The healthcare industry is entangled in a transitory phase in which therapeutics, devices, products and services are sold into traditional care settings that are unable to keep up with the requirements placed upon it by changing demographics and consumer needs. At the same time, opportunities for new services and care, such as ambulatory, mobile, and home care, lack the appropriate level of maturity to provide robust revenue streams despite having the promise to increase healthcare delivery efficiency and reduce long term costs. As a result, Frost & Sullivan's experts are predicting twelve months of year of disruptions and transformations.
"With the consumerization of healthcare and the continued development of mobile health, new innovative models for healthcare delivery, as well as continued establishment of healthcare services in rurul areas, traditional models or 'old way' of doing things will slowly phase out," said Frost & Sullivan Partner and Senior Vice President of Healthcare, Rhenu Bhuller.
"Especially in a country like Indonesia, where we are going through a transitionary phase with the implementation of universal healthcare and the emergence of a strong private healthcare services sector, public-private partnerships will lead the way for healthcare delivery innovation. Moving forward, the most successful enterprises will be looking to take a more holistic view of what the true meaning of value is to healthcare stakeholders and payors and how their offering integrates with other aspects of healthcare diagnosis and delivery," she added.
Frost & Sullivan is forecasting the global healthcare market growth in established markets to be slow, making companies review their cost structures and focus on non-traditional growth markets like South East Asia.
"In 2015 traditional sectors like pharmaceuticals and medical devices will grow at a moderate rate, with faster growth in areas like diagnostics and healthcare IT," Ms Bhuller said.
Growth opportunities in the pharmaceuticals & biotechnology sector are in generics and biosimilars, vaccines, specialty medicine and new areas like stem cells and regenerative medicine. Frost & Sullivan forecasts the global stem cells market could exceed $60 billion in 2015 with a growth of 25 per cent from 2014 due to the launch of new stem cell products and the growing importance of stem cell banking services across the globe. "The regenerative medicine market will attract strategic investments from public and private sectors while pharma companies will look to acquire cell therapy companies or invest in emerging cell and advance therapy organizations," added Ms Bhuller.
She also said that the generics market is projected to reach $200 billion in 2015 with increasing focus in CNS, cardiovascular, rheumatology, and oncology markets. "Generics and biosimilars is the largest driver for the pharmaceutical industry with major contributions from Latin America and Asia Pacific," she said.
The IVD market will be another one of the faster growing markets driven by immunochemistry, molecular diagnostics and development of the direct to consumer channel in terms of preventive health and diagnostics, while the growth in Healthcare IT will be fueled by new facility construction, system upgrades and data analytics.
South East Asia continues to build healthcare infrastructure to improve healthcare access
Healthcare expenditure is expected to grow at a double digit rate in most APAC countries till 2020. While healthcare expenditure public-private split varies in the region, the majority of the private spend is out-of pocket; however, private insurance is likely to continue to gain ground.
Frost & Sullivan believes that the majority of the hospital expansion will come from private players and private public partnerships (PPPs) while governments focus on expanding access in rural areas and in primary care. There is still a large gap in terms of healthcare infrastructure in South East Asia, hence the region will continue to see development of hospital infrastructure. Just Indonesia and Thailand alone are expected to add more than 60,000 beds by 2019.
Improved healthcare access in Indonesia drives total expenditure
Frost & Sullivan expects Indonesia healthcare market to reach 21 billion USD market in 2019. About a quarter billion Indonesians will demand quality healthcare services, faster disease screening, advanced medical technologies for early diagnosis, and high quality efficacious medicines for treatment.
Dr. Milind Sabnis, Director, Healthcare, Frost & Sullivan Asia Pacific said that JKN will boost all segments of the healthcare market. He is estimating the drug spend as a percentage of total health expenditure will be close to 19 per cent after JKN implementation, as more and more patients are expected to get access to healthcare through JKN this will increase demand for prescription drugs.
Dr. Milind Sabnis also said that the demand for hospital beds, especially outside greater Jakarta area, cannot be addressed by public hospitals alone hence private hospitals will expand beyond the key cities to capture the new and growing catchment areas.
There are total 73 major private hospitals in Indonesia operated by top 10 private players. "Of these, 57 per cent of the hospitals are located in Greater Jakarta area (42 hospitals). Though Greater Jakarta is still the most attractive destination highest potential growth is seen in Tier 2 cities like Makassar, Pekanbaru and Balikpapan for example," he added.
Dr. Milind Sabnis also said that increasingly friendly foreign investment policies and the huge opportunity in healthcare will attract non conventional players into healthcare. He added that after 2014 specialist hospital services are now open for 70 per cent ASEAN ownership (previously at 67 per cent). This opens hospital business market open for partnerships and stakes amongst ASEAN countries.
He also said that medical device companies will use collaborative models and localised products to increase penetration to the bottom of the pyramid
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