Coming Challenges for Healthcare in Asia

Potential Opportunities 2011 & Beyond
May 2011
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Framework of Report
Provide Overview & Key Logic of Report Leading to Options

Section OneChallenges Facing Global Healthcare

Section TwoFuture Scenarios for Asia’s Healthcare Industry

Section ThreeAssessing Partnership Opportunities

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Detailed Agenda of Report
Provides background to key forces challenging global healthcare

Section OneChallenges 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
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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 .Global Healthcare Faces Increased Pressure from the Triple Convergence of Major Trends ..

ratio of aged population vs working-age population) .e.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.

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 .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.Trend 2: Rising Global Healthcare Costs Expected to Continue in Coming Years Albeit at Lower Growth rate 2010.

However major drug patents expiring 2015 Expensive modern diagnostic systems unavailable to most nations Structural mismatch. 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.Trend 3: Unequal Distribution of Healthcare Capabilities from Developed to Emerging Nations.emerging nations with young populace but lacked trained talent vs developed nations faced w limited workforce Source: WEF Report 2010 ..

Unequal Results Case Study: US Healthcare System Rise of Healthcare Consumers 9 .Detailed Agenda of Report Provides background to key forces challenging global healthcare Section OneChallenges 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.

Changes in demand for healthcare services .Increased GDP allocation to national healthcare .Consolidation/growth in different healthcare sectors .Geographic shift in location of healthcare players .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 • .Shift in provision of healthcare services • Healthcare • Industry Sectors .Drive for system integration Convergence of TripleTrends Global • Healthcare • Industry .

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 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 Healthcare’s share of GDP by 2050.

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. cardio is expensive & requires new medical resources. cancer.e. 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 . higher cost medication.

Allows preventive care & reduces emergencies. 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.Impact 2B: Global Healthcare Industry Faces Shifts in the Provision of Services Advances in Technology & Devices Shifts Service Provision • Advancements in wireless.

Healthcare CROs . 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 • China’s CRO Market forecast to grow significantly Source: MOH Source: Goldman Sachs.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.

Detailed Agenda of Report Provides background to key forces challenging global healthcare Section OneChallenges 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 .

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 .Healthcare Spending – Large Differences but Unequal Results Higher Spending on Healthcare does not necessarily prolong lives • Exposes inefficiencies in respective nation’s healthcare spending and policies.

Case Study: US Healthcare Costs Breakdown Shows Excessive Spend on Out-patient care. 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 .. Admin and Medical Goods.

Detailed Agenda of Report Provides background to key forces challenging global healthcare Section OneChallenges 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 .

TCM.. alternative treatment regimes i.Rise of Healthcare Consumers Open New Opportunities and NonConventional Approaches to Meeting Healthcare Needs. Options Consumers interested in home or self-monitoring devices. 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.e. 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. travel to seek better healthcare • Home Monitoring Devices • Homecare network • Medical Tourism . doctors and health plans. Consumers Increasing Desire to Manage Healthcare Needs • Consumers in Developed Nations Seeking Information.

Framework of Report Provide Overview & Key Logic of Report Leading to Options Section OneChallenges Facing Global Healthcare Section TwoFuture Scenarios for Asia’s Healthcare Industry Section ThreeAssessing Partnership Opportunities 20 .

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the World’s Largest Medical Tourism Destination Drivers of Outbound Medical Tourism Fundamental Factors Favoring Growth 22 .Detailed Agenda of Report Layout scenarios for healthcare in Asia due to global changes Section TwoFuture 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.

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 .

Detailed Agenda of Report Layout scenarios for healthcare in Asia due to global changes Section TwoFuture 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 .

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. Singapore.Doctors + Nurses (Philippines & Indonesia already provide pool of trained nurses. 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 Pharma’s outsourced R&D Pool for Outsourced Medical Admin & Services.Call-centers. database admin (India & Philippines already building significant pool) . the young populace in Asia offers an alternative source of trained healthcare workforce Transforming Asia’s Talent Pool Partnerships with Nursing Institutes • Pool for Medical Professionals.

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. Sunway Medical (MY) Source: WHO 2010 . Bangkok Dusit (TH).Parkway (SG).

Josef Woodman Oct 2009 .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 Thailand’s 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.

the World’s Largest Medical Tourism Destination Drivers of Outbound Medical Tourism Fundamental Factors Favoring Growth 28 .Detailed Agenda of Report Layout scenarios for healthcare in Asia due to global changes Section TwoFuture 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.

Asia’s Role in a Globally Integrated Healthcare System – R&D 2050 Asia. Device R&D Identify Drug Tgts Identify Drug Tgts Identify Drug Tgts INDIA Drug Discovery PreClin+ Clinical Med. Device Production Healthcare IT software .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 Healthcare IT software Drug Discovery PreClin+ Clinical Med. Device R&D Med.

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 . Database Mgt. Service Centers Comms with Medical experts.Asia’s Role in a Globally Integrated Healthcare System – Service Delivery 2050 Asia – Hub for Selective Surgery+ Aged Hospice Care+ Service Support • Network covers Admin.

Detailed Agenda of Report Layout scenarios for healthcare in Asia due to global changes Section TwoFuture 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 .

Vietnam. China.Asia. Taiwan Partnerships with Leading US-based Medical Institutions * Profiles of Leading Asian Healthcare Providers .as even more Asian-based destinations enter the market i.e.World’s 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.

over 750K US residents travel annually for medical tourism. 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: Thailand Within Asia Regional travellers taking advantage of cheap flights and higher quality serviceIndonesians.Medical Tourism in Asia. Preferred destination: India US Seeking lower cost healthcare.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. Japanese Source: American Medical Association . Chinese.

1.Medical Tourism in Asia.4billion with reputation for high quality and advanced care India & Malaysia Emerging with over 450K & 300K tourists respectively. In 2009.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. Attractive to regional consumers High Quality of Service Associated with Asian Culture Attractive Holiday environmentfor Post-surgery Recovery Availability of Alternative Medicine/Treatment .4 M medical tourists generating US$2 billion Singapore Over 600K medical tourists generating US$1.

Framework of Report Describe framework and criteria in assessing opportunities Section OneChallenges Facing Global Healthcare Section TwoFuture Scenarios for Asia’s Healthcare Industry Section ThreeAssessing Partnership Opportunities 35 .

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Detailed Agenda of Report Describe framework and criteria in assessing opportunities Section ThreeAssessing Partnership Opportunities 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 .

World-class .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.

Detailed Agenda of Report Describe framework and criteria in assessing opportunities Section ThreeAssessing 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 .

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 .

Detailed Agenda of Report Describe framework and criteria in assessing opportunities Section ThreeAssessing Partnership Opportunities Framework and Criteria for Assessing Partnership Opportunity Criterion for Screening Healthcare Cluster 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 China’s Competitive Strengths to Create World-class Cluster • Partner can bring Global biotech+healthcare management .Zhuhai/Hainan Access to Univ. IT strengths to play to create China’s most advanced health delivery infrastructure & care services Create China’s first World-class Health Delivery Service Hub Site Preferred Location to Tap on Access to Global Medical Tourism. 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 .

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