Asia healthcare opportunities 2011 and beyond

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Analysis of Investment and Partnership Opportunities in the Heathcare sector in Asia for the next decade.

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Asia healthcare opportunities 2011 and beyond

  1. 1. CONFIDENTIAL Coming Challenges for Healthcare in Asia Potential Opportunities 2011 & BeyondBy: KC YoonEmail: kcyoon07@gmail.com May 2011 1Mobile: 18675573803; Skype:kcyoon07Partner, Global China Capital
  2. 2. Framework of Report Provide Overview & Key Logic of Report Leading to Options Section One- Challenges Facing Global Healthcare Section Two- Future Scenarios for Asia’s Healthcare Industry Section Three- Assessing Partnership Opportunities 2
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  4. 4. Detailed Agenda of Report Provides background to key forces challenging global healthcare Section One- Challenges Facing Global Healthcare Global Healthcare Faces Pressure from Triple Convergence Trend 1 : Ageing World Populace Trend 2: Rising Global Healthcare Costs Trend 3: Unequal Distribution of Healthcare Capabilities Multiple Impact on Global Healthcare Impact 1: Nature of Services Impact 2: Global Healthcare Industry Impact 3: Healthcare Industry Sectors Healthcare Spending: Large Differences, Unequal Results Case Study: US Healthcare System Rise of Healthcare Consumers 4
  5. 5. Global Healthcare Faces Increased Pressure from the TripleConvergence of Major Trends ..Convergence Creates • Opportunities for Global Public & PrivateUndue Challenges on Sectors Drive to Create Innovative Solutions Global Healthcare to Bring the Global Healthcare System back to System Equilibrium (?) Triple Convergence Trend One: Trend Two: Ageing World Global Rising Global Populace Health- Healthcare Costs care 2050 Trend Three: Unequal Distribution of Healthcare Capabilities
  6. 6. Trend 1: Ageing World Populace Results in Significant Shifts inGlobal Demographic Profiles… Globally number of • Old-age dependency ratios will increasepeople aged 60 years significantly as the number of elderly or older will reach 2 increases and the working-age populations billion by 2050 decline Shifts in Population Pyramids Old-age Dependency Ratios in Global Regions Developed Nations Less-developed Nations Source: UN 2007 • Europe will witness the highest old-age dependency ratios at 48% vs Asia with a relatively younger population at 27% (i.e. ratio of aged population vs working-age population)Source: UN 2007
  7. 7. Trend 2: Rising Global Healthcare Costs Expected to Continue in Coming Years Albeit at Lower Growth rate 2010- Medical • Two most significant factors driving Costs in 95% of Healthcare costs increase are new medical Countries technologies and the overuse of care. Exceeded Inflation Upwards Costs Trend Expected Major Factors Driving Medical Costs• Expectations of medical cost trend over • Significant factors driving medical costs the next 5 years per person Source: Towers Watson Global Medical Trends Survey of Health Insurers 2010Source: Towers Watson Global Medical Trends Survey of HealthInsurers 2010
  8. 8. Trend 3: Unequal Distribution of Healthcare Capabilities fromDeveloped to Emerging Nations.. Gaps Emerging in • Developed nations confronted with demands Healthcare on public pension & healthcare; emerging Capabilities Across nations faces under-developed health the Globe insurance & shortage of trained healthworkersAccess to Medications & Technology Structural Shortfall -Trained Health Workers • Structural mismatch- emerging nations with young populace but lacked trained talent vs Advanced drugs treatment beyond developed nations faced w limited workforce reach of poorer healthcare systems- substitute generics with poorerefficacy. However major drug patents expiring 2015Expensive modern diagnostic systems unavailable to most nations Source: WEF Report 2010
