The cost of healthcare is rising in ASEAN. How can nations get the most for their money?

A man checks his mobile phone as vendors wait at their stand in Chinatown, Singapore January 27, 2018. Picture taken January 27, 2018. REUTERS/Soe Zeya Tun - RC12F435CD30

The shift to mobile will have a major impact on healthcare in ASEAN Image: REUTERS/Soe Zeya Tun

Deborah Gildea
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This article is part of: World Economic Forum on ASEAN

There is an imminent crisis of healthcare spending in South-East Asia, according to a report by Solidance to be presented at the World Economic Forum on ASEAN.

It suggests that the total healthcare spending of the ASEAN 6 nations (Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam), which was an estimated $420 billion in 2017, will increase by 70% over the next two decades. This rise will be driven by the increasing age of these countries’ populations, the high rates of smoking in some countries, and the adoption of more sedentary lifestyles and unhealthy diets, leading to lack of exercise and increasing rates of obesity.

Of the ASEAN 6 nations, four - Indonesia, Malaysia, Philippines and Vietnam - currently have a relatively low level of government spending on health, between 1.1% to 3.8% of GDP. Singapore and Thailand spend more - 4.9% and 4.1% of GDP, respectively. However, even this higher spend is lower than the global average of 6%, or 7.7% among OECD countries. Yet most of the ASEAN 6 governments have been trying to slow down the increase in health costs, just at a time when demand is beginning to increase rapidly. How can ASEAN 6 governments ensure their citizens get high-quality treatment and care while maintaining control of healthcare costs?

Image: ASEAN Post

One element has to be a focus on early diagnosis and effective treatment for chronic disease, to avoid much higher treatment and care costs at a later stage. This approach has been shown to be highly effective for diseases such as diabetes and hypertension. Now is the time for governments in many ASEAN countries to invest in capacity building for prevention and early diagnosis, and to ensure access to care is decentralized to local communities, rather than centralized in expensive hospitals.

Another element could be the harmonization of regulatory processes. Getting essential medicines to patients could be made faster by harmonizing ASEAN regulatory processes. This would reduce administrative costs for each country.

The same goes if we really want to take advantage of digital health. ASEAN countries have an opportunity to go further and faster with digital solutions, as they are not burdened with the legacy systems established in Europe and North America. Everything is becoming mobile. You can have a teleconsultation, get a digital medical prescription and then have your medicines delivered by drone. Developing a harmonized regulatory environment geared toward these innovations bears huge potential with far-reaching implications for Asian health systems.

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Finally, public-private partnerships could have the greatest impact. The contribution of the private sector can be wide-ranging. It can not only raise much-needed capital, but also support capacity building for delivery of high-quality healthcare. Companies such as Novartis have moved beyond corporate responsibility. They now believe they can play a catalytic role in helping countries achieve the UN’s Sustainable Development Goal 3: to ensure healthy lives and promote well being for all at all ages. This is not philanthropy - it is good business.

Yet finding effective solutions requires both a better understanding between partners, and innovation around institutional structures to ensure accountability, value for money, and risk and benefit sharing. Everyone delivering healthcare in Asia, whether in the public or private sectors, needs to go outside their comfort zones. Novel solutions need to be developed on both sides.

Experience shows that healthcare costs will certainly rise in the ASEAN 6 countries as they become more prosperous. But the question is whether spending will be directed towards solutions which offer the greatest value for money and have the biggest impact on citizens’ health.

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ASEANHealth and Healthcare
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