For the most part, Myanmar’s resilient economy has grown dramatically since the easing of international sanctions, while health care expansion has been modest at best. Although the outgoing government under U Thein Sein increased spending on the sector from K92bn ($71m) in FY 2010/11 to K691bn ($533.5m) in 2015/16, Myanmar remains behind its ASEAN counterparts by this measure.
New Management
As a result, access to basic health care is lagging, with preventable diseases such as malaria, acute respiratory infections and diarrhoea among the top causes of death. However, the landslide victory by the National League of Democracy (NLD) in the November 2015 general election bodes well for the industry. Under the leadership of the NLD’s chairperson Daw Aung San Suu Kyi, health care is key to the national agenda.
Over the last few years, gradual progress has been made in the overhaul of Myanmar’s medical framework, and for the first time many rural communities are benefitting from the expansion of the nation’s health care budget. However, after decades of neglect due to mismanagement and very low public spending under military rule, the challenges of achieving universal health coverage by the 2030 government deadline remain vast.
Framework
Health care is provided by six groups: the public sector, private hospitals or clinics, donor agencies, clinics not run by the central government, NGOs and, in some cases, the military. The Ministry of Health (MoH) is the primary public-sector provider of health care in the country, The MoH is responsible for 2020 hospitals nationwide, 16 of which are dedicated to traditional healing methods, with a combined total of 55,305 beds nationwide, according to 2013 statistics.
Specialised tools and basic diagnostic equipment are often lacking. The reach of the MoH is considerably restricted, with specialist hospitals (only in the business capitals of Yangon and Mandalay) significantly overstretched and patients far exceeding the number of available beds. Rural hospitals and clinics under the MoH offer no specialist services and are not present in most of the country’s conflict zones. Instead, these no-go zones, which have the lowest standard of living, are often manned by ethnic health organisations and community-based health organisations, which rely on the support of NGOs and international donors.
Certain ministries also provide medical treatment for their staff and families, with most of these located in the urban centres of Yangon, Mandalay and Naypyitaw. The Ministry of Labour manages three hospitals under the social security scheme. The Ministry of Defence, under the control of the military, operates the Myanmar Defence Directorate of Medical Services, which provides services to active military members and their families through a relatively extensive network.
Inroads
The number of private hospitals and clinics has been growing steadily in recent years, particularly in Mandalay and Yangon. Given the limited size of the country’s working class, these facilities are mainly targeted at the upper class. This trend is changing, however, as the gradual creation of a middle class and the dramatic increase in disposable income has amplified the interest of multinational health care companies.
By mid-2015, agreements to build 14 new hospitals had been signed by two foreign firms with a combined investment value of $520m. The first of these was Thailand’s Thonburi Hospital Group, which signed a $100m deal in June 2014 for a 40% stake with local company Ga Mone Pwint to build two hospitals – one in Yangon and the other in Mandalay – with a combined capacity of 400 beds.
The second was Lippo Group from Indonesia, which also entered a joint-venture agreement with First Myanmar Investment (FMI) for $420m. So far, the group has upgraded the facilities and services of FMI’s Pun Hlaing Hospital, and has plans to build 12 hospitals over the next five years.
Bumrungrad Hospital, Thailand’s second-largest health provider, was also granted a business permit in October 2015 from the Myanmar Investment Commission to operate a private clinic. According to local media, the Thai giant will hold an 80% share in the venture, while a 20% stake will be held by Yangon International Medical Services. Other international hospitals have publicly announced their interest in Myanmar, such as Malaysia’s IHH Healthcare and Bangkok Hospital Group, which already has more than a dozen representative offices across Myanmar to fuel the appetite of the country’s growing outbound medical tourism.
Challenges Ahead
Prior to the collapse of social investment when the military took charge in 1962, the health industry was on par with its South-East Asian peers. Nearly 50 years of poor governance left the health system in dire need of reform. Fortunately, the appointment of a semi-civilian government, coupled with the easing of sanctions and support from international donors, has enabled the health sector to gain some momentum. However, major obstacles remain in providing adequate medical services to a diverse population of more than 50m people, of which more than two-thirds live in rural areas, including geographically isolated communities and no-go zones due to ethnic conflicts.
With the highest rate of out-of-pocket health expenditure in Asia, the vast majority of people who cannot afford private health care rely on a medical industry that is overstretched and lacks basic infrastructure. In addition, Myanmar is faced with increasing rates of both communicable and non-communicable diseases (NCDs) and an alarmingly high rate of maternal mortality, with more than 80% of women delivering their infants at home.
