, reporting from the Healthcare World Asia 2014 conference in Singapore.
This autumn, Sitra and the Finnish Funding Agency for Innovation Tekes aligned their foresight work focusing on Asia. The co-operation covers Sitra’s strategic research and monitoring project focusing on East Asia and Future Watch, a foresight project led by Tekes. One of the key focus areas involves collecting foresight information on healthcare and digital well-being and monitoring the Asian healthcare sector.
The working hypothesis is that marrying the healthcare and well-being sector with rapidly evolving digital technology and ICT will potentially create a new source of economic growth and innovation for Finland – and maybe even a new global line of business. If this happens, the Asian healthcare and well-being markets might prove to be essential to Finland.
The current driving forces of the Asian healthcare market are the area’s rapid population growth and booming middle class. The current number of Asian consumers belonging to the middle class has already exceeded 500 million. The number is expected to reach 1.75 billion in the next seven years – a growth of three and a half times today’s number in under a decade.
The health and well-being sectors in the Asia-Pacific region are growing rapidly, and will continue to do so well into the 2020s. The factors guiding healthcare development include strong economic growth, fast-paced urbanisation and the emergence of new metropolitan areas with millions of residents. Changes are the result of the new dietary and consumption habits of Asians living in cities, and the effects of a Western-style diet on the incidence of diseases associated with the standard of living (such as diabetes, cardiovascular diseases, obesity and cancer).
Other major factors affecting the demand for healthcare and well-being services are the rapidly ageing societies – in East Asia in particular – and the needs of these older age groups. The middle class and elderly people are nowadays more knowledgeable about issues regarding their health and well-being and know how to express their wishes. This also applies to the knowledge of the services on offer, and has resulted in rising demand for higher quality healthcare services.
The financing models for healthcare and related new services in East and South East Asia are also changing: governments are investing in the creation of a publicly funded universal health insurance system. The healthcare sector is beginning to attract private investors and global healthcare companies. Rapidly developing private hospital and healthcare networks are believed to expedite the building and financing of the primary healthcare infrastructure.
It is also interesting to watch how quickly health tourism grows in Asia. Countries that offer services for health tourists (such as Singapore, Thailand, India, Malaysia and Taiwan) have noticed how health tourism has improved their own healthcare services and their capacity to treat a wide range of diseases of varying severity. Health tourism is strengthening and diversifying the services available at healthcare centres and hospitals in general, as well as the quality of treatment.
The markets created by health tourism have also significantly increased their economic and business value: the total global value of health tourism is expected to exceed USD 10 billion in 2014. In the next five years, that figure is likely to more than triple, to USD 32.5 billion (KPMG, 2014). Health tourism will be a strong growth industry and a lucrative investment target both internationally and locally. Investors already have their eye on China’s vast healthcare market, for example.
With people’s awareness of cross-border healthcare and well-being services increasing around the world, and with better access to complicated and expensive medical procedures at affordable prices that do not compromise on quality within these ageing societies, the health tourism boom is set to continue in the future.