Jeffrey Bahar, Deputy CEO of Spire Research and Consulting, shares the industry developments and future growth opportunities of healthcare services (hospital expansion) in Indonesia. Presented in Southeast Asia Hospital Expansion Summit, Jakarta 27 May 2015

1. 1
Healthcare in Indonesia:
Future Growth Opportunities
Prepared for:
South East Asia Hospital Expansion Summit
Jakarta, 27 May 2015

2. 2
Topic
1 Overview: Health industry in Indonesia
2 Where did the smart money go?
3
Reasons to invest in Indonesia’s health
industry
4 Challenges to Indonesia’s health industry

3. 3
Key Points in Indonesia’s Health
Industry

4. 4Source: The World Bank

5. 5Source: McKinsey Global Institute

6. 6Source: The World Bank, Spire Research and Consulting

7. 7
Overview: Health Industry in
Indonesia

8. 8
Overview: Health Industry in Indonesia
Source: The World Bank, Ministry of Health, Spire Research and Consulting
+255 MILLION
POPULATION
27%CONSUMING CLASS
56% MIDDLE CLASS
POPULATION
POPULATION
4th Largest Population in The World
9,671
1,882
538
Community Health Centers
General Hospitals
Specialized Hospital
Number of Healthcare Service
Providers in Indonesia (2015)
Health Services Provider
Government
65%
Private
35%
Percentage of Hospitals in Indonesia
Based on Ownership (2015)
Government Private

9. 9
Spread of General Hospitals (Public/Private)
in Indonesia
Aceh
43/16
Sumut
111/48
Sumbar
35/4
Riau
24/25
Jambi
16/12
Sumsel
34/12
Source: Ministry of Health
Bengkulu
17/1
Lampung
26/18
Kep. Babel
12/3
Kep. Riau
17/4
DKI Jakarta
52/43
Banten
23/35
Jabar
108/114
Jateng
167/51
DIY
37/14
Jatim
169/87
Bali
28/17
NTB
18/6
NTT
37/3
Kalbar
29/7
Kalteng
17/1
Kalsel
21/5
Kaltim
26/15
Sulut
35/3
Sulteng
22/1
Sulsel
49/11
Sultra
22/2
Gorontalo
10/1
Sulbar
9/1
Maluku
26/0
Malut
19/0
Papua Barat
12/4
Papua
34/2

10. 10
Number of Hospitals in Indonesia Based on
Class & Spread of class A and B Hospitals
Source: Ministry of Health, Spire Research and Consulting
3 10
38 201
8 67 5 15
4 28
0 4
0 2
58
327
843
462
730
A B C D Unclassified
Number of Hospital in Indonesia Based
on Class (2015)
Number of Hospital
Class A Hospital
Class B Hospital
To promote equitable
growth and spread of
hospitals, the government
gives maximum 67%
foreign ownership for new
investors.
Spread of class A and B Hospitals in Indonesia

11. 11
Medical Staff in Indonesia
Source: Ministry of Health
Ratio of doctor : patient in
Indonesia is around 1 : 3,500, much
lower than the government’s goal
at 1 : 2,500.
25,333
33,172
37,364
41,841
8,403
16,574
27,333
36,756
2010 2011 2012 2013
Number of General Practitioners and Medical Specialist in
Indonesia
General Practitioners Medical Specialist
169,797
230,280
235,496
288,405
2010
2011
2012
2013
Number of Nurses in Indonesia
Nurses

12. 12Source: The World Bank
35.52 182.83 47
1,057.77
95.45 36.48106.63
423.43
121.6
2,507.43
264.35 111.17
Indonesia Malaysia Philippines Singapore Thailand Vietnam
Healthcare Expenditure per Capita (in USD)
2005 2013
2.79
3.29
3.91 3.73 3.55
5.38
3.07
4.03
4.4 4.55 4.57
5.95
Indonesia Malaysia Philippines Singapore Thailand Vietnam
Percentage of GDP Spent on Healthcare
2005 2013
Healthcare Expenditure in ASEAN region

13. 13Source: Global Health Expenditures Database, WHO
How People in ASEAN Finance their
Healthcare Expenditure?
0
20
40
60
80
100
Indonesia Malaysia Philippines Thailand Vietnam
Breakdown of Healthcare Expenditure by Channel
Private Health Insurance Social Health Insurance
Government-Financed Healthcare Other Private Expenditures
Out of Pocket Payments

14. 14
Where did the Smart Money Go?

15. 15Source: Spire Research and Consulting
Preferred Destinations for Indonesian
Medical Tourists
1
Malaysia
2
Singapore
3
India
4
Thailand
In 2012, Indonesians spend
around USD 11.5 billion
a year for healthcare
services abroad.

16. 16
1
2
15
20
71
Source: Cybermetrics Lab
Best hospitals in various countries based on
ASEAN Ranking System
Philippines Heart
Center
Queen Sirikit National
Institute of Child’s Health
Singapore National
University Hospital
University Malaya
Medical Center
Rumah Sakit Mitra
Keluarga Group

17. 17
Price Comparison of Selected Medical
Procedures in Several Countries (in USD)
Source: Malaysia Healthcare Travel Council, 2012
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Healthcare
Bypass
Heart Valve
Replacement
Angioplasty Hip
Replacement
Hysterectomy Knee
Replacement
Spinal Fusion
Thailand Singapore India Malaysia

18. 18
Reasons to Invest in Indonesia’s
Health Industry

19. 19
Singapore
Malaysia
Indonesia
Thailand
Philippines
Population
Growth
Income
Growth
Penetration Regulations
Medical
Tourism
Country Attractiveness to Private Healthcare
Investment over Medium Term
Source: Credit Suisse 2014
Unattractive Neutral Attractive

20. 20
Challenges to Indonesia’s Health
Industry

21. 21Source: Spire Research and Consulting
Low health expenditure (USD 106.63)
compared to other ASEAN countries.
Shortage of doctors and medical
professionals (1 : 3,500 instead of 1 :
2,500).
Inequitable health financing resulting in
discrepancy in hospitals across areas.
Challenges to Indonesia’s Health Industry

22. 22
Tel: (62) 5794 5800
Fax: (62) 5794 5808
Wisma 46, Kota BNI 25th Floor,
Unit #07-09
Jakarta 10220
id.info@spireresearch.com
www.spireresearch.com