Myanmar's government makes health care investment key policy

The state of health in Myanmar is gradually improving, with significantly higher levels of funding being allocated by the government. Foreign donors and private investors are looking to participate in the fast-expanding service sector. To ensure its 56m people have access to better care, and mindful of the challenges, the government is increasingly open to assistance from foreign governments, NGOs and private firms.

Instituting Reforms

Dr San San Yi, chairman of medical equipment supplier Okkar Thiri, told OBG, “The government has hurdles to overcome. They need support from local and international firms. Together we can make a difference, but agendas and policy need to be synchronised.”

The National League for Democracy (NLD) took office in April 2016 and Daw Aung San Suu Kyi, who now holds the position of state counsellor, has stressed that health care is a priority of her party’s government. In opposition, the NLD started the National Health Network to provide basic health care services – an initiative that is now likely to be scaled up – and its manifesto promised to improve and expand the country’s medical services, and reduce the level of out-of-pocket spending by those who are seeking treatment. The goal is to achieve universal health care by 2030, if not earlier.

The Ministry of Health (MoH) has ultimate responsibility for Myanmar’s health system, but after years of isolation under the military regime, the country’s new civilian leadership is opening the door to the international community and NGOs, and deepening ties with community groups and religious societies who have often filled the gaps in health care provision.

The Department of Public Health oversees the provision of basic health care and operates 1132 hospitals nationwide. Its facilities range in size from 2000-bed hospitals in cities like Yangon and Naypyidaw, providing a variety of specialisations, to remote rural health clinics with 20 or fewer beds.

Sector Spend

Government health spending rose nine-fold between 2011 and 2015, with public health expenditure as a percentage of total health spending increasing from 20% to 34%, according to Dr Phyu Phyu Thi Zaw, a World Health Organisation (WHO) human reproduction programme career development fellow at Stanford University. Even with the increase, UK Trade & Investment (now the Department for International Trade) noted in February 2016, “A much larger injection of funds and foreign investment is necessary to reverse decades of neglect and mismanagement.” Myanmar spends less on health care than its ASEAN neighbours. According to the World Bank, health spending rose to $1.08bn in 2014 (2.28% of GDP), compared with $236.98m (1.83% of GDP) in 2005. By 2015 the proportion of spending devoted to health had risen further, to 3.8%. In per capita terms, the World Bank said Myanmar spent $20.29 in 2014, compared with $4.74 in 2005. The World Bank, the Global Fund and the Three Millennium Development Goals Fund are fuelling momentum towards universal health coverage, providing financial assistance to tackle HIV/AIDS, tuberculosis (TB) and malaria, as well as support for the development of health care for pregnant women and children.

Modernisation Effort

The UK government, under the Department for International Development, has been working with the MoH to modernise the Yangon General Hospital (YGH), which was built by the colonial administration in 1889 and was last renovated in 1964. The 2000-bed facility is the main training hospital for the country’s medical university, and its 1800 staff, including 300 doctors and 480 nurses, widely seen as the most skilled in the country. The hospital handles more than 3000 patients every day, some 300 of them emergency cases. The work at YGH includes not only building improvements – new roofing, ventilation systems and drainage – but also a reform of the means for storing medical records. Additionally, a visiting professorship programme involving oncology and nuclear medicine training was planned for 2016. The renovation at YGH has also brought more up-to-date medical equipment, including a MMK210m ($170,580) endowment of modern equipment from Sea Lion, the local agent for GE Healthcare. GE has sold 13 of its digital imaging CT scanners to hospitals in Myanmar.

While beneficial, increases in government spending mask sharp differences between urban and rural areas. The strategy consulting firm Solidiance, which tracks Myanmar’s health market, describes Yangon as the epicentre of the health sector and data shows the city has more doctors per 1000 people than the country as a whole. The ratios for nurses and hospital beds are also better in Yangon than elsewhere. According to Phyu Phyu, areas such as Chin State and Shan State have seen only minimal increases in funding compared to Yangon, Mandalay and Ayeyarwady. About 70% of Myanmar’s population lives in rural areas, and the poverty level in Chin State is 73% – the highest in the country – followed by Rakhine at 44%.