  9. 9. Detailed Agenda of Report Provides background to key forces challenging global healthcare Section One- Challenges Facing Global Healthcare Global Healthcare Faces Pressure from Triple Convergence Trend 1 : Ageing World Populace Trend 2: Rising Global Healthcare Costs Trend 3: Unequal Distribution of Healthcare Capabilities Multiple Impact on Global Healthcare Impact 1: Nature of Services Impact 2: Global Healthcare Industry Impact 3: Healthcare Industry Sectors Healthcare Spending: Large Differences, Unequal Results Case Study: US Healthcare System Rise of Healthcare Consumers 9
  10. 10. Multiple Impact Across Global Healthcare Value Chain – fromPublic Health Systems to Healthcare Industry Impacting National • Driving increased National Healthcare Systems to Private spending and changes in healthcare service Healthcare demands & delivery Providers • Public • - Increased GDP allocation to national healthcare Healthcare • - Drive for system integration Systems •Convergence of Global • - Changes in demand for healthcare servicesTripleTrends Healthcare • - Shift in provision of healthcare services Industry • - Geographic shift in location of healthcare players Healthcare • - Consolidation/growth in different healthcare Industry sectors Sectors
  11. 11. Impact 1: Public Healthcare Systems Allocated Increased Budget and are Focused on Integration Increased share • Developed economies will see 30%-50% Of GDP Allocation to increase in Healthcare’s share of GDP by Healthcare Across 2050; Emerging countries similarly spending Nations significant sums to build national systems Increased Public Spending on Healthcare Integration of Healthcare Delivery• Projected Increase in Public Spending on • Priority more for developed nations rather Healthcare in Developed Nations in 2050 than emerging healthcare systems Source: World Economic Forum -Pensions & Healthcare 2030 Scenario Report Source: KPMG Report 2010
  12. 12. Impact 2A: Global Healthcare Industry Faces Changes in Nature of Services Required Burden of • Major Chronic diseases that now accounts for Chronic Diseases 60% of all deaths & 43% of global disease due to Aged burden will rise to 73% and 60% respectively Populace by 2020 Top 3 Upcoming Chronic Diseases Change in Kind of Healthcare Required• Top 3 conditions causing highest prevalence of claims over next 5 years Treatment of upcoming Chronic diseases i.e. cancer, cardio is expensive & requires new medical resources, higher cost medication, etc Shift from acute care to a “continuum of care” as mortality rates improves and patients suffering from chronic diseases require extensive hospital care Source: Towers Watson Global Medical Trends Survey of Healthcare Insurers 2010
  13. 13. Impact 2B: Global Healthcare Industry Faces Shifts in the Provision of Services Advances in • Advancements in wireless, device technology Technology & allows patients to enjoy in-home monitoring Devices Shifts supported by a call service center or online Service Provision communications platform mHealth Potentially Disruptive In-Home Monitoring/ Online Healthcare• With the growth of smartphones and availability of connected devices , an era of eHealth or mHealth is emerging – “provision of health services and information vis mobile technologies” • In-home monitoring provides best of both worlds: comfort of staying home with security of daily monitoring and proper medical attention. Allows preventive care & reduces emergencies.
