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Healthcare Sector Current Market Trends and Opportunities in Healthcare
17 October 2018
Shaveen Sharma
Director of Business Development &
Market Access
British Chamber of Commerce
Indonesia
dr. Andi Saguni, MA
Ministry of Health of the Republic of
Indonesia
Dr. Widiastuty Wibisana, Ph.D
Indonesia Hospital Association
(PERSI)
A country too big to ignore Indonesia is the world’s 4th most populous country and the largest in South East Asia. 260 million
people – 43% of the country’s population in under the age of 25.
The ONLY permanent SEA member of the G20, well-positioned to influence global and regional
initiatives.
Indonesia represents around 40% of the total GDP of ASEAN, with GDP growth rose to 5.1% and
reached $3.243 trillion in 2017 and projected to grow 5.3% in 2018 (PWC).
Indonesia’s middle class is growing rapidly and is the biggest in Southeast Asia. Number of families
with household income exceeding US$ 10,000 is expected to double by 2020.
Indonesian market is very receptive towards new innovations.
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• ASEAN’s economy is currently ranked theseventh largest in the world, with a combinedGDP of US$ 2.4 trillion and is projected to rankas the fourth largest economy by 2050.
• The World Bank has stated that for 2018 “theeconomic outlook for the region remainspositive and will benefit from an improvedexternal environment as well as strongdomestic demand.”
• In 2016, UK-ASEAN trade increased by 9.1%and went above £30 billion for the first time.
• In 2017, UK is the 2nd largest European investorin ASEAN .
• Trade surplus of goods in Indonesia with ASEANincreasing from US$ 7.67 billion (2015) to 9.09billion (2016) and 11.65 billion (2017).
$ 2.4 Trillion
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ASEAN ECONOMIC COMMUNITY (AEC)
Ease of Doing Business Index 2018
#72 of 190 Countries (2018)
# 91 of 190 (2017)
#106 of 187 (2016)
#6 in ASEAN
Logistic Performance Index 2016
#63 of 160 Countries (2016)
#53 of 160 (2014)
#59 of 155 (2012)
#4 in ASEAN
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INDONESIA IN THE WORLD RANK
Global Competitiveness Index 2017
#36 of 137 Countries (2017)
#41 of 138 (2016)
#37 of 140 (2015)
#4 in ASEAN
Complicated and long registration process
Uncertainty in the legislative and regulatory environment
Infrastructure: Lack of infrastructure causes logistics issues
Human Resources: Lack of skills needed by industries
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CHALLENGES TO INVESTING IN INDONESIA
Overview of Healthcare Sector in Indonesia
By 2025, Indonesia healthcare expenditure expected to rise up to US$363 billion,
a CAGR of more than 20% compared to 2010 (Roland Berger).
In 2017, Indonesian government allocated US$ 7 billion for healthcare sector
spending (5% of total budget, 43% year of year increase).
95% of Indonesia’s medical equipment and devices are imported.
Following a graduated scale-up in implementation of the National Health
Insurance (Jaminan Kesehatan Nasional/ JKN), by 2019 the program will cover all
Indonesians, making it the biggest healthcare system in the world (267 million
people).
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TOP 10 COUNTRY SOURCES FOR INDONESIAN PHARMACEUTICALS IMPORT
1. Switzerland 6. Singapore
2. Germany 7. UK
3. USA 8. Netherlands
4. Denmark 9. Belgium
5. France 10. Italy
Overview of Indonesian Hospital Classification for Public Hospitals:
Hospital level A: provides extensive specialist medical services and extensive sub-
specialist.
Hospital level B: provides extensive specialist medical services and limited sub-
specialists.
Hospital level C: provides at least a minimum of four basic specialist medical services
(surgical, internal, child, and maternity).
Hospital level D: provides at least basic medical facilities.
Classification for Private Hospitals:
Private General Hospital at Priority level: provides general medical services as well as
specialist and sub-specialist care.
Private General Hospital at Madya level: provides general services and minimum of four
specialist care services.
Private General Hospital at Pratama level: provides only general medical services.
Bed Occupancy Rate (BOR) remains low in Indonesia (60% - 85%) compared with other
countries, like Singapore (approx. 90%) and Vietnam (approx. 170%).