Hiring Challenges

Decades of neglect have created manpower shortages, not only for doctors, nurses and dentists, but also in health care administration. Against a global standard of 2.4 health workers for every 1000 people, Myanmar has 1.3, according to the UN Population Fund. There is a significant lack of specialists, with just 17 oncologists in the country and only 10 of those considered senior. Medical workers are poorly paid, so many doctors who work in the public sector supplement their income by running private consultations, selling pharmaceuticals or teaching. The government is trying to improve the situation, working with international academic partners to bring medical training programmes at the country’s medical universities and training colleges up to date. For example, under the Jhpiego programme, a maternal health programme, Johns Hopkins University is working with the MoH and 24 local midwifery schools, which have been established to increase both the number of students and teachers, and raise standards of local clinical practice.

As of 2015 it is estimated that some 3700 women died each year in childbirth in Myanmar, while 43% were giving birth without a skilled professional in attendance. Alongside Western medicine, many people in Myanmar seek traditional remedies, which are often cheaper – an important consideration, given treatment costs dissuade some patients. A Department of Traditional Medicine was set up in the Ministry of Health in 1989 and is responsible for 20 hospitals across the country, as well as a Traditional Medicine University and two factories producing a full range of traditional drugs. There are also 1000 traditional medicine providers in the public system and 6000 working privately.

Private Hospitals Open

For decades Myanmar’s wealthy have travelled overseas for medical treatment, usually to Singapore or Thailand, reflecting not only the poor quality of medical facilities at home, but also a deficit of trust borne of the poor conditions in the country’s health sector and frequent misdiagnoses. Assisted by local representatives who arrange visas, accommodation and even an interpreter, those Myanmar who can afford to do so seek treatment overseas, especially when it comes to serious conditions such as cancer, liver disease and organ transplants. Myanmar patients spend an estimated $600m per year on medical care outside the country.

Tourists and expatriates are frequently warned of the risks of falling ill or having an accident in Myanmar, with travel operators advising medical evacuation insurance. However, thanks to amendments to the foreign investment law in relation to health, new clinics and hospitals have been opened, catering not only to the rich, but also to a newly emerging middle class, who have more money to spend on their health.

“It is not true that you have to evacuate for quality care,” Dr Gershu Paul, CEO of Pun Hlaing Siloam Hospitals (PHSH), told OBG. “People are taking a view on what it was, rather than what it is and what it will be.”

Foreign Investment

Until 2014 foreigners were barred from investing in Myanmar’s health care sector, but they are now allowed to invest in private hospitals, clinics, diagnostic services and devices, as well as health-related education, provided they do not own more than 80% of the venture. That compares positively with the region, where the investment limits range from 100% in Singapore to 30% in Malaysia. At the same time, ASEAN has made health care a priority of its economic integration plans, with a focus on trade in pharmaceuticals and medical equipment, as well as the provision of health services and the extension of mutual recognition agreements allowing medical professionals to work throughout the ASEAN region. Still, financiers must do their research. Girish Wadhwa, president of MEGA Lifesciences, told OBG, “Some investors need to enter the market with more caution. While the country is developing, there are still obstacles that need to be overcome.”

New Projects

Regional health care giants have shown greater interest in Myanmar in the past couple of years, encouraged by less rigid investment rules and rising domestic incomes. One of the more ambitious projects is PHSH, a joint venture (JV) between Serge Pun & Associates (SPA Group) and Indonesia’s Lippo Group, the conglomerate that operates the Siloam Hospitals Group in the archipelago. The JV plans to build on the reputation of PHSH, which was opened by SPA in 2005, before Lippo took a 40% stake in 2014, to open more than 10 hospitals across Myanmar by 2023, with the first to open in Mandalay in 2017. It also aims to achieve Joint Commission International accreditation by the first quarter of 2017.

