Growing Influence, Growing Needs
White Papers | August, 2014
History, geography and its long noted, continually growing affluence and geo-political significance combine to make the Asian market one of vast social, economic and political diversity. The region is disparate in population and the evolution of its various health systems. One thing that the majority of Asian nations have in common is their proactive approaches to regional health challenges in terms of accessibility, cost and quality.
A growing population of educated and affluent consumers are placing demands on healthcare systems. At the same time Asia is facing a “Silver Tsunami,” a rapidly aging population that will come to represent a disproportionate number in terms of the total population across the region. It’s predicted that over 30% of China’s population will be over 60 years of age by 2050, for instance, and the Ministry of Health in Singapore estimates that 600,000 citizens will be 65 or older by 2020.
A massive buildup in healthcare infrastructure will increase access for millions as ambitious plans to develop and expand public and private healthcare facilities are undertaken in countries across the region. Such profound changes to these healthcare systems is challenging, and may be especially so in these countries. Starting new construction projects is relatively easy, with many stakeholders to share blame or make accusations if difficulties and delays arise. Staffing ratios, payment incentives, patient mix, etc. will be even more difficult to manage.
How are governments getting ready to provide increased care that is cost effective, high quality and accessible by more people? Where will they find the talented and experienced professionals to manage these systems? What skill sets, experience and characteristics will these administrators, directors and executives need to bring to the table?
"The demand for healthcare professionals is growing at an unprecedented pace because of the rapidly ageing populations in the world,” says Dr. Chong, Yoke Sin, CEO, Integrated Health Information Systems (IHIS), Singapore, a subsidiary of Singapore’s Ministry of Health Holdings.
According to a UN report, “World Population Ageing: 1950-2050", this massive demographic change will present a major and unprecedented challenge in the 21st century. Countries with populations in which senior citizens comprise more than 7% of the total are considered aging nations. As per that definition much of the world faces the challenge of increased dependency ratio. Asia Pacific is still classified as part of the ‘developing world’ and China and India, with a combined population of over 2.5 billion, aspire to become part of the developed world within the next 20 years. They are just now starting to address the challenges posed by populations aging on such a massive scale.
The increased demand for healthcare and healthcare/IT professionals is fueled by the region’s rapidly aging population, the increase in chronic and disabling diseases and the general public’s higher expectations in terms of improved quality, standards and delivery of healthcare services. This demand will grow exponentially with increased global and regional populations. Many universities have expanded their capacities for the education and training of medical and allied health professionals to deal with the overcrowding of acute hospitals, the inadequate supply of rehabilitation and extended care centers, and community health services.
Medical Inflation no longer affects only rich countries like the US and Canada, but former low-income countries such as China and India. According to the 2012 Medical Trends Report medical costs in the Asian-Pacific region rose by more than 10% in 2011, and predicted the trend to continue. The World Health Organization states that healthcare expenditures in Asia are around 4% of GDP which, while relatively low, nevertheless represents an increase in overall healthcare expenditure of two and half-times between 1998 and 2010.
The very skewed profit margins for different specialties in healthcare and geographical differences in economic gains adversely affects the supply and demand chain of professionals,” says Dr. C.P. Wong, President, eHealth Consortium, Hong Kong. “They flock to lucrative businesses in cardiology, cosmetics and aesthetic surgery, ophthalmology, etc., instead of general family medicine, geriatrics and rehabilitative services. The best doctors stay in developed urban centers instead of rural areas.” This trend, not dissimilar to those seen in even fully developed nations, makes healthcare equity difficult to achieve within all age groups and geographic regions within any given country.
Nevertheless, citizens expect increasingly better public healthcare and that expectation is being met by the development of universal health systems. Indonesia, for example, introduced basic universal health coverage in January 2014, providing 140 million Indonesians with health coverage. The government’s stated goal is to have truly universal coverage by 2019.
In other countries the private healthcare sector and medical tourism is growing rapidly. In the Philippines, Thailand, Vietnam – and even Indonesia – the private sector is bypassing the state. As governments realize that the private sector is an essential partner and complement to the public, laws have been relaxed to encourage investment. These developments represent significant opportunities for private healthcare providers and health related businesses.
With the rapid growth in market economies in Asia the expanding urban middle class’s demand for high quality care has created a vibrant private sector. Market forces have turned certain aspects of healthcare into a new industry in countries such as Singapore, Malaysia and Thailand, leading to imbalances in the distribution of health workers throughout the region.
