|Jonathan L. Moreno - General director Diversatek Vietnam |
According to the Ho Chi Minh City/Danang Healthcare Committee White Book 2020, from the American Chamber of Commerce in Vietnam, the country has the second-highest total healthcare expenditure as a percentage of GDP in Southeast Asia at approximately 5.5 per cent. More than 90 per cent of the population is covered by the national healthcare insurance. Out of pocket payments are also high accounting for approximately 45 per cent of total healthcare expenditures. Less than 20 per cent of hospitals are privately owned, illustrating that Vietnam is still very much a public-dominated health system.
What are some of the biggest challenges? Being primarily a public-dominated healthcare system, Vietnam faces capability and financial constraints. For example, there are fewer than 30 hospital beds per 10,000 people. The World Health Organization recommends approximately 50. There is a low doctor per capita ratio. Increases in life expectancy and people aged 65 and older adds greater healthcare requirements and financial burdens. Vietnam’s rise in non-communicable diseases due to unhealthy lifestyle choices are also burdening the healthcare system.
To meet these challenges, Vietnam must continue encouraging the development of the private healthcare sector to invest in and support its healthcare system’s growth. This growth provides opportunities which are attractive to both private foreign and domestic healthcare companies. For example, the medical device market was estimated at $1.4 billion in 2019 and has consistently grown at more than 10 per cent each year since 2013.
The significant need for more hospital beds provides opportunities for private hospitals and clinics. Vietnam’s pharmaceutical market was estimated at $6.6 billion in 2019, a considerable percentage of Vietnam’s total healthcare expenditure. Yet, the pharmaceutical market is still estimated to grow 10 per cent per year during 2017-2028 to meet the required demand.
Clearly, the opportunity in Vietnam’s healthcare ecosystem is blossoming today. Vietnam has a rising middle class. Vietnamese citizens prioritise personal investment in reliable and proven best-in-class healthcare. Finally, the Vietnamese government has continued to show the world its commitment to the health of the people and residents of Vietnam with its successful management of the COVID-19 pandemic.
I have served as general director of Diversatek Vietnam, a US-owned medical device company, for the past 10 years. I am now leading our successful medical device manufacturing operation to expand from export only to also begin meeting the challenges and opportunities within the Vietnamese market.
Diversatek Vietnam’s experience is not a unique American investment story. Victoria Healthcare, with its multiple branches, has become a health clinic where both foreigners and Vietnamese trust their families to go for “quality medical services with compassion at affordable prices.
American Chiropractic Clinic (ACC) was the first chiropractic clinic opened and registered in 2006 under the Ministry of Health. ACC is committed to operating with top international standards of care by only credentialed doctors utilising state-of-the-art technology.
And Docosan, a healthtech startup, is developing a service to digitalise a key pain point in the patient journey, which is helping to connect patients with the right doctors as well as to book their appointments to ease waiting times.
This is just an abbreviated mention of some American small- and medium-sized enterprises (SMEs) which have organically grown in fertile Vietnamese soil.
The many multinational US pharma and medical device corporations, such as Pfizer, Medtronic, Abbott Laboratories, and Merck Sharp & Dohme are also seeing success and opportunity in Vietnam.
The characteristic of most American companies, both multinationals and SMEs have been demonstrating that the health of Vietnam’s people is the priority. They believe that each person served by the country’s healthcare system, public or private, deserves to have access to the best healthcare services possible. These companies are on the front line of environmental, social, and governance investing.
Over the past two years, American healthcare companies operating in Vietnam have more formally organised to make a greater impact on Vietnam’s healthcare ecosystem. More than 40 healthcare companies have revitalised the American Chamber of Commerce Healthcare Committee representing the sub-sectors of consumer nutrition, healthcare providers, innovative pharmaceuticals, medical devices, private insurance, retail pharmacies, and supporting services.
This diverse organisation is meaningful and unique because there is a broad spectrum of support covering most aspects of healthcare in Vietnam. Since there are logical occasions whereby one or the sub-sectors might have an interest in conflict with another, this group provides support and recommendations to the Vietnamese government by gaining consensus of all the healthcare sub-sectors.
Moving forward, healthcare industry experts anticipate US investments will continue to grow in Vietnam. US-invested healthcare clinics continue to expand to additional outlets and American pharmaceutical and medical device companies continue to expand their headcounts and operations.
The challenges are great but the opportunities are greater. As the Vietnam public sector continues to partner with the private sector to develop healthcare, the Vietnamese public sector will win, the private sector will win – and most of all, the people of Vietnam will win.