Asia - Healthcare - Opportunities 2011 and Beyond

Coming Challenges for Healthcare in Asia
Potential Opportunities 2011 & Beyond

May 2011
1
Framework of Report
Provide Overview & Key Logic of Report Leading to Options
Section OneChallenges Facing Global Healthcare
Section TwoFuture Scenarios for Asias Healthcare Industry
Section ThreeAssessing Partnership Opportunities
Detailed Agenda of Report

Provides background to key forces challenging 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
Global Healthcare Faces Increased Pressure from the Triple Convergence of Major Trends ..
Convergence Creates Undue Challenges on Global Healthcare System
Opportunities for Global Public & Private

Sectors Drive to Create Innovative Solutions to Bring the Global Healthcare System back to Equilibrium (?)
Triple Convergence
Trend One: Ageing World Populace
Global Healthcare 2050
Trend Two: Rising Global Healthcare Costs
Trend Three: Unequal Distribution of Healthcare Capabilities
Trend 1: Ageing World Populace Results in Significant Shifts in Global Demographic Profiles
Globally number of people aged 60 years or older will reach 2 billion by 2050
Shifts in Population Pyramids
Old-age dependency ratios will increase

significantly as the number of elderly increases and the working-age populations decline
Old-age Dependency Ratios in Global Regions
Developed Nations
Less-developed Nations
Source: UN 2007
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)
Trend 2: Rising Global Healthcare Costs Expected to Continue in Coming Years Albeit at Lower Growth rate
2010- Medical Costs in 95% of Countries Exceeded Inflation
Upwards Costs Trend Expected
Two most significant factors driving

Healthcare costs increase are new medical technologies and the overuse of care.
Major Factors Driving Medical Costs
Expectations of medical cost trend over the next 5 years
Significant factors driving medical costs per person
Source: Towers Watson Global Medical Trends Survey of Health Insurers 2010
Source: Towers Watson Global Medical Trends Survey of Health Insurers 2010
Trend 3: Unequal Distribution of Healthcare Capabilities from Developed to Emerging Nations..

Gaps Emerging in Healthcare Capabilities Across the Globe
Developed nations confronted with demands

on public pension & healthcare; emerging nations faces under-developed health insurance & shortage of trained healthworkers
Structural Shortfall -Trained Health Workers
Access to Medications & Technology
Advanced drugs treatment beyond reach of poorer healthcare systemssubstitute generics with poorer efficacy. However major drug patents expiring 2015 Expensive modern diagnostic systems unavailable to most nations
Structural mismatch- emerging nations with young populace but lacked trained talent vs developed nations faced w limited workforce
Source: WEF Report 2010





9
Multiple Impact Across Global Healthcare Value Chain from Public Health Systems to Healthcare Industry
Impacting National Systems to Private Healthcare Providers
Driving increased National Healthcare

spending and changes in healthcare service demands & delivery
Public Healthcare Systems - Increased GDP allocation to national healthcare - Drive for system integration
Convergence of TripleTrends
Global Healthcare Industry
- Changes in demand for healthcare services - Shift in provision of healthcare services
Healthcare Industry Sectors
- Geographic shift in location of healthcare players - Consolidation/growth in different healthcare sectors
Impact 1: Public Healthcare Systems Allocated Increased Budget and are Focused on Integration
Increased share Of GDP Allocation to Healthcare Across Nations
Developed economies will see 30%-50%

increase in Healthcares share of GDP by 2050; Emerging countries similarly spending significant sums to build national systems
Increased Public Spending on Healthcare
Integration of Healthcare Delivery
Projected Increase in Public Spending on Healthcare in Developed Nations in 2050
Priority more for developed nations rather than emerging healthcare systems
Source: World Economic Forum -Pensions & Healthcare 2030 Scenario Report Source: KPMG Report 2010
Impact 2A: Global Healthcare Industry Faces Changes in Nature of Services Required
Burden of Chronic Diseases due to Aged Populace
Major Chronic diseases that now accounts for

60% of all deaths & 43% of global disease burden will rise to 73% and 60% respectively 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
Impact 2B: Global Healthcare Industry Faces Shifts in the Provision of Services
Advances in Technology & Devices Shifts Service Provision
Advancements in wireless, device technology

allows patients to enjoy in-home monitoring supported by a call service center or online 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.
Impact 3: Global Healthcare Industry Focuses on Growth in Asia
Increasing Demand from Asia Driving Focus of Global Healthcare MNCs
China expected to become 2nd largest Pharma

market by 2015 with market valued at US$103 billion; also significant increase in new drug R&D
Healthcare Reforms & Investments
Migration of Global R&D
RMB 850 billion investment to improve healthcare delivery infrastructure- drives demand for medical devices & systems
Chinas CRO Market forecast to grow significantly
Source: MOH
Source: Goldman Sachs; Healthcare CROs