Many countries have strengthened their social protection mechanisms and essential health services. Examples include the Health Card and 30-baht Schemes in Thailand, the Health Fund for the Poor in Viet Nam, Health Equity Funds in Cambodia and Laos and, in affluent Singapore, the Medifund, a subsidy program for indigent patients.
Experiments in healthcare financing continue, such as compulsory medical savings and social insurance for long-term care. However, existing policies of decentralization and liberalization, equity issues and poor infrastructure will continue to challenge the development of the health sector.
What's being done and where?
Unsurprisingly, China leads the way in expanding their hospital infrastructure. As the country continues to become even more industrialized and urban the expectations of consumers will increase, as well. It’s been noted in both the mainstream and business press that there is a growing class of people in China that is well-heeled, demands high quality in terms of goods and services, and is willing to pay for it. The Ration Institute’s Global Wealth Report states that China is among the countries with the greatest growth in global wealth. In mid-2011 the number of millionaires in China was 10.17 million, and that is predicted to double by 2016. The number of rich families will be between 30 – 50 million.
The government is charged, then, with not only improving access to healthcare for the populace as a whole, but with meeting the expectations of a growing and discerning segment of that population. Plans have been announced for as many as 5,000 new hospitals to be built or converted from company-affiliated, and the participation of private investment is strongly encouraged. How close to that number China comes remains to be seen, but Zhu Hengpeng of the China Academy of Sciences believes it will be at least 4,000. In his estimation at least 2000 company-affiliated hospitals are on track to be privatized, and at least 2000 Secondary hospitals will be sold.
In 2012 the government in Singapore announced plans to double healthcare spending from $4 billion to $8 billion by 2017, as well as plans to increase bed capacity by 30% in acute care hospitals and 100% in community hospitals by 2020. That includes two new community hospitals in Outram and Sengkang. In late 2013 KPJ announced plans to build 10 hospitals in Singapore in the next five years, and financing had been secured. The government’s plans prioritize affordable long term-care services and extending MediShield coverage, especially for older Singaporeans. Renub Research forecasts that the number of medical tourists visiting Asia will be over 1 million by 2015, and Singapore is developing its capabilities to capture that market. A study commissioned by Religare Health Trust estimated that Singapore would receive about 850,000 foreign patients in 2012, generating medical tourism revenue worth $3.5 billion.
The most significant change in the Vietnamese healthcare landscape is the country’s development of a universal healthcare system that will provide basic healthcare for all residents. The quality of care is generally considered good, though access is somewhat limited to large urban areas. Throughout Vietnam there are a total of 903 hospitals, with five in Hanoi that include two dental clinics and a branch of the International SOS Clinic. The latter employs both Vietnamese and expatriate staff, and the languages spoken include Chinese, Russian, English, French, Korean, and Spanish, etc.
In 2011 the Hospital Authority set a target ratio of 1 public hospital bed for every 182 Hong Kong residents. In the last 3 years that ratio has increased to 1 bed per 200 residents, and is set to grow even further over the next decade to 1 bed per 208 residents. When coupled against a background of an aging population, and considering that individuals aged 65 years or older will require far more inpatient healthcare, on average, than younger people, the long term sustainability of Hong Kong’s public healthcare system is put into question and accessibility will be a real issue. Overcrowding of the city's medical facilities is extremely likely and the government will need to make plans to alleviate it.
And while new projects have increased the number of beds that have increased has not been significant. Additional challenges include an aging population that will require more inpatient care, on average, and medical tourists. Only local residents are taken into account when the Hospital Authority and other healthcare planning boards generate forecasts for the development of Hong Kong’s public healthcare system. However, up to 20% of patients occupying beds in public hospitals are not residents, but mainland tourists in Hong Kong specifically to receive healthcare.
The government has proposed building additional private hospitals and a number of developments are underway, including a children’s hospital in Kai Tak and a hospital in Tin Shui Wai. At least three new private hospitals will be built by 2017, adding almost 40,000 new beds in Hong Kong.
Whatever the country in question, certain healthcare issues common within the larger region include:
- Increasing prevalence of chronic disabling diseases, such as type-2 diabetes, obesity and HIV/AIDS
- A general public that expects improvement of the quality of their healthcare and higher standards within systems
- Overcrowding of acute hospitals, inadequate supply of rehabilitation and extended care facilities, and a demand for more community health services.
