The Rise & Impact of the ASEAN Economic Community (AEC)

Focus: Healthcare

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From a regional security forum, ASEAN has become the driving force

behind economic integration

1967: Original aimscooperation in the economic, social, cultural, technical, educational and other fields, and in the promotion of regional peace and stability

2015: Original aims maintained but vision enhancedA community comprised of three pillars:1. ASEAN Political-Security

Community2. ASEAN Economic

Community3. ASEAN Socio-Cultural

Community.

2020: ASEAN Vision 2020 An integrated and liberalized region in terms of the trade of goods, services, investments, and capital.

ASEAN 2020: A Partnership in Dynamic Development

Deadline for Non-Tariff Barriers within ASEAN to be eliminated

ASEAN Timeline

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3

Related events impacting healthcare delivery within this context

Full implementation of the AEC; e-commerce, logistics, tourism, HC

Trade Regulatory

ASEAN MDD – harmonised medical devices registration framework

Indonesia’s JKN (UHC by 2019); Philippines UHC Act. Vietnam’s UC Masterplan

Manufacturing Demographics

Government’s priorities in pharmaceutical, medical devices, clinical research

Aged care, chronic diseases; Singapore’s Healthcare 2020 Masterplan

Access

From a public health perspective, Government’s are faced with an uphill task of

providing quality healthcare access balanced with spend

Total healthcare expenditure in South East Asia

has grown at ~12.4% CAGR (2010-2014)

in comparison to 5.4% in global spend. . .

The upward trend continues

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Healthcare Expenditure per Capita remains way below global average in most

countries despite double digit increase in total expenditure

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• Thailand has highest

% of public spending

• Private contribution

highest in Cambodia,

Indonesia, Myanmar

• Public focus on

infrastructure,

infectious diseases,

preventive health,

MDGs.

Healthcare Expenditure per Capita in South East Asia, 2014

Healthcare Resources continue to be a challenge

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Number of Nurses per 1,000 population in South East Asia, 2012 (or latest available year)

Number of Hospital Beds per 1,000 population in South East Asia, 2012 (or latest available year)

Infrastructure investment continues to support healthcare access goals

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Growth in Hospital Infrastructure in Selected South East Asian countries (2013 and 2019F)

Country

Number of hospitals Number of hospital beds

2013 2019CAGR

(2013-2019)2013 2019

CAGR(2013-2019)

Indonesia 2,247 3,225 6.2% 278,450 319,200 2.3%

Malaysia 363 386 1.0% 57,470 63,533 1.7%

Singapore 25 30 3.1% 10,969 14,148 4.3%

Thailand 1,377 1,373 (0.05%) 147,400 170,460 2.5%

Private hospitals arelooking to increasetheir bed capacityvia the expansion ofexisting facilities orconstruction of newhospitals.

Public hospitals in the region set to increase as governments aim to reduce burden on existing facilities; provide better access to hospital services for poor and rural areas

Vietnam offers infrastructure oppsmainly in private sector. Myanmar and Cambodia in early stages of development for both public and private sector

Regulations are continuing to evolve

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100% 100% 100% 100%

80%

67%

50% 49%

40%

30%

0%

50%

100%

Singapore Vietnam Cambodia Laos Myanmar Indonesia Brunei Thailand Philippines Malaysia

Fo

reig

n o

wn

ers

hip

Maximum Foreign Ownership in Hospital Services in South East Asia Increasingly various member nations ofASEAN are taking steps to promote foreigninvestment in the healthcare sector

Indonesia: 2014 updated negative list:Allows foreign investment in this sectorthroughout the country; removes 200-bedminimum requirement for specialist/sub-specialist hospital services; South East Asiainvestors in the specialist/sub-specialisthospital services sector, the ownership capis 70% for investments in Eastern Indonesia.

Myanmar: Revised its foreign investment lawwhich provides an 80% cap on foreignownership for hospitals and clinics.

Philippines: Public-Private Partnershipprogramme allows private groups to finance,design, build, operate, and maintain a hospital fora maximum period of 25 years, after which thehospitals would be turned over to the Dept ofHealth.