15
Healthcare Spending Large Differences but Unequal Results
Higher Spending on Healthcare does not necessarily prolong lives
Exposes inefficiencies in respective nations

healthcare spending and policies; additional spend has opportunity to be better allocated for improved services
Healthcare Spend vs Life Expectancy
Based on 2007 OECD Health spend Data: Comparison of per capita healthcare
Life Expectancy In Years
81
81
76
80
79
73
78
80
80
78
Case Study: US Healthcare Costs Breakdown Shows Excessive Spend on Out-patient care, Admin and Medical Goods..
US per capita Healthcare cost 2X Compared to Developed Nations
Reduction of US Healthcare costs
Analysis of US and Selective Developed Nations 2007 Healthcare Cost Breakdown

Breakdown into 3 Major Healthcare Cost Components
Source: OECD and CIA factbook





18
Rise of Healthcare Consumers Open New Opportunities and NonConventional Approaches to Meeting Healthcare Needs..
Consumers Increasing Desire to Manage Healthcare Needs
Consumers in Developed Nations Seeking Information, Comparing Services & Increasingly Willing to Travel to seek Lowercost or Higher quality Healthcare
Consumer Objectives New Services
Online medical database Online scheduling Doctor-patient X-change platform Online healthcare programs Nurse call lines Online claims management
Access to Information for Decision
Consumers want access to info from hospitals, doctors and health plans; to better understand providers and pricing for healthcare service
Future Savvy Healthcare Consumers
Tools & Services to Manage
Consumers use tools that can provide personalized recommendations for improving health & disease management
Embrace Nontraditional. Options
Consumers interested in home or self-monitoring devices; alternative treatment regimes i.e. TCM; travel to seek better healthcare
Home Monitoring Devices Homecare network Medical Tourism
Framework of Report
Provide Overview & Key Logic of Report Leading to Options
20
21

Layout scenarios for healthcare in Asia due to global changes

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
Asias Role in a Globally Integrated Healthcare System

Scenario (1): R & D Scenario (2): Healthcare Service Delivery
Asia- the Worlds Largest Medical Tourism Destination

Drivers of Outbound Medical Tourism Fundamental Factors Favoring Growth
22
Healthcare in Asia at Unique Crossroads Leverage Global to be World-class

Opportunity for Asia to Leverage on Global Healthcare System
Healthcare in Asia to grow from low-base and

can leverage on Global Healthcare partnerships to build world-class healthcare services
Characteristics of Healthcare in Asia
Young Populace & Low Old-age Dependency
Poor Healthcare Insurance & Provider Coverage
Relatively Low Demand for Expensive Healthcare
Low-tech Medical Equipment & Generic Drugs
Global Healthcare Partnership Opportunity

Increasingly Wealthy Asian Populace Demand Better Healthcare




24
Ideal Conditions to Build World-class Service (1) Young Populace Provides Pool for Healthcare Workforce
Young Populace Provides Talent Pool For Healthcare Workforce
As developed nations face a shrinking and

increasingly costly workforce, the young populace in Asia offers an alternative source of trained healthcare workforce
Transforming Asias Talent Pool
Partnerships with Nursing Institutes
Pool for Medical Professionals- Doctors + Nurses (Philippines & Indonesia already provide pool of trained nurses; Singapore, Malaysia & HK have strong medical talent pool)
Global Medical Facilities Collaborate w Local Institutes
Pool for Medical Equipment Operators; medical researchers
Global Healthcare MNCs invest in training Global Pharmas outsourced R&D
Pool for Outsourced Medical Admin & Services- Call-centers; database admin (India & Philippines already building significant pool)
Ideal Conditions to Build World-class Service (2) Strong PublicPrivate Collaboration

Govts in SE Asia Investing heavily in Healthcare Infrastructure
Following Govt investments; Private sector

players have also committed significant capital expenditure to the overall healthcare service infrastructure
Private Sector Healthcare Investment

SE Asian Governments records the highest private healthcare expenditure of any region at 63% of total health expenditure
Key driver is impending liberalisation of services sector by 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
Ideal Conditions to Build World-class Service (3) Strong Healthcare Demand

Strong Demand Driving Improvements to Service
Increasingly discerning domestic consumers

and need to cater to global consumers due to medical tourism driving providers to innovate in order to position as world-class providers
Medical Tourism by Country 2009

Five Countries Most Visited for Medical Treatments
Medical Industry contributes over US$80billion to Singapore GDP and is a significant service sector
Thailands medical tourism generates US$940million and continues to grow strongly
Other SE Asian countries Malaysia and Vietnam are targeting to grow this sector
Source: Deloitte, Josef Woodman Oct 2009