  14. 14. Impact 3: Global Healthcare Industry Focuses on Growth in Asia Increasing Demand • China expected to become 2nd largest Pharma from Asia Driving market by 2015 with market valued at US$103 Focus of Global billion; also significant increase in new drug Healthcare MNCs R&D Healthcare Reforms & Investments Migration of Global R&D• RMB 850 billion investment to improve • China’s CRO Market forecast to grow healthcare delivery infrastructure- drives significantly demand for medical devices & systems Source: MOH Source: Goldman Sachs; Healthcare CROs
  15. 15. Detailed Agenda of Report Provides background to key forces challenging global healthcare Section One- Challenges Facing Global Healthcare Global Healthcare Faces Pressure from Triple Convergence Trend 1 : Ageing World Populace Trend 2: Rising Global Healthcare Costs Trend 3: Unequal Distribution of Healthcare Capabilities Multiple Impact on Global Healthcare Impact 1: Nature of Services Impact 2: Global Healthcare Industry Impact 3: Healthcare Industry Sectors Healthcare Spending: Large Differences, Unequal Results Case Study: US Healthcare System Rise of Healthcare Consumers 15
  16. 16. Healthcare Spending – Large Differences but Unequal ResultsHigher Spending on • Exposes inefficiencies in respective nation’sHealthcare does not healthcare spending and policies; additionalnecessarily prolong spend has opportunity to be better allocated lives for improved services Healthcare Spend vs Life Expectancy • Based on 2007 OECD Health spend Data: Comparison of per capita healthcareLife Expectancy 81 81 76 80 79 73 78 80 80 78 In Years
  17. 17. Case Study: US Healthcare Costs Breakdown Shows ExcessiveSpend on Out-patient care, Admin and Medical Goods.. US per capita • Reduction of US Healthcare costs… Healthcare cost 2X Compared to Developed Nations Analysis of US and Selective Developed Nations 2007 Healthcare Cost Breakdown Breakdown into 3 Major Healthcare Cost Components Source: OECD and CIA factbook
  18. 18. Detailed Agenda of Report Provides background to key forces challenging global healthcare Section One- Challenges Facing Global Healthcare Global Healthcare Faces Pressure from Triple Convergence Trend 1 : Ageing World Populace Trend 2: Rising Global Healthcare Costs Trend 3: Unequal Distribution of Healthcare Capabilities Multiple Impact on Global Healthcare Impact 1: Nature of Services Impact 2: Global Healthcare Industry Impact 3: Healthcare Industry Sectors Healthcare Spending: Large Differences, Unequal Results Case Study: US Healthcare System Rise of Healthcare Consumers 18
  19. 19. Rise of Healthcare Consumers Open New Opportunities and Non-Conventional Approaches to Meeting Healthcare Needs.. Consumers • Consumers in Developed Nations Seeking Increasing Desire to Information, Comparing Services & Manage Healthcare Increasingly Willing to Travel to seek Lower- Needs cost or Higher quality Healthcare Consumer Objectives New Services Consumers want access to info from • Online medical Access to hospitals, doctors and health plans; database Information for to better understand providers and • Online scheduling Decision pricing for healthcare service • Doctor-patient X-change platform • Online healthcare Future Consumers use tools that can Tools & programs “Savvy” provide personalized Services to • Nurse call linesHealthcare recommendations for improving • Online claims ManageConsumers health & disease management management Embrace Consumers interested in home or • Home Monitoring Non- self-monitoring devices; alternative Devices traditional. treatment regimes i.e. TCM; travel to • Homecare network seek better healthcare • Medical Tourism Options
  20. 20. Framework of Report Provide Overview & Key Logic of Report Leading to Options Section One- Challenges Facing Global Healthcare Section Two- Future Scenarios for Asia’s Healthcare Industry Section Three- Assessing Partnership Opportunities 20
  21. 21. 21
  22. 22. Detailed Agenda of Report Layout scenarios for healthcare in Asia due to global changes Section Two- Future Scenarios for Asia’s Healthcare Industry Healthcare in Asia at Unique Cross-road Ideal Conditions to Build World-class Healthcare Industry Condition (1): Young Populace Condition (2): Strong Private-Public Collaboration Condition (3): Increasing Healthcare Demand Asia’s Role in a Globally Integrated Healthcare System Scenario (1): R & D Scenario (2): Healthcare Service Delivery Asia- the World’s Largest Medical Tourism Destination Drivers of Outbound Medical Tourism Fundamental Factors Favoring Growth 22