- An increased focus on individual health and wellness
- Increased/improved access to care
- Integrated care delivery model(s)
- National projects designed to improve the quality of healthcare, systems and accessibility, as well as reduce costs
- Digital healthcare that fully utilizes technology
Global Talent Resource Management
“Healthcare is a very complex sector as compared to other businesses,” observes Dr. Wong. “The multiple specialty groups of professionals and their ranks are far more numerous and complex than any other single industry sector.” And management within the healthcare industry is challenging. In Dr. Wong’s opinion “If someone is brilliant enough to handle senior management in healthcare they should earn much more than in other business and economic sectors,” but financial compensation may not be commiserate with the difficulties inherent in these positions, such as handling complaints, legalities and demands from the community that may unreasonable and difficult to negotiate. This, among other factors, can make recruitment and retention of top quality talent difficult.
By general consensus, talents needed in the healthcare space throughout the region include:
- C-level Management in both Acute/Primary Care and Nursing Homes
- Medical Consultants / Doctors
- Nursing Practitioners / Nurses
- Allied Health Professionals
- Health Informaticians/Analytics professionals
- Data analysts and scientists
- Functional analysts
- Standards experts
- Technology management
- IT operations, including:
- IT security experts
- Enterprise architects
- Database experts
- Interface specialists
- Information engineer
IT is becoming even more crucial in healthcare as a means of adapting to the manpower shortage, particularly in patient care. The demand for experienced IT professionals, trained and familiar with healthcare informatics, is rising. And along with it the need for data analysts, data scientists, functional analysts, IT security experts, enterprise architects, technology managers, database experts, Procurement officers and interface specialists. And the role of the information engineer who can utilize data to determine new ways of achieving outcomes will continue evolve and become even more important.
The adaption of IT in healthcare has been difficult compared to other business sectors. Healthcare involves not only the utilization of traditional business models but at a higher level of service. The medical professional must also navigate the paradoxical roles of being both an advisor and a provider of services. As a result efficiency gains may not be a primary objective from a business standpoint. Healthcare IT, however, does promote efficiency gains, productivities and transparencies and regulatory quality standards. This factor, among others, including the complexity of healthcare services, could add additional challenges to healthcare IT adoption and development. Therefore, despite the rapidly increasing demand on healthcare IT in all countries, progress is slow and often difficult.
Rajendra Pratap Gupta, Chairman, Innovation Working Group – Asia (setup by the UN Secretary General’s Office), says “The reality on ground is that, in these countries, there exists the issue of lack of hard and soft infrastructure to train & retain the initial pool of resources to address this challenge, as well as the lack of technical or the organizational readiness to do so.”
Whatever the nature of the change Asian nations are undergoing in terms of healthcare – expanding infrastructure, changing delivery systems or increased attention to medical tourism, there are challenges in terms of C-level staffing apart from numbers, alone. Tactics to address the many and varied issues in healthcare throughout the region include:
- Increasing capacity in universities for training medical (doctors and nurses) and allied health professionals. New courses on Health Informatics and Health Analysis need to be introduced.
- Working to balance the number of healthcare professionals working within specialties such as cardiology, cosmetic, aesthetic and ophthalmology etc. with areas of more urgent, and relevant need, such as general family medicine, geriatrics and rehabilitative services.
- Attracting and retaining doctors in the rural areas vs. urban/cities.
- Review of the remuneration package in order to attract the best talent, especially for C-Suite positions. Target for recruitment and retention due to the nature of the complexity and demand in Healthcare delivery management.
- Adoption of Healthcare IT to promote efficiency gains, productivities and transparencies, and regulatory quality standards.
Utilize a search firm for senior, strategic hiring, C-level positions and Board members to bring the right level of expertise and innovation, and the right aptitude, to the organizations. Ensure that the firm understands and has a strong connection in the healthcare and healthcare IT industries.
Dr. Kaveh Safavi, Global Head of Heatlhcare for Accenture, recommends a hiring mindset that is focused on long term needs, rather than the immediate. “Give people assignments, not jobs,” he says. “The key is to achieve a shift of one or two standard deviations in overall workforce performance, rather than focusing all efforts on improving the performance of the top 5%.”
The future of healthcare in Asia is exciting and evolving. These issues present opportunities, and challenges, that must be met for the region’s health – physical, social, economic and political – to continue to grow and improve.