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Digital Health in Vietnam: a Guide to Market

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Digital Health in Vietnam: a Guide to Market CONTENTS Executive summary 4 Overview of healthcare in Vietnam 5 The healthcare system and patient painpoints 13 The competitive landscape in digital health 16 Opportunities for Australian companies 18 About Austrade 21 Disclaimer Copyright © Commonwealth of Australia 2019 This report has been prepared by the Commonwealth of Australia represented by the Australian Trade and Investment Commission (Austrade). The report is a general overview and is not intended to provide exhaustive coverage of the topic. The information is made available on The material in this document is licensed under a Creative Commons the understanding that the Commonwealth of Australia is not providing Attribution – 4.0 International licence, with the exception of: professional advice. • the Australian Trade and Investment Commission’s logo While care has been taken to ensure the information in this report is • any third party material accurate, the Commonwealth does not accept any liability for any loss • any material protected by a trade mark arising from reliance on the information, or from any error or omission, in- • any images and photographs. the report. More information on this CC BY licence is set out at the creative commons Any person relying on this information does so at their own risk. The website: https://creativecommons.org/licenses/by/4.0/legalcode Commonwealth recommends the person exercise their own skill and care, including obtaining professional advice, in relation to their use of the information for their purposes. Enquiries about this licence and any use of this document can be sent to [email protected]. The Commonwealth does not endorse any company or activity referred Attribution to in the report, and does not accept responsibility for any losses suffered in connection with any company or its activities. Before reusing any part of this document, including reproduction, public display, public performance, distribution, dissemination, communication, or importation, you must comply with the Attribution requirements under the CC BY licence. Published July 2019 02 DIGITAL HEALTH IN VIETNAM DIGITAL HEALTH IN VIETNAM 03 EXECUTIVE SUMMARY OVERVIEW OF HEALTHCARE IN VIETNAM Vietnam’s healthcare landscape is changing. The country. Smart solutions are being strongly encouraged country’s strong economic and population growth is that utilise big data, artificial intelligence (AI), cloud KEY DRIVERS creating a new middle class which is demanding computing and mobile technology to help alleviate higher-quality medical treatment. These affluent, Vietnam’s overcrowded public hospitals and increase Steady economic growth and a growing population Rising disposable income and a rapidly expanding digitally-literate consumers are spending more on their quality of care. middle class healthcare, leading to a rise in demand for private There are three key drivers for healthcare spending in providers and digital health services. Together, these factors are opening up new opportuni- Vietnam: strong economic growth, a rising population, The World Bank awarded Vietnam ‘middle-income’ ties for Australian companies in Vietnam’s digital and a booming middle class. Over the past two status in 2010, and today, the country is the sixth largest The population of Vietnam is not just becoming richer. healthcare space. In this new report, Digital Health in decades, Vietnam has seen an average annual GDP economy in ASEAN’s 10-member trading bloc. Over the It is also growing older. This is resulting in a shift in the Vietnam: A Guide to Market, Austrade looks at the growth rate of 6.4 per cent.1 This has made it one of the forward period, Vietnam will see a huge increase in its burden of disease from communicable to non-commu- enablers for the adoption of digital healthcare solutions fastest-growing economies in the Association of middle class. In 2015, roughly 10 per cent of the nicable conditions like diabetes and cancer. These in the country, as well as some of the difficulties that Southeast Asian Nations (ASEAN). Meanwhile, Vietnamese population were part of the global middle non-communicable conditions require coordinated, face new market entrants. The report gives an overview Vietnam’s population is set to rise from 95 million in class. By 2035, this is projected to increase to over half long-term care solutions. of Vietnam’s healthcare landscape – including its 2019 to 103 million in 2025.2 Today, Vietnam is of Vietnam’s population.3 This growth in disposable challenges and opportunities – and describes the main benefiting from a demographic dividend, as 70 percent income will, in turn, lead to a rise in spending on private Meanwhile, Vietnam is embracing the Fourth Industrial domestic and international players already operating in of the population is of working-age (18–65 years old). healthcare. Private healthcare expenditure is forecast to Revolution. Internet access is widespread and the the market. It also