  23. 23. Healthcare in Asia at Unique Crossroads – Leverage Global to beWorld-class Opportunity for • Healthcare in Asia to grow from low-base and Asia to Leverage on can leverage on Global Healthcare Global Healthcare partnerships to build world-class healthcare System services Characteristics of Healthcare in Asia Young Populace & Poor Healthcare Insurance & Low Old-age Dependency Provider Coverage Low-tech Medical EquipmentRelatively Low Demand for & Generic Drugs Expensive Healthcare Global Healthcare Partnership Opportunity Increasingly Wealthy Asian Populace Demand Better Healthcare
  24. 24. Detailed Agenda of Report Layout scenarios for healthcare in Asia due to global changes Section Two- Future Scenarios for Asia’s Healthcare Industry Healthcare in Asia at Unique Cross-road Ideal Conditions to Build World-class Healthcare Industry Condition (1): Young Populace Condition (2): Strong Private-Public Collaboration Condition (3): Increasing Healthcare Demand Asia’s Role in a Globally Integrated Healthcare System Scenario (1): R & D Scenario (2): Healthcare Service Delivery Asia- the World’s Largest Medical Tourism Destination Drivers of Outbound Medical Tourism Fundamental Factors Favoring Growth 24
  25. 25. Ideal Conditions to Build World-class Service (1) – YoungPopulace Provides Pool for Healthcare Workforce Young Populace • As developed nations face a shrinking and Provides Talent Pool increasingly costly workforce, the young For Healthcare populace in Asia offers an alternative source Workforce of trained healthcare workforce Transforming Asia’s Talent Pool Partnerships with Nursing Institutes• Pool for Medical Professionals- Doctors + Nurses(Philippines & Indonesia already provide Global Medical Facilitiespool of trained nurses; Singapore, Malaysia Collaborate w Local Institutes& HK have strong medical talent pool)• Pool for Medical Equipment Operators; Global Healthcare MNCs invest medical researchers in training• Pool for Outsourced Medical Admin & Services- Call-centers; database admin Global Pharma’s outsourced(India & Philippines already building R&Dsignificant pool)
  26. 26. Ideal Conditions to Build World-class Service (2) – Strong Public-Private Collaboration Govts in SE Asia • Following Govt investments; Private sector Investing heavily in players have also committed significant capital Healthcare expenditure to the overall healthcare service Infrastructure infrastructure Private Sector Healthcare InvestmentSE Asian Governments records the highest private Key driver is impendinghealthcare expenditure of any region at 63% of liberalisation of services sector bytotal health expenditure 2015 under ASEAN agreement Private hospitals across region diversifying service portfolio to offer broader healthcare services Presence of several large healthcare groups- Parkway (SG), Bangkok Dusit (TH), Sunway Medical (MY)Source: WHO 2010
  27. 27. Ideal Conditions to Build World-class Service (3) – StrongHealthcare Demand Strong Demand • Increasingly discerning domestic consumers Driving and need to cater to global consumers due to Improvements to medical tourism driving providers to innovate Service in order to position as world-class providers Medical Tourism by Country 2009Five Countries Most Visited for Medical Treatments Medical Industry contributes over US$80billion to Singapore GDP and is a significant service sector Thailand’s medical tourism generates US$940million and continues to grow strongly Other SE Asian countries Malaysia and Vietnam are targeting to grow this sectorSource: Deloitte, Josef Woodman Oct 2009
  28. 28. Detailed Agenda of Report Layout scenarios for healthcare in Asia due to global changes Section Two- Future Scenarios for Asia’s Healthcare Industry Healthcare in Asia at Unique Cross-road Ideal Conditions to Build World-class Healthcare Industry Condition (1): Young Populace Condition (2): Strong Private-Public Collaboration Condition (3): Increasing Healthcare Demand Asia’s Role in a Globally Integrated Healthcare System Scenario (1): R & D Scenario (2): Healthcare Service Delivery Asia- the World’s Largest Medical Tourism Destination Drivers of Outbound Medical Tourism Fundamental Factors Favoring Growth 28
  29. 29. Asia’s Role in a Globally Integrated Healthcare System – R&D2050 Asia- Hub for • R&D includes drug development as well asR&D Outsourcing + production of medical devices & IT systems; Medical Device with majority of activities focused in Asia Production where manpower/production costs are low US EU CHINA Healthcare IT Identify Med. Device software Med. Device Healthcare IT Drug Tgts R&D R&D software Identify Drug Tgts Drug Med. Device Identify Discovery Production Drug Tgts INDIA PreClin+ Drug PreClin+ Clinical Discovery Clinical Med. Device Healthcare IT R&D software Healthcare IT software