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Number of Hospitals in Indonesia Based on Their Administrator
No. Administrator 2014 2015 2016 2017
1. Ministry of Health 14 14 14 14
2. Police 42 42 42 44
3. Indonesian Army Force 121 120 119 120
4.Other Ministries and State Owned Enterprises
65 61 67 14
5. Provincial Government 52 68 75 87
6. District Authorities 456 466 477 504
7. City Authorities 81 87 87 81
8. Private 1024 1093 1164 1334
Total 1855 1951 2045 2198
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Source: Global Business Guide Indonesia
NEGATIVE INVESTMENT LIST FOR HEALTHCARE SECTOR IN INDONESIA
Opportunities in Healthcare for UK Companies
• Why now?
• A number of hospitals and other healthcare operators have
formed alliances with foreign companies with a view to
tapping their capabilities and expertise in the provision of
healthcare services.
• Due to lack of domestic manufacturers, there are profitable
opportunities for overseas companies willing and able to
supply medical and surgical devices to Indonesia.
• The implementation of national health care programme or
Jaminan Kesehatan Nasional (JKN) has already prompted
soaring demand for more hospitals and clinics as well as the
staff, technology, pharmaceuticals and supplies for them.
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• UK healthcare manufactures opportunities:
o Medical and surgical devices
o Healthcare professional training and education
o Health food supplements
o Healthcare IT system
o Generic pharmaceuticals
http://www.bps.go.id/download_file/SP2010_agregat_data_perProvinsi.pdf
INDONESIA DEMOGRAPHIC MAP
Year 2018 :
Total Population : 265 million
Number of Hospitals : 2.825
Number of Health Centers : 9.909
Number of Pratama Clinics : 7.641
Number of Utama Clinics : 969
(15 October 2018)
Healthy Paradigm
Program• Mainstreaming of health on the
development• Promotive -preventive as the
main principles on health care provision.
• Community empowerment
The health care Strengthening
Program• The improvement of access on the
primary health system• Optimization of existing referral
system• Quality improvement
The National Health Insurance
Program• Benefit• Financing system: Insurance –
sharing cost and risks• Cost and quality control• Targets: all Indonesians
To prove the participation on the schemeIndonesia’s health card (KIS)
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INDONESIA HEALTH PROGRAM
The implementation continuum of care approach
Health risk based Intervention.
ACCESS & QUALITY OF HEALTH
INFRASTRUCTURE INCREASED
SUPPLY SIDEFULFILLING
FOR THE ACCESS
HEALTH FACILITIES’ QUALITY
FAIRNESS/EQUITY PHC’S FOR UNDER DEVELOPED
AREAS COMMUNITY HOSPITALS /
BORDER HOSPITALS HOSPITALS DEVELOPMENT IN
THE EASTERN INDONESIA
FULFILLMENT RATIO OF FACILITIES TO POPULATION: PHC’S, PATIENT’S
BED IN HOSPITALS, CRITICAL ROOM, ETC
Optimizing Government Budget for Health, PPP,
Other Source
FRAMEWORK OF INCREASING THE ACCESS & QUALITY OF HEALTH INFRASTRUCTURE
STRENGTHENING THE GUIDELINE FOR HEALTH FACILITIES
ACCREDITATION
1.Strengthening competence of 14
provincial hospitals as national
referral
2.Strengthening competence of 130
regional & provincial referral
hospitals
3.Providing 27 Community Hospitals
4.Development 3 new vertical
hospitals in Eastern part of
Indonesia (Maluku, Papua, NTT).
