27 July 2017
Provision of Healthcare Set to Become Primary Global Economic Driver
With the elderly demographic continuing to expand in virtually every economy, meeting ever-rising healthcare costs and providing the appropriate medical infrastructure may yet prove to be the defining challenges of the 21st century.
Despite global political uncertainties and a sluggish economic outlook, Frost & Sullivan, the Texas-headquartered business consultancy, is predicting a massive increase in healthcare spending across the Asia-Pacific region. In 2017, the region is expected to account for 30% of the total global spend in the sector, while still recording an annual growth rate of 8% – almost double the global average of 4.8%.
Overall, Asia Pacific healthcare spend 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. It is small wonder, then, that so many delegates, speakers and exhibitors made their way to Singapore for this year's Asia Health event, one of the region's premier medical expos.
Speaking at the opening of the event, Rhenu Bhuller, the Senior Vice-president of Frost & Sullivan's Healthcare division, provided a snapshot of the current state of the industry, saying: "Governments are not taking action to curb the rapid rise in drug prices. At the same time, a number of tech giants, including Apple, Google and IBM, have begun to seriously invest in the opportunities they see in healthcare.
"Overall, it is clear that record amounts are going to 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."
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% of all medical devices come from the US and that dominance is likely to remain even over the long-term."
Despite the technological supremacy of the US, Fredrik Nyberg, Chief Executive of the Asia-Pacific Medical Technology Association (APACMed), 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 said: "By 2020, the Asia-Pacific medical-device market will be bigger than its European counterpart and will be worth US$128-133 billion. Accounting for 24% of the global market, it will be the second-largest component, though still dwarfed by North America's 42%.
"In 2015, though, the local medical-devices market represented only 22% 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."
Nyberg did, however, caution that Asia-Pacific is very heterogeneous compared to North America or Europe, with multiple socio-economic segments frequently found within the same country. Among the other factors he saw as likely to have a significant impact were the ever more cost effective solutions being sought by many governments, the diverse nature of the existing infrastructure and the evolving nature of the regulatory framework across the region. Above all, though, he emphasised that competition in the sector is likely to be increasingly intense, with China alone having licensed some 15,000 medical-device companies.
It was left to Tiger Tang, Founder of the Tangbridge Think-Tank, a Singapore based healthcare consultancy, to provide a snapshot of the opportunities emerging in a number of the national markets across Asia. Starting with the big numbers, she said: "The Indian healthcare market is today worth about US$100 billion. By 2020, with its compound annual growth rate [CAGR] of 23%, 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% and 12%, respectively.
"In the case of China, it is both big and growing fast. In 2015, China spent $60 billion on healthcare, some 6.2% 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 citzens 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 $2.62 trillion by 2030.
"Given the country's changing demographic, the implementation of preventative medicine regimes is now one of its priorities. In line with this, in November last year, 38 cities and districts were designated as pilot Healthy Cities, with the provision of a healthy environment one of the key aims of the initiative."
Perhaps the most strident warnings with regard to the implications of the aging population time bomb that is ticking away across Asia came from Professor Heung Bong Cha, the President of the International Association of Gerontology and Geriatrics. Addressing the challenge of the – in his words – "coming global silver tsunami", he said: "In 1950, there were 200 million people around the world aged 60 and above. By 2050, there will be two billion – a 10-fold increase in just 100 years.
"Today, only one country – Japan – has an aged population in excess of 30%. 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 20-29% 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."
Turning to problems that are more specific to Asia, Rebecca Samuel, Director of Consulting for ICME Healthcare Asia, a Zurich-headquartered healthcare consultancy, said: "While in many developing countries there are insufficient hospital beds, the problem is far greater in Indonesia and in a number of other Asian countries. 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.
"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 characterizes many healthcare professionals and managers."
Asia Health 2017 was held from 3-5 April at the Suntec Convention & Exhibition Centre.
Ronald Hee, Special Correspondent, Singapore