28
Asias Role in a Globally Integrated Healthcare System R&D 2050

Asia- Hub for R&D Outsourcing + Medical Device Production
R&D includes drug development as well as

production of medical devices & IT systems; with majority of activities focused in Asia where manpower/production costs are low
US
EU
Healthcare IT software Healthcare IT software
CHINA
Med. Device R&D
Med. Device R&D
Identify Drug Tgts
Identify Drug Tgts
Identify Drug Tgts
INDIA
Drug Discovery PreClin+ Clinical
Med. Device R&D Healthcare IT software
Drug Discovery PreClin+ Clinical
Med. Device Production
Healthcare IT software
Asias Role in a Globally Integrated Healthcare System Service Delivery 2050

Asia Hub for Selective Surgery+ Aged Hospice Care+ Service Support
Network covers Admin, Database Mgt, Service Centers Comms with Medical experts, Outpatient and in-patient care; Asia focus on In-patient care & aged Hospice services
US
Comms Plt w Medical Experts
EU
Online Healthcare Program
ASIA
Comms Plt w Medical Experts
INDIA
Online Healthcare Program Emergency Service Centers Online Medical Database
In-Patient Care (Medical Tourism) Aged Hospice Service (Retirement Homes)
Home-based Health Monitoring
Call Center Support
In-Patient/ OutPatient care




31
Asia- Worlds Largest Medical Tourism Destination
Potential Global Medical Tourism Market of US$100 billion in 2010
Asia well-positioned to continue on strong growth projections in the market- as even more Asian-based destinations enter the market i.e. China, Vietnam, Taiwan
Partnerships with Leading US-based Medical Institutions

*
Profiles of Leading Asian Healthcare Providers
Medical Tourism in Asia- Drivers of Outbound Medical Tourism
Consumers Travel to Seek Lower Cost + Quality & Safe Healthcare
Industry initially driven by high cost of

healthcare in the US and Outbound US Tourists; Demand from regional countries increasingly important
Comparative Costs for Selected Surgeries

Costs in Asia are significantly lower than the US
Outbound Travellers to Asia for Medical 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 serviceIndonesians, Chinese, Japanese
Source: American Medical Association
Medical Tourism in Asia- Fundamental Factors Favors Growth
Asia has Strong Foundations to Support Medical Tourism Growth
Strong mix of medical destinations and

development of overall tourism infrastructure to support medical tourism growth; offers combination of medical + holiday
Fundamental Factors
Strength of Leading Destinations Thailand Pioneer & leader industry leader with established reputation. In 2009; 1.4 M medical tourists generating US$2 billion Singapore Over 600K medical tourists generating US$1.4billion with reputation for high quality and advanced care India & Malaysia Emerging with over 450K & 300K tourists respectively. Attractive to regional consumers
High Quality of Service Associated with Asian Culture
Attractive Holiday environmentfor Post-surgery Recovery
Availability of Alternative Medicine/Treatment
Framework of Report
Describe framework and criteria in assessing opportunities
35
36


Framework and Criteria for Assessing Partnership Opportunity
Criterion for Screening Healthcare Cluster
Ranking of Potential Healthcare Cluster Opportunity Recommendations for Shortlisted
37
Framework and Criteria for Assessing Target Sites for Partnership Opportunity
Opportunities will Undergo Two Levels of Screenings
Screened to ensure Opportunities meet

Healthcare Cluster as well as Eco-city Development Criteria before Financial Modeling for Investment Return
Potential Healthcare Cluster Sites
Shortlist HC Sites
HC+ Eco Ready Sites
Potential Opportunities
Screened for Healthcare Cluster Criteria

* In this paper screening for this criterion list shall only be done at the Country level.
Screened for Eco-City Criteria
Screened for Investment Return
Criterion for Screening Healthcare Cluster Capabilities for Target Site

Healthcare Cluster as the Core Economic Theme
Healthcare Services as the Core Cluster must

drive sufficient economic activity to support & sustain the development of an integrated urban city
Healthcare Cluster Components
Criterion for Screening Healthcare Cluster Capabilities for Target Site

Criteria
Govt Public HC Funding Supporting Policies HC Insurance Coverage External Assistance (NGO) Regulatory HC Industry Market Value Growth HC Technology Platform HC Delivery Infra HC Comp Competitiveness HC Supply Chain HC R&D HC Workforce Global Interaction HC Investors HC Consumers Supporting Private HC Funding Foreign Investments Per capita spend Demand for HC Education & Training HC Financing L L L L L L L L L L L L L L L L L L L L
Assessed Capabilities
M M M M M M M M M M M M M M M M M M M M H H H H H H H H H H H H H H H H H H H H HH HH HH HH HH HH HH HH HH HH HH HH HH HH HH HH HH HH HH HH
HH- World-class