  30. 30. Asia’s Role in a Globally Integrated Healthcare System – Service Delivery 2050 Asia – Hub for • Network covers Admin, Database Mgt, Selective Surgery+ Service Centers Comms with Medical experts, Aged Hospice Care+ Outpatient and in-patient care; Asia focus on Service Support In-patient care & aged Hospice services US EU ASIA Comms Plt w Online Medical Healthcare Comms Plt w Experts Program Medical In-Patient Experts Care (Medical * Tourism) INDIA Online Aged Hospice Healthcare Service Program Online Medical (Retirement Emergency Database Homes) Service Home-based Centers Health Monitoring Call Center Support* In-Patient/ Out- Patient care
  31. 31. Detailed Agenda of Report Layout scenarios for healthcare in Asia due to global changes Section Two- Future Scenarios for Asia’s Healthcare Industry Healthcare in Asia at Unique Cross-road Ideal Conditions to Build World-class Healthcare Industry Condition (1): Young Populace Condition (2): Strong Private-Public Collaboration Condition (3): Increasing Healthcare Demand Asia’s Role in a Globally Integrated Healthcare System Scenario (1): R & D Scenario (2): Healthcare Service Delivery Asia- the World’s Largest Medical Tourism Destination Drivers of Outbound Medical Tourism Fundamental Factors Favoring Growth 31
  32. 32. Asia- World’s Largest Medical Tourism Destination Potential Global • Asia well-positioned to continue on strong Medical Tourism growth projections in the market- as even Market of US$100 more Asian-based destinations enter the billion in 2010 market i.e. China, Vietnam, Taiwan Partnerships withLeading US-basedMedical Institutions *Profiles of Leading Asian Healthcare Providers
  33. 33. Medical Tourism in Asia- Drivers of Outbound Medical Tourism Consumers • Industry initially driven by high cost of Travel to Seek Lower healthcare in the US and Outbound US Cost + Quality & Safe Tourists; Demand from regional countries Healthcare increasingly important Comparative Costs for Selected Surgeries Outbound Travellers to Asia for MedicalCosts in Asia are significantly lower than the US UK Inefficient domestic healthcare service and introduction of medical tourism insurance driving growth. Preferred destination: India US Seeking lower cost healthcare, over 750K US residents travel annually for medical tourism. Preferred destination: Thailand Within Asia Regional travellers taking advantage of cheap flights and higher quality service-Source: American Medical Association Indonesians, Chinese, Japanese
  34. 34. Medical Tourism in Asia- Fundamental Factors Favors Growth Asia has Strong • Strong mix of medical destinations and Foundations to development of overall tourism infrastructure Support Medical to support medical tourism growth; offers Tourism Growth combination of medical + holiday Fundamental Factors Strength of Leading Destinations Thailand High Quality of Service Pioneer & leader industry leader with Associated with Asian Culture established reputation. In 2009; 1.4 M medical tourists generating US$2 billion Attractive Holiday environment- Singapore for Post-surgery Recovery Over 600K medical tourists generating US$1.4billion with reputation for high quality and advanced care Availability of Alternative Medicine/Treatment India & Malaysia Emerging with over 450K & 300K tourists respectively. Attractive to regional consumers
  35. 35. Framework of Report Describe framework and criteria in assessing opportunities Section One- Challenges Facing Global Healthcare Section Two- Future Scenarios for Asia’s Healthcare Industry Section Three- Assessing Partnership Opportunities 35
  36. 36. 36
  37. 37. Detailed Agenda of Report Describe framework and criteria in assessing opportunities Section Three- Assessing Partnership Opportunities Framework and Criteria for Assessing Partnership Opportunity Criterion for Screening Healthcare Cluster Ranking of Potential Healthcare Cluster Opportunity Recommendations for Shortlisted 37
  38. 38. Framework and Criteria for Assessing Target Sites forPartnership Opportunity Opportunities • Screened to ensure Opportunities meet will Undergo Two Healthcare Cluster as well as Eco-cityLevels of Screenings Development Criteria before Financial Modeling for Investment Return Potential HC+ Potential Shortlist Healthcare Eco Cluster HC Sites Ready Opportunities Sites Sites Screened for Screened for Screened for Healthcare Eco-City Investment Cluster Criteria Criteria Return* In this paper screening forthis criterion list shall onlybe done at the Country level.