SPA Group wants its facilities to be internationally competitive, but also accessible so offers tiered pricing. A caesarean, for example, would cost between $400 and $1500 depending on the patient’s income, according to Gershu. Malaysia’s IHH Healthcare, the world’s second-biggest hospital operator with the Gleneagles and Parkway brands, signed an agreement in January for a $70m, 250-bed hospital on a prime tract of government land close to YGH, which it expected to open in 2020. The project broke ground in 2016 and, under a build-operate-transfer agreement, the private hospital will become public in 50 years, Yet in early 2017 the government overturned the land allocated and the project’s future was uncertain. According to Dr Kyaw Min Soe, a researcher at the Research Centre for Health Economics and Evaluation, while opening up the market could help raise standards and improve medical knowledge, the process needed to be effectively managed. “Increasing foreign investment can worsen inequalities in the current Myanmar health care system,” Dr Kyaw wrote in Myanmar in the urban area and target good-income patients. Those investments can also lead to the internal brain drain of medical professionals, as more doctors and nurses work in the foreign hospitals offering good salaries. It is up to us to ensure a strong health system for promoting the equitable (and) affordable access to health care for all Myanmar citizens.” Many medical professionals work in both the public and private sectors, with private employment supplementing the public sector salary. PHSH’s Gershu said that of 40 full-time specialists employed at the hospital under exclusive contracts, 25 to 30 are returning locals.

Disease Burden

Despite substantial progress across many sectors, Myanmar remains a frontier economy with one of the lowest per capita incomes in Asia, a condition that is reflected in the health of its population. In 2015 life expectancy at birth was 65 for men and 68 for women, behind Cambodia but ahead of Laos. Despite reforms in recent years, the country also continued to report a relatively high level of deaths among under-fives (56,000 per year) and new mothers (200 per 100,000).

The risk of infection in Myanmar also remains very high, with a prevalence of water and food-borne diseases, as well as malaria and Japanese encephalitis (JE). In August 2016 an outbreak of serious diarrhoea and cholera, was reported in Pyay, a town along the Ayeyarwady River and led to the hospitalisation of more than 140 people. While deaths from diseases like HIV/AIDS, TB and malaria appear high compared with elsewhere in the region, significant progress has been made. Myanmar stabilised its HIV/AIDS epidemic, according to the UN Development Programme, reducing the prevalence of the disease among the 15- to 49-year-old population to less than 1%. The incidence of TB has also declined – reduced by half between 1990 and 2010. The government has also halved malaria morbidity and mortality since 2007, in line with the UN’s Millennium Development Goals.

An expanded immunisation programme supported by WHO, the UN Children’s Fund and the Global Alliance for Vaccines and Immunisation that began in 2012, has also helped manage outbreaks of infectious diseases, as well as deaths among underfives. By 2016 Myanmar aimed to achieve routine immunisation coverage nationally of 95%, with at least 80% coverage in every township for all antigens.

Still, health workers face problems with refrigeration that risk compromising the efficacy of the vaccines. Authorities are using solar energy to provide the power necessary to ensure prolonged cold storage in remote areas and places that have fewer than eight daily hours of electricity. In 2016 after the country saw serious outbreaks of JE, which is carried by the bite of an infected mosquito, and measles, the government responded with a vaccination campaign in the affected areas. More than 15,000 children were inoculated, covering 85% of the region.

Even as it continues to battle infectious diseases, Myanmar faces a rising incidence of stroke, diabetes and heart disease; the types of chronic illnesses that are typically associated with changing diets and sedentary lifestyles. Non-communicable diseases now account for about 59% of all deaths, according to global information provider IMS Health.

Smoking Culture

The use of tobacco – whether cigarettes or betel (a leaf wrapped around a mixture of tobacco and lime) chewing – is widespread. About 60% of men and 18% of women are smokers and the government has been tightening tobacco regulations, most recently in 2016 when rules requiring the use of graphic health warnings on cigarette packaging were introduced. However, cigarettes remain relatively cheap – at roughly MMK650 ($0.53) a for a pack of 20 – and the WHO has recommended the tobacco excise duty be increased to at least 70% of the retail price.

