Author Topic: Healthcare as an emerging market in provincial towns  (Read 748 times)

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Offline Johnnie F.

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Healthcare as an emerging market in provincial towns
« on: April 14, 2015, 09:50:53 AM »

Second-tier cities account for growing share of Thailand's healthcare market

Solidiance, a leading Asia-centric B2B (business to business) growth-strategy advisory firm, recently published a white paper titled "Future of Thailand's Healthcare Industry in Tier 2 Cities". The following is an excerpt from the company's study.
Bangkok no longer equates to the sole Thai healthcare market. Tier-2 cities in Thailand, like Hat Yai, Udon Thani, Nakhon Ratchasima, Chiang Mai and Khon Kaen, are increasingly expanding with the growth of the private and public sectors.

As these cities have been urbanised, their population has grown more affluent and accustomed to better living standards.

Healthcare services are among the many services that those in these cities with better income and education are now willing to pay for.

Given the rapid change of this market, it is crucial for healthcare companies to better understand healthcare business opportunities in the tier-2 cities.

Thailand healthcare overview

Healthcare expenditure in Thailand is still very low in comparison to Organisation for Economic Cooperation and Development countries and China, but slightly higher than its peers in the upcoming Asean Economic Community (AEC).

The government has been increasing its healthcare spending to strengthen the universal coverage scheme for 10 years. The government budget for the scheme increased from Bt51 billion in 2002 to Bt91 billion in 2007 and Bt106 billion in 2009.

While Thailand is among those AEC nations where the number of hospital beds is lower than the global median, the number of beds in the country is significantly higher than the AEC median.

Despite having relatively advanced economies in comparison to other AEC nations, Thailand's number of doctors per 10,000 of the population is below average, hampering the growth of its healthcare industry.

Key trends in healthcare industry

A large portion of the population lives in Thailand's tier-2 cities, which include Chiang Mai, Khon Kaen, Udon Thani, Ubon Ratchathani, Nakhon Ratchasima, Chon Buri and Songkhla.

Approximately 19 per cent of Thailand's population lives in such cities, compared to 13 per cent in Bangkok, and Solidiance has observed several of the main trends in healthcare within these regions:

Thailand an aged society by 2020

The life expectancy of Thailand's population has increased as healthcare services improve. This will accordingly push up Thailand's ageing population, which is expected to account for 19 per cent of the population and drive demand for healthcare services nationwide by 2020, with treatment and care for chronic diseases among the primary focus for maintaining elder citizens.

The World Health Organisation also forecasts that the ageing population will account for 30 per cent of the population by 2050. The ageing-population boom puts pressure on the government to plan for facilitating the change by improving medical facilities and personnel in public hospitals.

Purchasing power boost

Tier-2 cities have experienced the explosion of urbanisation in the last decade, with an average of 57-per-cent growth in the urbanised population compared to single-digit growth in Bangkok and its vicinities.

In line with the urbanisation, Thai tier-2 cities have also experienced significant growth in household income. And as these urban populations generally possess higher purchasing power and more affordability for healthcare, they demand better standards with more affordability to pay for services in private hospitals equipped with faster and better services.

Growing medical tourism

Medical tourism in Thailand grew by 17.5 per cent CAGR (compound annual growth rate) from 2007 to 2011. In 2012, the number of foreigners seeking medical treatment reached 2.53 million and brought Bt121.6 billion into the country.

The Medical Tourism Promotion project highlighted Thailand's high-quality medical services at relatively more competitive prices compared to medical services in developed countries.

Moreover, the government is promoting the country as a medical hub and medical tourism is expected to be one of the main drivers for private hospital investment in the future.

AEC 2015 to boost healthcare

The AEC is expected to encourage "ribbon development" of urbanisation in tier-2 cities and border provinces, as happened in Bangkok and its vicinities over the past decade.

It is expected to accelerate the urbanisation of tier-2 cities and border provinces, resulting in a higher number of patients who can afford premium medical care.

However, better connectivity with neighbouring countries could lead to an influx of labourers. This puts stress to the government's plans for transmitted-disease control.

Moreover, a scarcity of medical personnel, especially specialists, outside Bangkok will be more critical in border provinces.

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