Bright future ahead for private health care sector

VOV.VN - Amid dissatisfaction with the underperforming and underfunded public health care sector, Vietnam’s private health care sector is set to see significant growth in the years ahead, according to a market research source.

bright future ahead for private health care sector hinh 0
 Health care is increasingly becoming a national priority.

Booming private hospital market

The research service provider Fitch Solutions Macro Research stated in a recently-released commentary that Vietnam’s private health care sector is undergoing a period of rapid expansion. The long-term rise of household incomes will also provide a boon for private hospitals which generate a substantial amount of their revenues from out-of-pocket payments.

The paper indicated that the number of private hospitals has more than quadrupled to 170 over the past decade whilst an additional 200 investment projects in hospitals have been approved. The Vietnamese government also wants to develop the private health care sector, with a view of having privately-owned hospitals account for 20% of the total number of nationwide hospitals by 2020.

It noted that French and US companies remain the dominant foreign players running hospitals, while those from Thailand (Bumrungrad Hospital), Indonesia (Lippo Group), Malaysia (IHH Health care and KPJ Health care), and Singapore (Parkway Holdings) are now setting up operations or have expressed an interest in establishing facilities.

These private health care players anticipate strong growth within the sector, and Fitch Solutions Macro Research views this as a major driver behind the overall growth in the health care market, and by extension the sales of medicine, over the coming years.

The country’s health care market is set for a period of development as reforms within the sector gather momentum. Like many of its Asian neighbours, Vietnam is attempting to achieve universal health care through the implementation of a comprehensive health insurance system.

This commitment to roll out universal health care has the potential to completely reshape the sector, with significant implications for both pharmaceutical and health care providers, according to the paper.

A target set by a resolution of the 12th Party Central Committee’s 6th Plenum Session states that by 2025, about 95% of the Vietnamese population will be covered by the national health insurance scheme.

Additionally, the government is also aiming to lower the direct health care cost for each household by 35% in comparison with the current level. Moreover, by 2030, Vietnam hopes to increase the average life expectancy to 75 years old, with at least 68 years of healthy life.

Imminent challenges

Despite the positive outlook on the health care market, significant risks remain. Access to health care is set to remain a key challenge for pharmaceutical and health care companies seeking to capture commercial prospects in Vietnam as the population remains highly ruralized with just 33.6% living in urban areas. Meanwhile, patients continue to face challenges over medical access and rising out-of-pocket health care costs.

Furthermore, there is a large regional variation between health care facilities, doctors, and beds in rural and urban regions of the country, which further exacerbates access issues regarding access.

For example, the central province of Phu Yen was reported to have 54 doctors per 100,000 people in 2014, less than half the number in urban Ho Chi Minh City, which boasts 104 physicians per 100,000.

Moreover, limited public financing options mean that the inequalities facing the Vietnamese health care market are likely to continue. As a result, the burden of expenditure on medicine will continue to fall largely on the patient. The high levels of out-of-pocket payments required by the population for medicines restrict the accessibility of patented drugs.

Consequentially, there is a significant over-the-counter medicines market, and generic medicines will dominate the prescription drug market.

Fitch Solutions Macro Research, however, assumes health care is increasingly becoming a national priority. The paper noted that last December, the Asian Development Bank (ADB) approved a financial assistance package of US$100.6 million to support the nation’s efforts to improve the quality of health care services, particularly in poor and rural areas.

The package includes a US$88.6 million policy-based loan to provide budget support for the Ministry of Health to implement a programme of complex nationwide reforms in key areas such as public investment governance, health service delivery, and an improvement to workforce capacity in local health care systems.

A US$12 million non-refundable aid package will complement these reforms by piloting health care service delivery models in 12 districts across six provinces with high rates of poverty and poor health care security.

Hong Quang

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