“Betel chewing is also a major problem,” according to Dr Than Sein, a former senior executive at the WHO who now leads the People’s Health Foundation (PHF). About 60% of men above the age of 25 chew betel and about 25% of women, according to the Foundation. Many of them chew the leaf daily. Its use has also been rising among young people, with about 30% of 15-year-olds chewing, compared with 10% in 2009. “The incidence is not only high, but it is increasing,” Dr Than Sein told OBG. Betel chewing has a long tradition in Myanmar and much of South-east Asia and is linked with cancers and diseases of the gums, mouth and throat, and is a risk factor for chronic conditions such as hypertension and diabetes – but neighbouring countries have largely cut back on the practice.

Costs & Drugs

Health care costs are a big issue in Myanmar, largely determining when and where people seek treatment. The out-of-pocket cost is around 82% of the charge, the highest in the world, according to Phyu Phyu. Serious conditions will often require patients to make long journeys to the major cities to seek specialist care, further adding to the cost.

The country is now experimenting with its first health insurance scheme, developed in consultation with the MoH, Myanmar Medical Association, and insurance experts from both the public and private sector. It is open to all citizens and residents aged six to 65 and involves 12 insurers, including the major player Myanmar Insurance. Under the plan, residents can buy up to five units of insurance at an annual premium of MMK50,000 ($40) per unit. Each unit will cover MMK15,000 ($12.20) of treatment a day including hospitalisation for as long as 30 days. A single policy – standardised across all the companies – provides a death benefit of MMK1m ($812).

According to IMS Health, initial uptake was slow with only 2000 applications. However, with the middle class set to expand to 19m by 2030, insurance has much potential to improve access to medical care. Drug prices are relatively high too – despite the use of generics from India, Pakistan and Bangladesh. Myanmar imports most of its drugs in US dollars, and the kyat’s decline has helped fuel inflation – around 12% in 2016. A commercial tax of 5% also took effect in 2015 and it is applied to most medicines. According to Than, prices have risen by as much as 20% in the past year, prompting the government to accelerate plans to introduce a price control mechanism for essential medicines. Dr Than Htut, director-general of the Food and Drug Administration (FDA), which regulates the industry, told the local media in June 2016 that a maximum retail price, modelled on the programme in India, was on the table and would help stabilise prices and protect consumers from unregistered drugs.

However, some industry experts said the FDA’s own licensing scheme in some ways contributes to the distortions in the market. It can take two years to get approval for a drug, even where that drug has already been approved by regulators in developed countries, and applications have to be typed out on a manual typewriter. Distributors receive a trial registration certificate, which takes about 18 months, and then after a few more months a direct import assessment certificate, valid for five years. Licence renewals take three months. “The drug registration process has become smoother over the years, resulting in faster clearances. However, it can be further improved to facilitate the availability and affordability of quality medicines in the country,” Rajeev Rawal, Executive director of ABC International Myanmar, which markets and distributes products made by international drug majors such as Bago Pharma, Montpelier, Ferozsons Laboratories, ICPA and Flamingo, told OBG.

Local media report that some 25% of drugs sold in Myanmar pharmacies are illegal or substandard. These medicines are usually cheaper than registered products, but there are concerns about storage and dosage. Counterfeit medicines are usually over-thecounter drugs and are often found near the borders.

Outlook

Despite the problems, the country’s pharmaceutical market has been growing. ABC’s Rawal estimated the market to be worth $650m and is very bullish about growth. According to IMS Health, the market could grow to be worth $1bn by 2018.

A new Food Law and a Medical Devices Law are being drafted, and the FDA is stepping up inspections, with some indications that it may become an independent entity. The potential for growth has attracted the interest of multinational firms, and as the pool of industry talent grows and the regulatory environment evolves, costs are expected to decline.

 

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The Report: Myanmar 2017

Health & Education chapter from The Report: Myanmar 2017