Tag: health care

  • Indonesia’s health care industry is on the rise

    Indonesia’s health care industry is on the rise

    Data from WHO Global Health Expenditure Database has revealed that, in 2014, Indonesia’s spending on health care totaled only 2.8 percent of GDP. Compared to the global average of 9.9 percent, it goes without saying that our nation’s total expenditure for health is among the lowest in the world.

    Full implementation of National Health Insurance (JKN) is targeted for 2019 and was initially been seen as the main catalyst to the country’s growth in the health care industry.

    Nevertheless, the initiative saw a challenging launch and, thanks to regulation disparities, poor infrastructure, inadequate medical staff and ultimately funding shortfalls, many analysts maintain their doubts that the program can achieve its main objective, covering 260 million Indonesians by 2019.

    While the pain experienced by the majority of Indonesians dealing with Indonesia’s health care may continue to grow for some time, this is a necessary journey toward success and all the bumps can be read as signposts on the road that the nation must travel to higher-income status.

    The government has maintained the JKN program as a top priority; hence, the challenges will eventually be overcome.

    Moreover, the spark generated by the government’s boost to the health care sector is creating abundant opportunities for all to prosper.

    Substandard health care service in Indonesia represent investment opportunities and records have shown surging demand for health and medical services since the JKN program rolled out.

    In recent years, Indonesia’s conglomerates have started consolidating and investing heavily in the hospital business.

    The likes of Siloam (backed by Lippo Group) and Mitra Keluarga (affiliated with Kalbe Farma) are leading players in Indonesia’s hospital industry. Both have aggressive growth strategies.

    According to a report by the Oxford Business Group, Siloam plans to reach total capacity of 10,000 beds with 22 new hospitals coming online by 2017, while Mitra Keluarga has raised US$372 million through one of the largest initial public offerings (IPO) in recent years, the funds will be used to expand its hospital network to 18 by 2020.

    Foreign players also find Indonesia’s market very captivating. Foreign investment limits in the hospital business have recently been revised to a level of 67 to 70 percent, so more international hospital groups can be expected to leave their footprint in Indonesia soon.

    The limits in the pharmaceutical industry are even higher: 85 percent, and given the estimation that 20 percent of total health expenditure will be allocated to pharmacy products, it was not an exaggeration when in 2015 Frost and Sullivan named Indonesia as “the most promising emerging market for pharma”.

    Another area that represents an exciting prospect for investment is stem cell therapy, already an important health commodity in countries like Russia, China and India.

    While this is certainly a new area for most investors, the potential revenue is huge, surpassing $18 billion according to a study by the Prodia Group.

    Along with economic incentives, this area will promote greater international collaboration that will be useful in the advancement of medical technology in Indonesia.

    Perhaps the talk of positioning Indonesia as one of the world’s leading destinations for medical tourism is not a wild dream anymore.

    Indonesia may be playing catch up for now to the likes of Singapore and Malaysia in ASEAN, nonetheless, it is not too late to start gaining credibility in international markets like Australia, where higher medical costs may force patients to search for more affordable, but still reliable, treatment overseas.

    Indonesia’s health care providers, hence, must prepare themselves to conform to international standards in order to win the hearts of potential foreign patients.

    Indonesia’s health care industry is expected to be worth more than $50 billion by 2020. With the influx of foreign players and the race of local players to shift gear in preparation for faster growth, the government must take an active role to ensure the upgrades to the nation’s health care are beneficial for all people of all statuses.

    Various investments in the industry must make health care more affordable and accessible, especially for those in less developed parts of Indonesia.

    In addition to the primary benefit of delivering adequate health care to the people, the government must also ensure the “side effects” that could potentially also have a larger impact on society in the long run.

    Multinational medical companies operating in the domestic market should be persuaded to develop in-country research and development centers and collaborate with local universities to train capable future human resources.

    Even the tech and startup industry can make the most of this bloom by exploring various value-added services that offer faster information access, easier interaction, better and strong enough to disrupt the industry.

    This wave has already started with the creation of medical portals, real-time health trackers and even the utilization of artificial intelligence that can help medical practitioners diagnose patient health.

  • Singapore-based Luye Medical Group Completes Acquisition of Healthe Care, Australia’s Third Largest Private Healthcare Group

    Singapore-based Luye Medical Group Completes Acquisition of Healthe Care, Australia’s Third Largest Private Healthcare Group

    On April 18, 2016, Australia’s third largest private healthcare group, Healthe Care, officially became a member of Luye Medicals Group Pte Ltd (Luye Medical Group) after the acquisition from Australia’s Archer Capital Fund was completed. Through the acquisition of Healthe Care, Luye Medical Group has leapfrogged into the ranks of one of the largest international private medical groups in the region.

    Healthe Care will continue to expand its business operations in the Australian market, and work closely with Luye Medical Group to expand its footprint and building high quality healthcare services in Singapore, China and the other Asian countries.

    In the China market, driven strongly by aging population and emerging healthcare friendly policies, the China healthcare market has accelerated its development. According to statistics, the market size of China’s healthcare industry is approximately US 280 billion dollars and the compound annual growth rate of hospital income during 2009 to 2013 was 20%, of which that of private hospitals was as high as 28%. However, due to lack of adequate policy support and infrastructure, it has been difficult for private hospitals to specialize and extend its services to a wider population, resulting in the fact that Chinese private healthcare providers only cover about 10%(1) of the total patients population, notably lower than the 20% to 30% target(2) set by the government. Luye Medical Group believes that the acquisition of Healthe Care will greatly enhance its capabilities in China, enabling it to deliver high quality healthcare services with international standards.

    Mr Choo Kin Poo, Group Vice President, Strategy Planning & Business Development, Operations said: “This is our largest acquisition so far. As a medical group headquartered in Singapore with assets overseas, having Healthe Care on board will allow us to build on our business strategy and plans to expand in Singapore and Asia Pacific.”

    “The acquisition of Healthe Care represents an important milestone in the development of Luye Medical Group. It has great strategy significance and extensive influence on the development of healthcare services and lays the foundation for Luye Medical Group and Luye Group as a market leader both internationally and in China,” said Mr. Liu Dianbo, Chairman of Luye Group.

    Both Healthe Care and Luye Medical Group specialize in areas such as oncology, cardiology, neuropsychiatry, orthopedics, and rehabilitation and synergies with the key therapeutic pharmaceutical products of Luye Pharma Group, another member of Luye Group.

    (1) Statistical Communique on Development in Health and Family Planning of China in 2014, as released by the National Health and Family Planning Commission, in 2014 the patients of public hospitals were 134,150,000 (accounting for 87.3% of the total patients) and the patients of private hospitals were 19,600,000 (accounting for 12.7% of the total patients).
    (2) In 2013, the State Council proposed in the Plan for Deepening the Medical and Health System Reform during the 12th Five-year Plan Period and the Implementation Program, the beds and service quantity of non-public medical institutions shall reach approximately 20% of the total quantity in 2015.