Malaysia: Plans to open up the private hospitalservices sector to 100% foreign equityparticipation (from 30% for WTO members and70% for ASEAN members). Includes specialisedmedical and dental services sector, whichpreviously prohibited foreign equity participation.

Medical Devices: Largely an import dependant region

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Country

Medical device market (US$ million) Value of imports to meet the

domestic market (2013)

Proportion of domestic

market met by imports (2013)

2013 2019F CAGR (2013-19)

Indonesia 678 1,375 12.5% 647 95%

Malaysia 1,359 3,330 16.1% 1,173 86%

Philippines 297 518 9.7% 244 82%

Singapore 466 1,038 14.3% NA NA

Thailand 1,200 2,484 12.9% 1,009 84%

Vietnam 730 90%

Supply chain & distribution;

e-procurement

Regulatory initiatives

Local manufacturing,processes, factoryautomation, increasing insupply chain efficiency,operations

Use of technology in enabling access is in early stages of development

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m-Health solutions that canshow improvements in overalloutcomes, linked to diseaseimprovement and cost savings

Health monitoring for patients in

rural areas, including post acute

care, follow on care

Support for eHealth initiatives

started by various governments

in SEA

Telemedicine solutions that help

improve healthcare delivery for

communities in rural and remote

areas

The Eastern Health Alliance (EHA), Philips Healthcare

and Changi General Hospital (CGH) are piloting a new

telehealth programme for healthcare professionals to

remotely monitor the recovery of patients with heart

failure

Through the Philippines e-Health Strategic Framework

and Plan (PeHSFP), Philippines is planning to deploy

RxBox2 in rural health units and city health offices

The Healthcare Wellness and Aging Panel of A*Star’s

Science & Technology Value Creation (STVC) 2015 has

identified remote health monitoring as one of the high

priority areas for research

Still a relatively young region, aging is a future issue

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0.4 15.1

248.6

6.829.7

51.0

98.4

5.4

67.0

89.7

0.416.5

267.9

7.6

32.053.4

108.9

6.3

68.2

95.5

0

75

150

225

300

Brunei Cambodia Indonesia Laos Malaysia Myanmar Philippines Singapore Thailand Vietnam

Po

pu

lati

on

(m

illi

on

)

2013 2019 CAGR 2013-2019F

1.6%

1.5%

1.3%

1.9% 1.3%

0.8%

1.7%

2.6%

0.3%

1.1%

3.6% 3.8%5.0%

3.9%5.0% 4.9% 4.6%

11.1%

7.1% 6.8%

4.6% 5.0%6.2%

4.1%

6.8%6.0% 6.0%

17.3%

9.7%9.0%

0%

10%

20%

Brunei Cambodia Indonesia Laos Malaysia Myanmar Philippines Singapore Thailand Vietnam

Pro

pro

tio

n o

f p

op

ula

tio

n a

ge

d

65

ye

ars

an

d o

ve

r

2010 2020F

Global average : 8.0%

Proportion of Population Aged 65 Years and Over in South East Asia, 2010 and 2020F

Total Population and Population Growth in South East Asia, 2013 and 2019F• Products and services

to assist with ageing inplace; independence athome

• Training services fornurses and personnelto deliver care to theelderly at home,geriatric care

• Development andmanagement of seniorliving facilities:Collaborations fordevelopments;operational,management servicesfor senior living homes,retirement houses,aged care facilities andnursing homes.

The ASEAN Way Forward: Though the formation of EU-like initiatives such as

the Bologna process, Europol, and the Banking Union are still far away, slow and

incremental progress is made towards the ASEAN Vision

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The current reality of the millions of currently impoverished Southeast Asians is out of sync

with the ASEAN 2020 vision, but the ASEAN 2020 Vision will be helping ASEAN to move

towards this to achieve it somewhere in 2030-2040

ASEAN 2020 Vision

Nations being

governed with the consent and greater participation of the people

Vibrant and open societies

Equitable access to opportunities for total human development

Water and food security

Energy securitySocially

cohesive and caring

Technologically competitive

Strong networks of

scientific and technological

institutions and centers of excellence

Clean and green

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