Heavy Burdens
According to the World Health Organisation (WHO), Myanmar belongs to the global list of 22 countries with the highest burden of tuberculosis (TB), with a prevalence of 473 casesper 100,000 people in 2013. This included a high rate of both artemisinin-resistant malaria and multidrug-resistant TB. HIV/AIDS accounts for some 18,000 deaths a year, while malaria is prevalent in 284 out of 330 townships in Myanmar.
NCDs, however, are the leading cause of mortality, accounting for nearly 60% of deaths in 2014, with growing cases of strokes, diabetes and heart attacks resulting from a combination of unhealthy lifestyles and rapid urbanisation.
According to Dr San San Yi, chairman of Okkar Thiri company, a small talent pool is also hindering the sector’s progress. “Local doctors are stretched far too thin, particularly in rural areas,” she told OBG. “One of the biggest challenges for the industry is not the ability, but rather the limited amount, of health professionals.” Of the nearly 1m people employed by the public health sector, only 7% work for the MoH. There is one doctor for every 1800 people and four nurses for every 10,000 people in the country. While official records show less than 18,000 qualified doctors are actively employed, almost 30% are either seeking employment, further tuition or applying their trade abroad. According to official statistics, there are only 62 oncologists in the country, and due to a lack of equipment, cardiovascular diagnostic capabilities barely exist.
Human capital is clearly in short supply, particularly at public hospitals and rural health centres, where average staff salaries are far below regional norms. This shortage is even more apparent in isolated areas, such as the eastern ethnic-controlled border regions where the public sector has little if no reach. The Karen state, for example, is home to the highest number of internally displaced people (IDPs), who have to rely on community-based health organisations such as the Burma Medical Association. These institutions are essential components of the health system due to the absence of official public health services in these areas. Efforts are, however, being made to expand the reach of medical provision in minority areas (see analysis).
Government Spending
In an attempt to tackle the problems of an outdated national health framework, the Myanmar government has increased its annual spending by $51.72m for FY 2015/16, to $533.5m – a 10.6% rise from the previous year. A large portion of this will be dedicated to improving human resources, supplying more medicines and upgrading hospitals and medical centres.
According to a statement released by the MoH in May 2015, some $50.2m was allocated for the provision of medicines in public hospitals. The increase in available medicines at these facilities has led to overcrowding. To assist with the overload, the MoH is upgrading rural health centres and public hospitals – such as Yangon General, which will add 1000 beds – and is hiring a significant number of staff, all while raising salaries for medical professionals, who have a history of leaving the country in search of higher remuneration.
International Support
In an effort to support the social development of rural and urban communities, foreign aid donors and their implementation partners have been entering Myanmar on a growing scale. According to a Devex release, there were approximately 20 international donors and 59 listed international NGOs working across the country in mid-2015, while according to the MoH there are 14 active national NGOs.
Aid to Myanmar reached an impressive $4.5bn in 2013, almost an 800% increase from the $504m issued in 2012. According to USAID estimates, in late 2013, donor aid from the Global Fund, the World Bank and the Three Millennium Development Goal (3MDG) Fund will total approximately $1bn in the period from 2014 to 2018, and will be specifically dedicated to improving the country’s outdated health infrastructure and the provision of care. According to a report by the Centre for Strategic and International Studies (CSIS), the three funds will contribute some 10% of total health expenditure in the country over five years.
Major Sources
The Geneva-based Global Fund is primarily concerned with the fight against AIDS, TB and malaria. The fund initiated grants in 2004 but pulled out a year later due to donor concerns, only to re-enter in 2011 after the easing of international sanctions. Over the next three years the Global Fund became the largest donor, contributing $380m for the prevention of communicable diseases. The 3MDG Fund, established by Australia, the Netherlands, Norway, Sweden, the UK, the European Commission and Denmark, is focused primarily on maternal, newborn and child health (MNCH) development, with a combined commitment of $300m over 2012-2016, targeting 42 of the poorest townships nationwide. Valued at $1.6bn in credits, loans and grants, the Country Partnership Framework was signed by the World Bank in May 2015 from the International Development Association, the bank’s fund for low-income countries. According to local reports, 3m pregnant women and children will benefit from improved health services, and 6m people will receive better access to electricity.
Until recently, international donors distanced themselves from local government bodies to comply with international sanctions. However, the national elections in November 2015 may act as a catalyst for bilateral donors and multilateral agencies to reduce their dependence on international NGOs and UN agencies to act as implementers. Instead, the combination of relaxing of sanctions and a democratic society will enable them to work directly with the public sector, which has been prohibited in the past. This potential shift in external partners has been noted by health analysts as a major breakthrough which would enhance efforts to strengthen the national health care framework. One existing example is efforts by the World Bank to channel funds through the MoH into the lowest-income regions to promote MNCH development and access to adequate health care (see analysis).
