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Transform Care Infographics March 05, 2015

Market Primer: Leapfrog to New Care Models in Southeast Asia

Head of Health & Life Sciences, Asia-Pacific, Oliver Wyman
Principal, Health & Life Sciences, Oliver Wyman

Oliver Wyman’s Health & Life Sciences Singapore-based team, led by Jeremy Lim, offers the following dispatch from the Asia Pacific Rim. They explain why it’s up to enterprising industry players and disrupters from the private sector to initiate new ways of providing and financing care to reach the masses in these huge, relatively unexplored markets:

Southeast Asia is a region with more than 600 million people and $2.4 trillion in combined GDP. Indonesia alone has 17,000 islands—stretching roughly the distance from the UK to Turkey—and with some 250 million people, the nation holds three quarters of the population of the United States. The region, at ~$3,500 GDP/head, is firmly within emerging market territory (with exceptions of Singapore and Brunei). With that comes the structural challenges and opportunities of urbanization, the rising middle class, increasing disposable income—and the desire for better healthcare.

The Asia Pacific healthcare market is largely underserved—the average spend on healthcare is only 3.9% of GDP vs. the double digits found in US and Europe, and the number of physicians able to deliver care ranges wildly from 1 per 15,000 in Timor-Leste to 1 per 500 in Singapore. A perfect storm is arising when these economics are combined with systems fundamentally designed for provision of acute care and rapidly increasing chronic disease rates—some 23% of Filipinos are hypertensive and 15% of Malaysians are diabetic, for example.

Despite the best intentions of governments, with each nation marching towards universal care in their own unique way, healthcare infrastructure can’t be built and professionals can’t be trained as fast as the clinical needs demand. Models and mentalities will need to change and readily deployable solutions today are few and far between. Further complications include limitations in financing models and infrastructure support.

Like the nations and cultures of this region, there is great diversity in the quality and supply of healthcare—Malaysia with strong group insurance; Philippines with an HMO-dominated market; Indonesia with excellent electronic claims processing; Thailand with a robust, quantitative, and comprehensive public system; and Singapore leading the way in operating models and quality. There are untold lessons to be learned from each market.

The questions being asked now are designed to speed up all of this cross-geography and segment learning: Where are the unmet clinical and service needs? What opportunities are there for change, what commonalities exist, and what are the best practices? With the known shortages in specialists and hospital beds, how can we push care towards primary care, emphasizing prevention and empowering the general practitioner as a gatekeeper? How should they be financed? What logistic, regulatory, and societal challenges would they face?

A current initiative, for example, involves understanding how global pharmaceutical companies can play a greater role in expanding access to healthcare, especially in chronic disease management. While providers, payers, and the services that support them are generally open to partnerships, new ideas, and experimentation, few have any concrete ideas of what that partnership could and should look like.

Another engagement looked at a similar question but from the perspective of a regional general insurer. In this case, how could private health insurance best play a greater role in broadening access to care in near, mid, and distant time horizons? In which markets would it make sense to take a first step?

These challenges generate exciting potential and open up opportunities in the market to leapfrog to new models of care. Given constrained budgets and an abundance of caution in the public sector, it will have to be enterprising industry players and disrupters from the private sector that initiate new ways of providing and financing care to reach the masses in these huge, relatively unexplored markets.

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