The rising demand for healthcare has made Vietnam a promising destination for domestic and foreign investors.
According to the Finance Ministry’s Department of Public Expenditure, society’s total spending on healthcare compared to gross domestic product has been increasing. Since 2008, the State budget’s spending on healthcare has risen at a faster pace than the budget’s overall spending growth rate, reaching about 7 – 8 percent of total State expenditure.
In Vietnam, private medical establishments have been developing strongly in recent years. While there were no private hospitals before 1993, the number of such facilities has reached 206 at present. More than 35,000 private clinics have also been opened nationwide.
Dilshaad Ali, an advisor of DG Medical – a healthcare solution providing company, noted several important factors making Vietnam’s healthcare sector attractive to investors, including an aging population, fast economic growth, changing lifestyles, and rising demand for health insurance.
He added as the middle class is flourishing, people have also increased their spending, leading to the mushrooming of private medical establishments in big cities.
More than 80 percent of Vietnam’s population is covered by health insurance and five percent have private health insurance. Meanwhile, 73 percent of the population pay hospital fees in cash. Notably, the healthcare public-private partnership model is still in the initial stages.
These factors contribute to investors’ interest in Vietnam’s healthcare market, Ali said.
Other experts said apart from soaring demand for high-end services, the State’s plan to divest capital from many big pharmaceutical firms has also encouraged private investment.
The recent wave of private investment in the healthcare sector began in 2015 with several mergers and acquisitions (M&As). Recently, the Hoan My Medical Corporation has performed multiple M&As to expand its network, the Nha khoa My group has merged into the Sun Medical Centre, and Japan’s Taisho Pharmaceutical Co. Ltd has spent an additional 3.4 trillion VND (145.8 million USD) to buy almost 67 percent of DHG Pharmaceutical JSC – the biggest pharmaceutical company in Vietnam.
Deputy Director of Ho Chi Minh City’s Department of Health Tang Chi Thuong admitted that the State-owned system hasn’t been able to meet rising demand for healthcare.
He noted in 2018, there were more than 45.3 million outpatient visits and 2.5 million inpatient stays in medical facilities in HCM City, and these figures are still growing, worsening overloading at central hospitals.
Echoing the view, Secretary General of the HCM City Society for Reproductive Medicine Ho Manh Tuong said the ongoing outflow of Vietnamese people to other countries to receive treatment shows the local healthcare system hasn’t kept up with demand.
As the city lacks funds for public medical services, it is necessary to issues policies encouraging private investment, he added.