SHAH ALAM (March 1): The total healthcare industry spending in Malaysia, which stood at RM52 billion at end-2017, is expected to reach about RM80 billion by 2020, fuelled by increasing demand for healthcare services, and emergence of new care models beyond traditional hospital settings, according to business consulting firm Frost & Sullivan.
Increased consumer sophistication in relation to healthcare related technologies also helps, it said.
However, Frost & Sullivan partner Rhenu Bhuller said rapid development in technology presents both challenges and opportunities to industry players, including pharmaceuticals, diagnostics, medical technology manufacturers, digital health vendors and healthcare service providers.
“At this point, healthcare companies have to have a technology strategy. Some areas of investment they can consider are supplement technology to support their resources to do things more efficiently, investment on human resources to train employees to work with the new technologies and also investments in reaching out to consumers,” she said at a briefing today.
“On a purely revenue standpoint, we still see the pharmaceutical and biotechnology industry to be the largest, followed closely by medical devices and then patient monitoring,” said industry manager for the Frost & Sullivan Transformational Health practice, Natasha Gulati.
Frost & Sullivan yesterday presented its top predictions of disruptions that will dramatically change the healthcare industry in Asia Pacific including Malaysia for 2018.
Gulati said there are some major issues within the Asia Pacific region that need to be addressed, which revolves around access, privilege, and affordability of healthcare, and the major concern around resource distribution.
“A very large part of our healthcare system is concentrated geographically as well as across socioeconomic strata, where some of healthcare services are actually not even accessible to certain populations,” she said.
A worrying trend is observed in Asia Pacific, Gulati noted, where markets with the highest per capita spending also have a significantly lower amount of private health insurance penetration.
“This means that there is a very significant healthcare cost burden being shared by people out of their own pocket,” she said.
On medical tourism, Gulati said India and China are two key markets to capture as a significant number of outbound patients are expected to come from these countries in 2018.
“We expect about 2 million travellers coming out of India and China to other parts of the world, including to Malaysia, to seek medical treatments,” she said, adding that the Malaysian government’s allocated fund to develop medical tourism in its 2018 budget is a good support for growth.
Another advantage for the Malaysian market is its fast adoption of e-commerce by businesses as compared to its peers in the region. This, Gulati noted, is a potential area that could be capitalised by distributors of healthcare consumable products.
“Malaysia is actually very well-positioned to develop markets like e-commerce, including e-commerce platforms for healthcare,” she said.
She also noted consumerism as a major disruptor in the healthcare industry in Malaysia, where Malaysian consumers’ demands are seen to be driving a lot of technology innovations on the service front.
Healthcare service providers are expected to adapt to these demands to avoid losing out as Malaysian consumers are becoming more aware of their priorities, she said.
“So, as more of this consumerism pushes through in healthcare, we expect more data and information to be accessible to consumers so that they can make better decisions on where they want to be treated, how they want to be treated, and even by whom they want to be treated. We are seeing this kind of democratisation coming to the market very fast,” Gulati added.
Source: The Edge Markets