INCREASING THE ACCESS TO REFERRAL HEALTHCARE (2015-2019)
Referral SystemHospitals
Disparity of the hospital distributionsBeds patient shortage Lack of referral services (radiotherapy/cancer, heart, hemodialysis, dll)
Hospital competance (specialist shortages & maldistribution, under maintain facility , equipment etc)
3rd Level Services capacityICU, ICCU, PICU, NICU
Quality of the services17
CHALLENGES
PROSPECT FOR HEALTHCARE INVESTMENT IN INDONESIA
Public – Private Partnership (PPP) : President Decree No. 38 Year 2015, MoH Decree No. 40 Year 2018 in providing healthcare infrastucture (building, medical devices, services)
E-Katalog / e-purchasing
No Health Services Business Sector Requirements
1 Hospital a. Maximum Foreign Investment 67%
b. A maximum of 70% for investors from ASEAN countries;
c. Can be done throughout the Capital of the Province of
Eastern Indonesia except Makassar and Manado
2 Clinic of Specialized Medical Services (CPC 9312),
Specialist Dental Clinic (CPC 9312), Nursing Services (CPC
93191)
a. Maximum Foreign Investment 67%
b. A maximum of 70% for investors from ASEAN countries;
c. Can be done throughout the Capital of the Province of
Eastern Indonesia except Makassar and Manado
3 Acupuncture Service Facility Maximum Foreign Investment 49%
4 Medical and Ambulatory Evacuation Services Maximum Foreign Investment 67%
Health Status/Disease Burdenand Health System Approach
Governance
Financing
Devices
Drugs
HRH
Health Information
Service Delivery
Demographic-Epidemiology
Transition
Health StatusDisease Burden
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Unpublished INA data 2016: IHD – Stroke –TB – Diabetes – COPD – Diare – Alzheimer - Road Injuries -Lower Resp. Infection - Chronic Kidney Disease.
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257 millionpeople will need to be insured in Indonesia by 2019, when universal healthcare is fully established.
USD 363 billionis the national healthcare expenditure expected to rise by 2025; a CAGR of more than 20% compared to 2010 (USD 20 billion).
The rising middle class is expected to drive demand for affordable health care.
21.196Fasilitas Kesehatan Tingkat Pertama (FKTP/HEALTH
CENTERS/CLINICS)
2.230Fasilitas Kesehatan Tingkat Lanjut (HOPITALS AND SPECIALIST
CLINICS)
1.007 OPTICS
2.342 PHARMACIES
379 LABORATORIES182.036.673
TOTAL MEMBER OF JKN
NUMBER OF HEALTH FACILITIES SERViNG THE JKN
27.154
Sumber: BPJS Kesehatan Per 1 Oktober 2017
PROVIDER OF THE NATIONAL HEALTH SECURITY SYSTEM (JKN)
PROV. SULBAR
* 5 Provinsi dengan Rasio TT < 1:1000 penduduk (Jumlah Total TT di RS)
PROVINSI RIAU
PROV. LAMPUNG
PROV.JABAR PROV. NTB
Demand for More Hospital Beds
Indonesia is expected to add about 40,000 beds by 2019 and JKN would be a key driver; one of the early reports shows how the daily patient volume in some of the provinces jumped up after JKN initiation.
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Demand for Qualified and Skilled Healthcare Professionals
The already scarce medical professionals (doctors and paramedical staff), which are way below the global and Organisation for Economic Co-operation and Development (OECD) averages, will be put under pressure by the burden of the increasing number of JKN patients.
investors need to recruit and retain good doctors, in particular, specialists who play an important role in upholding the standard of care and reputation of a hospital, which are ultimately profit-drivers in the business.
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Demand for More Drugs (Generics)
As more patient get access to healthcare through JKN, demand for prescription drugs (generics) will grow; some companies have already preempted this and increased their production capacity to address the increased demand.
Up to 50% of the revenues of a hospital can come from sale of medicines to its patients. Pressure on margin from UHC patients affects manufacturers of generic drugs.
DISAMPIKAN PADA HOSPITAL EXPO INDONESIA, 21 OKTOBER 2016
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Demand for More Medical Equipment and Demand for More Diagnostic Tests
Demand for medical devices is expected to grow at much faster rate in the future as compared with thehistorical growth rate, especially for consumables and imaging devices.