According to the CSIS report, this approach may be difficult for others to duplicate. If, for instance, the pace of progress is too rapid, too much pressure will be placed on the MoH due to capacity constraints. If the pace of change is too slow, though, the current UN and NGO implementers may be reluctant to cooperate in the shift of focus.
Signs Of Change
There is still room for improvement, but in recent years the MoH has shown its ability to join forces with international aid providers to combat the spread of disease. A recent example is the partnership between the WHO and UNICEF in November 2015 to support a mass polio vaccination by the MoH across 102 townships, targeting 1.4m children under five years of age. The MoH has also partnered with global health organisation END7, with the WHO, which is supported by medicine donations from international pharmaceutical companies, and with volunteer workforces, in an effort to combat the spread of certain neglected tropical diseases within Myanmar.
While the country is faced with chronic health challenges, the efforts of NGOs and community-based clinics on the prevention of disease and distribution of medicine are ever more present. This is most apparent on the eastern border with Thailand, where preventable diseases such as malaria, acute respiratory infections, and diarrhoea continue to be the top causes of death, largely due to ethnic conflict and land confiscation resulting in the massive displacement of local people.
Improving child health services remains a top priority, and an influx of aid is being channelled to combat the causes of under-five mortality, which in Myanmar is considerably higher than the world average. However, with more NGOs entering the country, ethnic and community-based health organisations have been able to collaborate with international aid workers to evaluate and improve maternal health, antenatal care, child nutrition and disease prevention initiatives, among other areas.
Insurance
Health insurance first came to Myanmar in July 2015. Issued by local insurance companies, the long-awaited product marked a milestone in the evolution of the country’s insurance services. Launched as a one-year test phase, local insurers have been tasked with educating potential clients about health insurance.
Patients are not the only ones in need of information, however, as brokers are also seeking guidance. Until 2013, state-owned Myanmar Insurance held a monopoly on the insurance industry, and did not offer health coverage at all. Now, along with 11 private insurers, the company has been offering policies to people between the ages of 6 and 65 at a rate of K50,000 ($45) per unit (up to five units), with each unit entitling the policyholder to up to K15,000 ($13.50) a day (up to 30 days). Designed by the Insurance Business Regulatory Board, the payment and application process is the same for all 12 insurers, which are required to pay out an amount of K1m ($900) in the case of accidental death.
Pharmaceuticals
With the majority of medicine imports coming from India, Myanmar’s pharmaceuticals market was estimated to be worth approximately $570m in 2015. With the Asian Development Bank expecting per capita income to triple by 2030 and the demand for modern medicine on the rise, it is no surprise that international medicine brands have swarmed into the country.
Per capita pharmaceutical expenditure was at $8 in 2013 – extremely low compared to neighbouring countries. However, given increased government expenditure on health and the proposed universal health coverage target of 2030, the rapid growth of the market is expected to continue, though not without challenges. “The market has immense growth potential, but fundamentals don’t change overnight,” Girish Wadhwa, country manager of MEGA Lifesciences, told OBG. “The last few years have been very encouraging and we expect continuous improvements, but it will take time for the government to address all the issues, as they have inherited a wealth of challenges.”
To improve provision of medicines, the NLD will need to address several shortcomings. Smuggling is one major issue, accounting for 20% of the local pharmaceuticals market – particularly those from China, Thailand and India. In addition, Myanmar’s Food and Drug Administration is short-staffed, lacks basic equipment and has limited handling abilities such as cold storage facilities. This limits its ability to keep new medicines for testing and approval before national release.
The recent rise in hospital tenders for pharmaceuticals has made competition fiercer, with multinationals playing an increasing role. Local players are also jostling to take advantage of the changing landscape. State-owned Myanmar Pharmaceutical Factory has received 20 offers from private firms to update their production facilities. Of those, five will be selected to commence the project, valued at $24.62m, in 2016. According to the Medical Equipment Entrepreneurs Association, six foreign investment proposals to build pharmaceutical manufacturing factories have also been approved.
Outlook
As the country’s health system matures, the sector promises to be one of Myanmar’s most dynamic over the next few years. The concept of health insurance is a sign of things to come, as locals become accustomed to better patient services. Progress in access to health care over the next 18 months will be a key stepping stone for the MoH. With a new government expected to ramp up spending on health, growth is all but guaranteed.
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