includes key commercial opportuni- The country has a ‘golden’ population ratio with just one rise from US$6.7 billion in 2016 to US$9.7 billion in country has seen rapid development in 4G and 5G ties available for Australian companies as well as some dependent for every two people in work. 2021.4 Already, this growing, affluent group is spending mobile communication technologies. Building on these tips on doing business in Vietnam’s emerging digital more on healthcare services and demanding foundations, the government of Vietnam is driving a health sector. higher-quality medical treatment. digitalisation agenda in hospitals and clinics across the KEY DRIVERS OF HEALTHCARE EXPENDITURE IN VIETNAM Strong economic growth, a rising population and a booming middle class 95 million 6.4% Estimated to rise to 103 The average annual growth million in 2025 rate in GDP since 1999 70% population US$ 2,587 Proportion of Vietnamese GDP per capita, who are working age with disposable income rising rapidly 31 years 50% population Median age of Vietnam's Proportion of population citizens who will be 'middle class' by 2035 04 DIGITAL HEALTH IN VIETNAM DIGITAL HEALTH IN VIETNAM 05 Increasing healthcare expenditure KEY TRENDS Developing healthcare is one of Vietnam’s top priorities, per cent.5 Healthcare expenditure was 6.5 per cent of and healthcare spending is set to rise from US$15.6 GDP in 2018 – among the highest in ASEAN. Meanwhile, The increasing burden of chronic disease in Vietnam An emerging ageing population billion in 2018 to US$42.9 billion in 2028. This equates per capita spending on healthcare is expected to triple to a 10-year compound annual growth rate (CAGR) of 11 from US$161 in 2018 to US$408 in 2028.6 The nature of ill health in Vietnam is changing. In terms Vietnam is often considered a ‘young’ country. Thanks of health spending, the country is experiencing a shift to a falling population growth rate, however, that from communicable to non-communicable diseases. landscape will change rapidly over coming decades. HEALTHCARE EXPENDITURE Diabetes, cancer and cardiovascular conditions – among Vietnam’s median age is predicted to hit 42.1 in 2050, others – are becoming more common. According to the up from 30.4 in 2017. Meanwhile, the proportion of the World Bank, non-communicable diseases accounted for population aged over 65 is set to triple from 7 per cent 7 Vietnam healthcare expenditure forecast (US$bn) 77 per cent of deaths in 2016, up from 68 per cent in in 2015 to 21 per cent in 2050. UNESCO has identified 2010, and continue to climb. This has created a greater Vietnam as one of the world’s fastest-ageing societies. need for long-term, coordinated healthcare services This trend will increase both the burden on healthcare 50 specifically catering to these chronic diseases. facilities and the demand for services to care for older 42.9 people. Centres which can provide such care have 40 been built in major cities including Hanoi, Ho Chi Minh City and Hue. 30 US$bn 20 15.6 10 0 2018 2028 Vietnam healthcare expenditure: 2011-2016 14 6.6% 8% 6.7% 6.7% 12 6.2% 6.3% 6.1% 6% 10 8 4% US$bn 6 4 2% 2 0 0% 2011 2012 2013 2014 2015 2016 Healthcare expenditure (US$bn) Healthcare expenditure % of GDP 1. ‘Doing Business in Vietnam 2018’, PricewaterhouseCoopers (2018), p.18. 2. BMI Pharmaceuticals and Healthcare Report, Q2 2019 3. ‘Vietnam 2035: Towards Prosperity, Creativity, Equity and Democracy’, The World Bank and the Vietnam Ministry of Planning and Investment (2016). 4. BMI 5. BMI Pharmaceuticals and Healthcare Report, Q2 2019. 6. Ibid. 06 DIGITAL HEALTH IN VIETNAM DIGITAL HEALTH IN VIETNAM 07 DIGITAL HEALTH ENABLERS VIETNAM Vietnam enjoys strong internal enablers for future adoption of digital health solution 60% 07 of Vietnam's hours population the average time is aged between Vietnamese spend 25 and 54 online each day 130% 40% mobile phone smartphone subscription penetration rate, which is growing rate, and smartphone rapidly ownership is rising rapidly 67% 95% Digitalisation of healthcare: digital health enablers in In addition, Vietnam has seen rapid development in internet households Vietnam mobile communications technologies, with 4G penetration covered by 4G networks now covering over 95 per cent of households. rate, with an annual networks, with 5G Vietnam is well positioned to adopt digital health On current forecasts, 5G networks are set to follow in growth rate of 28% pilots now underway solutions. More than 60 per cent of Vietnamese are 2020, bringing with them the potential to enable further aged under 54 years old.8 And this young population is digital transformation. rapidly embracing new communication technologies. The number of people using Facebook in Vietnam hit The country’s technology infrastructure is also moving 37 million in 2017. This is set to rise to 44 million in towards cloud-based services, creating opportunities to 2020, giving Vietnam the seventh highest number of develop innovative and cost-effective solutions to Facebook users in the world – a good proxy for deliver healthcare services.
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