  39. 39. Criterion for Screening Healthcare Cluster Capabilities for TargetSite Healthcare Cluster • Healthcare Services as the Core Cluster must as the Core drive sufficient economic activity to support & Economic Theme sustain the development of an integrated urban city Healthcare Cluster Components
  40. 40. Criterion for Screening Healthcare Cluster Capabilities for TargetSite Criteria Assessed Capabilities Govt Public HC Funding L M H HH HH- World-class Supporting Policies L M H HH HC Insurance Coverage L M H HH External Assistance (NGO) L M H HH Regulatory L M H HHHC Industry Market Value L M H HH Growth L M H HH HC Technology Platform L M H HH HC Delivery Infra L M H HH HC Comp Competitiveness L M H HH HC Supply Chain L M H HH HC R&D L M H HH HC Workforce L M H HH Global Interaction L M H HH HC Private HC Funding L M H HH Investors Foreign Investments L M H HH HC Per capita spend L M H HHConsumers Demand for HC L M H HHSupporting Education & Training L M H HH HC Financing L M H HH
  41. 41. Detailed Agenda of Report Describe framework and criteria in assessing opportunities Section Three- Assessing Partnership Opportunities Framework and Criteria for Assessing Partnership Opportunity Criterion for Screening Healthcare Cluster Ranking of Potential Healthcare Cluster Opportunity Summary of Market Opportunity for Healthcare Sectors Recommendations for Shortlisted 41
  42. 42. Summary of Assessment of Healthcare SectorsHealthcare Govt HC HC HC HC Support Sectors Industry Competitive Consumer Investor Svcs M HH HH H H HVietnam M M M M H HMalaysia H H HH M H HThailand H HH HH H H H India M M H M H H
  43. 43. Ranking of Potential Healthcare Opportunities-(1) China (2) Thailand (3) Malaysia (4) Vietnam Country Govt HC HC HC HC Support Industry Competitive Consumer Investor Svcs China M HH HH H H HVietnam M M M M H HMalaysia H H HH M H HThailand H HH HH H H H India M M H M H H
  44. 44. Detailed Agenda of Report Describe framework and criteria in assessing opportunities Section Three- Assessing Partnership Opportunities Framework and Criteria for Assessing Partnership Opportunity Criterion for Screening Healthcare Cluster Ranking of Potential Healthcare Cluster Opportunity Recommendations for Shortlisted 44
  45. 45. Recommended Shortlist for Consideration Project Must Also • Re-matching Market Opportunity with Consider What Potential Value-add results in a Adjusted Value-add Partner Ranked Recommended List Brings Country Market Final Ranking Opportunity with input Ranked China 1 1 Vietnam 4 2 Malaysia 3 3 Thailand 2 4
  46. 46. China Offers Opportunity to Create a World-class Health Services Cluster and Aged Care Community Leverage on • Partner can bring Global biotech+healthcareChina’s Competitive management , IT strengths to play to createStrengths to Create China’s most advanced health deliveryWorld-class Cluster infrastructure & care servicesCreate China’s first World-class Health Delivery Service Hub Site Preferred Location to Tap on Access to Global Medical Tourism- Zhuhai/Hainan Access to Univ. or Cluster Must Collaborate w Global Medical Institutions to create R&D Hub Build advanced Hospital care facilities leveraging e-health technologies – target treatment of chronic diseases Zhuhai Create environment for high-end aged care Hainan homes and wellness care facilities

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