Ranking of Potential Healthcare Cluster Opportunity

Summary of Market Opportunity for Healthcare Sectors
Recommendations for Shortlisted
41
Summary of Assessment of Healthcare Sectors
Healthcare Sectors
Govt
HC
Industry
HC
Competitive
HC
Consumer
HC
Investor
Support Svcs
M
Vietnam Malaysia Thailand India
HH M H HH M
HH M HH HH H
H M M H M
H H H H H
H H H H H
M H H M
Ranking of Potential Healthcare Opportunities(1) China (2) Thailand (3) Malaysia (4) Vietnam
Country
Govt
HC
Industry
HC
Competitive
HC
Consumer
HC
Investor
Support Svcs
China Vietnam Malaysia Thailand India
M M H H M
HH M H HH M
HH M HH HH H
H M M H M
H H H H H
H H H H H


Ranking of Potential Healthcare Cluster Opportunity Recommendations for Shortlisted
44
Recommended Shortlist for Consideration
Project Must Also Consider What Value-add Partner Brings
Re-matching Market Opportunity with

Potential Value-add results in a Adjusted Ranked Recommended List
Country
Market Opportunity Ranked
Final Ranking with input
China Vietnam Malaysia Thailand
1 4 3 2
1 2 3 4
China Offers Opportunity to Create a World-class Health Services Cluster and Aged Care Community
Leverage on Chinas Competitive Strengths to Create World-class Cluster
Partner can bring Global biotech+healthcare

management , IT strengths to play to create Chinas most advanced health delivery infrastructure & care services
Create Chinas 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 Hainan Create environment for high-end aged care homes and wellness care facilities

Asia - Healthcare - Opportunities 2011 and Beyond

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Coming Challenges for Healthcare in Asia

Potential Opportunities 2011 & Beyond

Section OneChallenges Facing Global Healthcare

Section TwoFuture Scenarios for Asias Healthcare Industry

Section ThreeAssessing Partnership Opportunities

Detailed Agenda of Report

Section OneChallenges Facing Global Healthcare

Multiple Impact on Global Healthcare

Healthcare Spending: Large Differences, Unequal Results

Rise of Healthcare Consumers

Opportunities for Global Public & Private

Trend One: Ageing World Populace

Global Healthcare 2050

Trend Two: Rising Global Healthcare Costs

Trend Three: Unequal Distribution of Healthcare Capabilities

Old-age dependency ratios will increase

Two most significant factors driving

Major Factors Driving Medical Costs

Expectations of medical cost trend over the next 5 years

Significant factors driving medical costs per person

Trend 3: Unequal Distribution of Healthcare Capabilities from Developed to Emerging Nations..

Developed nations confronted with demands

Access to Medications & Technology

Source: WEF Report 2010

Detailed Agenda of Report

Section OneChallenges Facing Global Healthcare

Multiple Impact on Global Healthcare

Healthcare Spending: Large Differences, Unequal Results

Rise of Healthcare Consumers

Driving increased National Healthcare

Global Healthcare Industry

- Changes in demand for healthcare services - Shift in provision of healthcare services

Healthcare Industry Sectors

- Geographic shift in location of healthcare players - Consolidation/growth in different healthcare sectors

Developed economies will see 30%-50%

Increased Public Spending on Healthcare

Integration of Healthcare Delivery

Projected Increase in Public Spending on Healthcare in Developed Nations in 2050

Major Chronic diseases that now accounts for

Top 3 Upcoming Chronic Diseases

Change in Kind of Healthcare Required

Top 3 conditions causing highest prevalence of claims over next 5 years

Advancements in wireless, device technology

mHealth Potentially Disruptive

In-Home Monitoring/ Online Healthcare

Impact 3: Global Healthcare Industry Focuses on Growth in Asia

Increasing Demand from Asia Driving Focus of Global Healthcare MNCs

China expected to become 2nd largest Pharma

Healthcare Reforms & Investments

Migration of Global R&D

Chinas CRO Market forecast to grow significantly

Source: Goldman Sachs; Healthcare CROs

Detailed Agenda of Report

Section OneChallenges Facing Global Healthcare

Multiple Impact on Global Healthcare

Healthcare Spending: Large Differences, Unequal Results

Rise of Healthcare Consumers

Healthcare Spending Large Differences but Unequal Results

Higher Spending on Healthcare does not necessarily prolong lives

Exposes inefficiencies in respective nations

Life Expectancy In Years

Reduction of US Healthcare costs