Higher budget allocations for infrastructure and technology are set to create new opportunities for Myanmar’s private health care sector, including international health service providers and suppliers, as the country works to address gaps in staffing and facilities.
Although patients or their families currently account for the vast majority of health expenditures in Myanmar – nearly 93% of health care spending was out of pocket in 2012, according to the World Bank – this is expected to change as the government moves ahead with plans to cover all citizens by 2030.
State of pay
To achieve this, Myanmar will need to significantly increase spending on health services and related infrastructure, particularly in rural areas of the country, where roughly 70% of Myanmar’s population of 51m lives.
The government is already taking steps to boost health care expenditure, with the sector one of the major winners in the 2015/16 budget that came into force on April 1. A total of MMK757.4bn ($592.3m) was allocated for health spending this fiscal year, a nearly 7% increase over the previous budget.
According to local media, the funds will be earmarked for the purchase of advanced medical equipment, including electro-surgical technology, as well as the provision of free medical treatment for government employees.
In addition, the government has committed to training some 5600 medical professionals and 1300 nurses over the course of the current budget cycle to help to bridge the shortage of medical professionals.
At present, Myanmar has fewer doctors per capita than other countries in the region. According to the World Health Organisation, there are 6.1 doctors per 10,000 people in the country, compared to 11.9 in Vietnam, 19.5 in Singapore and 23 in Japan.
Private sector potential
As state spending to improve and expand basic health coverage ramps up, demand for private health services is also expected to rise.
With Myanmar posting strong economic growth in the years since sanctions were lifted, there has been a gradual emergence of a middle class, offering a wider pool of potential clients for advanced medical services. The rapid influx of foreign tourists and expatriates has also contributed to growing demand.
While those who can afford it continue to seek health care overseas, instead of making use of state or private medical services, these outflows are expected to slow as domestic facilities and services improve and specialised treatment options expand.
Investment by foreign health care providers will be central to bridging the development gap, according Ang Wei Zheng, pharmaceuticals and health care analyst for BMI Research. “Myanmar's long-term income growth potential and low levels of public health care infrastructure will herald the entry of private health care providers into the country.”
The market has already attracted substantial interest from overseas providers, with foreign players able to own up to 70% of clinics and hospitals, according to the country’s foreign investment regulations.
One of the most recent market entrants, Indonesia’s Lippo Group, formed a partnership in June with First Myanmar Investments. Through the $420m joint venture, the company plans to develop 12 hospitals in the next three to five years, with another eight to follow through to 2025, more than doubling the current number of hospitals in the country.
This comes on the heels of two other recent forays into the sector. In 2012 India’s Apollo Hospitals launched a telemedicine serve in Yangon, which was followed by the arrival of Thailand’s Thonburi Hospital Group (THG) in June last year. Through a $100m agreement with Yangon-based Ga Mone Pwint, THG plans to build two hospitals with a combined capacity of 400 beds, with one facility to be located in Yangon and the other in Mandalay.
Foreign medical equipment suppliers like GE are also working to address pent-up demand for medical technology. GE launched operations in the country soon after sanctions were lifted in 2012, and now provides advanced imaging equipment to public and private hospitals, including MRI machines, CT scanners, cathlabs, ultrasounds and x-rays.
As the provision of health services improves in the years ahead, per capita health care spending is expected to rise exponentially, according to Dr Gershu Paul, CEO of Pun Hlaing Hospital, a private health facility in Yangon.
“With health expenditure currently at around MMK38,000 ($30) per capita and expected to reach MMK254,000 ($200) within the next decade, Myanmar is in a position to close the gaps in its health care sector faster than the rest of the region,” he told OBG.
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