Domestic consumption of following are expected to increase:• X-ray films• Consumables like gloves, chemicals, catheters• Computed tomography/magnetic resonance imaging (CT/MRI) equipment
and consumable associated with advanced imaging procedures
DISAMPIKAN PADA HOSPITAL EXPO INDONESIA, 21 OKTOBER 2016
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1. First-level outpatient services covered under JKN: Simple laboratorium diagnostic tests (blood tests, urine tests, stool tests, and blood glucose tests)
2. Market segments:o Immunochemistry testingo Microbiology testingo Molecular diagnostics testing (high growth area)
• Virology• Bacteriology• Molecular blood donor screening• Genetic testing
InVitro Diagnostics Market
GAMBARAN RUJUKAN PELAYANAN CATHLAB-JANTUNG
DISRIBUTION OF CATH LAB and CARDIOLOGICAL SERVICES, 2016
5
13
3
5 3
1 3
3
53
22 11 13
6 20 53
1
3
1
2
6
4
11
19
11
5
4
5
8
3
38
221
110
40
25
126
19 7 2
4
4
4
1
11
19 4
2
9
1
2
Total of Cath Lab: 199 Cath Lab in 171 hospital Total cardiologist = 758 (2015) --> 850 in 2016
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Thank You
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Do your research, make regular
visits
Getting the right local partner is a
key
Build a deep and long maintained relationship with
the locals
Follow market trends as consumers
‘taste’ easily challenges in
Indonesia
Price sensitiveBe prepared to
adapt and follow local etiquette
Expand networking as newest
information/regulation might come from ‘unofficial insiders’
Patience, it can take a long time
Start now !
MARKET ACCESS TOP TIPS
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• The OBNi provides market access support for export-focused British SMEs
• In 2015, BritCham Indonesia received accreditation from the British Chambers of Commerce
UK
• Accreditation provides quality assurance across a range of services that include but are not
limited to:
1. Trade mission management
2. Webinars / Video conferencing
3. Business opportunities and partners
4. Advice on local conditions, including competitors, regulation and standards
5. Market research
6. Pre-visit support, arranging appointments with target customers or potential business
partners/agents
7. Organisation of receptions, promotional events , for you to present your product or
service
British Business Centre
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• Visited 11 cities in Trade Mission to the UK to promote Indonesia to the UK Business Interests in 2018.
• From July 2017 to July 2018, we have assisted 39 UK companies on their visit program to Indonesia, assisted 246 UK companies for market access program across 30 business sectors and sub-sectors.
OPD Indonesia has…
Simon Ashby, Global Sales Manager of Bowman Power Group Ltd (middle) and Chris Wren, CEO of BritCham Indonesia (far right) have a chat with a visitor at Electric, Power and Renewable Energy Expo 2017 in Jakarta
BritCham had the pleasure of supporting Bowman Power Group Ltd - the world leader in power recovery within the power generation industry, who are currently scoping the Indonesian market for potential opportunities. Bowman wished for other UK investors to come and get down here in this IT savvy environment, to look for investment opportunity, expanding network or checking out the competitors.
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Electric, Power and Renewable Energy201725 -27 October 2017, JIExpo Kemayoran - Jakarta
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The GREAT Pavilion boasted five British F&B companies, whom had travelled from the UK especially for the expo and are making progress with their expansion in Indonesia. They are The Waterfalls Brand, Somerdale International Ltd, Tesco Plc and Cambridge Weight Plan.
The Waterfalls Brand talks to visitors at SIAL InterfoodExpo 2017 – the biggest F&B exhibition in Indonesia.
SIAL INTERFOOD Expo 201722-25 November 2017, JIExpo Kemayoran - Jakarta
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November 7, 2018, 15.30
Environmental
Chris Wren (Executive Director of BritCham Indonesia)
More info: [email protected]
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UPCOMING WEBINARS
THANK YOU !Facebook.com/Britchamindo Britcham_id
The British Chamber of Commerce in Indonesia
Britcham_id
The British Chamber of Commerce in Indonesia
Shaveen SharmaDirector of Business Development and
Market Access
British Chamber of Commerce Indonesia
WTC 5 / Wisma Metropolitan 1,15th Floor
Jend. Sudirman Street, Kav 29-31Jakarta 12920
+62 21 522 9453
Paul NorthUK-ASEAN Business Council
ASEAN Export [email protected]
12th Floor, Millbank Tower21-24 Millbank, London SW1P 4QP
+44 (0)7494 499728
dr. Andi Saguni, MA
Ministry of Health of the Republic of Indonesia
H.R. Rasuna Said Street, Blok X.5 Kav. 4-9, Blok A, 6th Floor
Jakarta 12950+62 21 522 3807
Dr. Widiastuty Wibisana, Ph.D
Indonesian Hospital Association (PERSI)
Crown Palace Blok E/6Prof. DR. Soepomo Street, No. 231
Jakarta 12870+62 21 8378 8722