Myanmar healthcare industry set to pass 2 billion mark

09 December 2015 5 min. read
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The Myanmar economy, following liberalisation, is seeing strong increases across a variety of sectors. Specifically healthcare is a growing industry and is set to surpass $2 billion in FY 2015-2016, up from $704 million in 2010, research by Solidiance shows. With a rise in focus on health comes a rise in demand from the population, creating opportunities for private players. Between 2011 and 2014, the number of private hospitals jumped by 10%. One area in which international private players can play a significant role is in meeting demand for Diagnostic Imaging & In-vitro Diagnostics in the country.

Myanmar has recently exited from economic isolation as its ruling class started to open up the country to democratic processes and a liberalisation of its economy. The effect of various sectors has been stark, with vehicle registration following rule changes, for instance, going through the roof.

According to a new study by consulting firm Solidiance, the healthcare market in Myanmar is also being transformed as liberalisation filters into the market. As part of the study, titled ‘Emerging Opportunities in Myanmar’s Diagnostic Imaging & In-vitro Diagnostics’, the current state of affairs of the Myanmar health sector is measured and a number of opportunities, particularly in Diagnostic Imaging & In-vitro Diagnostics, are considered.

Healthcare expenditure Myanmars

Healthcare expenditure
Total healthcare expenditure is set to cross the $2 billion mark in the FY 2015-2016, up from $1,903 million in 2014 and also triple the amount of $704 million spent in 2010. Growth in the healthcare system is in part linked to its development, as more and more people become aware of the need for regular health check-ups for early detection of non-communicable diseases.

Providing healthcare to the country’s 51 million people, of whom 70% live in a rural setting, is by no means an easy task. The country is also burdened with one of the region’s lowest number of doctors per 10,000 people at 6.1, compared to 19.5 in Singapore and 23 in Japan.

Healthcare expenditure comparison

Increasing funding
Myanmar’s total expenditure as a percentage of GDP is still relatively low however, at 2.7%. In Indonesia the percentage is 3.1%, in Malaysia 4% and in regional star Vietnam 6%. Public spending as a percentage of GDP is however, up considerably on 2007, when the WHO estimated it to be 1.9%, the lowest in the world to supply records to the WHO that year. In terms of per capita spending, the country currently invests $35, considerably lower than its neighbours. Indonesia spends $107, Vietnam $111 and Malaysia $423, while Singapore spends as much as $2,507 on average.

To further strengthen the country’s health offering, the Government is planning to increase healthcare budget allocation with an annual growth rate of 6% until 2020. This year, the increased focus on heath will see the country seek to train a further 5600 medical professionals and 1300 nurses over the course of the current budget in a bid to increase capacity.

Healthcare expenditure by financing agent

Out-of-pocket expenses
There are a number of different financing agents active within the wider healthcare ecosystem in Myanmar. The vast majority (78%) of healthcare financing comes from out-of-pocket (OOP) payments, which are mainly used for self-prescribed medicine, diagnostics and private clinics. OOP expenses, a burden for many, have come down somewhat since 2011, when it sat around the 82% to 85% level. Public hospitals subsidising some costs (15%) for diagnostics and providing medicine for the most needed people. International NGOs (INGO) are financially supporting primary healthcare services and facilities in rural areas (6%).

Hospital types and beds

Hospital beds
According to the report, there are around 1,192 hospitals in the country, of which the large majority (69%) are public primary care hospitals. Public secondary care hospitals make up 7% of the total, while 3% are tertiary care hospitals. Private hospitals make up 14% of the total. One aspect of private hospitals, however, is that they tend to have lower number of available beds. The 14% share of total hospitals for the private offering provides only 7% of available beds.

The country also has a relatively small number of private hospitals comparered to the total, when considering regional players. Indonesia for instance, has more private hospitals than public hospitals, while Thailand has around 24% of its hospitals private. Private hospitals in Myanmar have increased in number by 10% between 2011 and 2014.

Number of hospitals in Myanmar 2014

International opportunity
The increase in demand for services, as well as the expansion of the healthcare budget is, according to the consultancy, creating considerable opportunity for private players to enter the market. This is particularly true for the Diagnostic Imaging & In-vitro Diagnostics. For international players to take advantage of the growing opportunities, the report notes that “Pricing is a key challenge that needs immediate attention especially in the private sector. Local hospitals, clinics & laboratories need assistance from global healthcare companies in devising a value proposition that would be appealing to the patients.”