Southeast Asia Needs to Rethink Its Healthcare Services, Says An Asian VC Firm
Crowded and expensive medical facilities in Southeast Asia is a problem that can be most efficiently solved by technology, says Monk’s Hill Ventures, an investment firm in Southeast Asia, adding health-tech is a key investment opportunity in the region.
Because Southeast Asia - home to more than 650 million people - is so dependent on agriculture, clearing vast farming lands to construct houses is not viable, and the densely packed urban sprawls often lead to outbreaks of infectious, tropical diseases. Added to that is the increasing need for long-term care of chronic conditions, as the average lifespan increases.
Many patients typically have to wait for three hours to receive three minutes of care, the report said, adding for five of ASEAN’s most populous countries, there are an average of 0.8 doctors per 1,000 people, lower than the global average of 1.5 doctors per 1,000, and far behind Singapore’s 2.3 doctors per 1,000 people.
To make a bad situation worse, healthcare costs in Southeast Asia are higher than in most other parts of the world - out of pocket costs account for 44 per cent of current health expenditure, versus the global average of 19 per cent.
Long waiting lines, especially for subsidized medical treatment, often also pressure daily-wage workers, who may have to forego a day of paid work to get doctor consultations.
The Diagnosis For Southeast Asia’s Healthcare Industry
One of the few bright spots in the massively lacking medical sector in the region is the growing middle class bracket, thanks to strong economic growth the “developing economies” have witnessed over the last few years.
Southeast Asia’s healthcare expenditure is expected to hit $740 billion by 2025, making it a lucrative proposition for investors in the region’s healthcare space, but up until now, those investment opportunities have been limited to local healthcare groups that operate brick-and-mortar hospitals, and large healthcare conglomerates.
Healthcare technology, or healthtech, is becoming an up and coming sector in the region though, presenting a lot more investment opportunities for those looking to get into the space.
In 2018, Southeast Asia saw just under half the 78 healthtech funding deals in Asia, excluding India and China, according to Monk’s Hill Ventures’ report, and these investments were mostly in AI-driven medical imaging companies, apps promoting a healthy lifestyle, and platforms that connect doctors and patients, remotely.
But Monk’s Hill Ventures argues that, through the lens of a broader investment philosophy, companies that offer end-to-end solutions are more favorable.
A full-stack model is more appropriate for Southeast Asia as even a simple disease can require treatment from multiple healthcare professionals. A more serious illness requires multiple hospital visits, blood tests, and other scans, and a full-stack model, which offers all kinds of healthcare services on a single platform, would be most beneficial to patients.
Vietnam’s Jio Health, A Case Study
Monk’s Hill Ventures uses the example of Vietnam’s healthtech company, Jio Health, to illustrate why a full-stack model is the way forward in medicare for Southeast Asians.
For a treatment request, patients typically input their symptoms on the Jio Health platform, and order a consultation with the doctor, who then comes to visit the patients for one-on-one consultations. After the diagnosis, the company works to fill prescriptions, or arrange blood sample collection, whatever the physician prescribes. In case of hospitalisation, Jio Health helps patients book a bed in a ward, and arrange for transportation to and from the medical facility.
Other benefits of Jio’s healthcare platform include digitised medical records, remote consultations and evaluation of test reports, and artificial intelligence for preventative healthcare, among other things. The Jio Health model rethinks the established healthcare industry, says Monk’s Hill, and more need to follow, it adds.