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Home , Health in Vietnam, Internet in Vietnam, Vietnam

Digital Health in

Market Intelligence Report

Department for International Trade report prepared by KPMG and Oxford Clinical Research Unit — December, 2020 Table of Contents

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Foreword Overview of Digital health Key areas in Digital health Market access Vietnam’s economy digital health regulation strategies for UK companies Macroeconomic Overview of digital health Health information Decision 4888/QD-BYT - indicators market in Vietnam technology National agenda for e-health adoption Vietnam’s healthcare Local digital health Telehealth / Telemedicine sector overview Cyber Security Law Consumer health and Regulation Telecom Infrastructure: electronics Connectivity Big Data / AI-based AI and Big Data in medical devices digital health Potential hurdles Opportunities for for UK companies: UK companies legal perspectives on procurement process Foreword

elcome to the Digital – Market intelligence report! ver the past two decades, Vietnam has achieved laudable improvements in key metrics such W Oas , , and access to affordable medicines. This success is the result of the In an age of growing challenges from non-communicable diseases, and emerging threats from infectious diseases government’s concerted effort to modernise the health system and expand access to affordable care. At the time such as COVID-19, digital health has the potential to offer new solutions and alleviate pressure on overstretched of writing, Vietnam has extended Universal Health Coverage (UHC) to 90% of the population, and targets to reach health systems. Digital health technology can empower patients to actively participate in their care, improve clinical 95% by 2025. This coverage ratio leads its regional peer markets. The country nevertheless still has a relatively high out-of-pocket expense ratio while spending the highest amount of GDP on healthcare. It is therefore likely outcomes and enhance operational efficiency. that if Vietnam hopes to continue to expand access to quality care and maintain sustainable health financing, the Innovation and technology have touched many aspects of life in Vietnam and healthcare is no exception. In a health system will need to find a way to provide more services, while expending fewer resources per patient. concerted effort to embrace Industry 4.0, the Vietnamese government has committed to a national agenda that Digital health is one answer to achieving scale of access while improving clinical outcomes and maintaining costs. seeks to harness the potential of digital solutions across the health system. This has set a solid foundation for digital To do this, the government needs to expand market access and encourage international business and clinical transformation in Vietnam. partnerships.

Vietnam and the UK share many of the same aspirations. We seek to utilise digital innovation to expand equitable UK companies have many of the missing digital pieces Vietnam needs to accelerate progress towards its access to quality care, in line with Sustainable Development Goal 3, on good health and wellbeing. At healthcare development goals. At the same time, digital health companies that understand Vietnam’s unique the early stage of digital transformation, Vietnam has plenty of opportunities for innovative solutions from the UK. In population health challenges and can provide collaborative solutions will gain access to one of ’s fastest this comprehensive guide, we provide insight into current market opportunities across health informatics technology, growing healthcare markets. Through this market access, companies can achieve early-entrant advantage and telemedicine, AI and Big Data. The report also explores the future direction of digital healthcare transformation in meaningfully help Vietnam’s financial and physical burden of disease. Vietnam and potential challenges facing new entrants to the market. This document is intended as an introductory guide to Vietnam’s digital health market. Please do not hesitate to The UK and Vietnam have a rich history of collaboration, and this year we celebrate 10 years of strategic partnership. I reach out to its authors or Department for International Trade as you begin your . am delighted to support UK organisations interested in entering the Vietnamese market and I wish you every success in exploring long-term partnerships in Vietnam that will further strengthen our bilateral healthcare ties. Enjoy the read For more information on these opportunities and how we can help you do business in Vietnam, please reach out to our team.

Luke Treloar Guy Thwaites Louise Thwaites Managing Director – Director Senior Clinical Research Fellow KPMG Global Strategy Group Oxford University Clinical Oxford University Clinical Emily Hamblin National Head – Research Unit Research Unit Department for International Trade in Vietnam Healthcare and Life Sciences December, 2020 Vietnam and

Contributors

Vo Thi Kim Ngan Du Vu Hoang Tuan Le Hang Nga Associate Director Manager Assistant KPMG Global Strategy Group KPMG Global Strategy Group KPMG Global Strategy Group Vietnam and Cambodia Vietnam and Cambodia Vietnam and Cambodia

4 Market Intelligence Report Market Intelligence Report 5 Economic development

Over the last several decades, Implications to digital health Vietnam has achieved rapid Overview of economic and social development, Indicator Issue Implication which has driven the demand for Increased An increase in living Some of the most notable more advanced healthcare services. living standards and healthcare examples include consumer Beginning in 1986, the Doi Moi standard expenditures will likely health electronics (e.g. hi- reforms initiated a broad-based expand Vietnam’s access tech wearables) and telehealth economic transformation, which to digital health, which (e.g. remote health diagnostics, opened a largely closed economy can be provided at a monitoring, intervention, and to international markets and trade lower incremental cost education). The application Vietnam’s economy and began a series of ‘pro-business’ than traditional models of telehealth will play an reforms. As a result of these of care. important role in supporting policies, Vietnam achieved high the diagnosis and treatment of economic growth rates that lifted non-communicable diseases the country to across the population. However, Macroeconomic indicators economic status. This strong this poses a challenge for the economic expansion will likely lower income groups with continue to benefit the country by less access to technological Population creating an attractive growth story advances, particularly those in that will further attract Foreign remote, underdeveloped, or rural areas. To attain universal Population overview Implications to digital health Direct Investment (FDI) (growing by 13.5% per annum from 2014 health coverage for the entire population, further government At the time of writing, Vietnam has Indicator Issue Implication to 2019 in terms of registered capital), which in turn will bring support and policy incentives will a population of 96.5 million, making Golden Among the working-age Vietnam is well positioned to th much needed technology and be required. it the 15 most populous country population population, nearly half are adopt digital health solutions. th rd knowledge transfer3. Vietnam has in the , 8 in Asia and 3 in structure under 34 years of age, For instance, there will be a signed 13 Free Trade Agreements Asia (behind and which is favourable for potentially large addressable Vietnam’s GDP per capita and real GDP growth from 2017 to 2025f 1 (FTAs) further accelerating inbound ) . Despite the addition of the adoption of innovative market for consumer health FDI. Most notably of which are around 1 million people per annum, science and technology. electronics in the country. the ASEAN Free Trade Agreement the rate of Vietnam’s population Vietnam’s GDP per capita and real GDP growth (2017 to 2025f) growth has slowed gradually, from Ageing The golden population The application of Big Data (AFTA), the Comprehensive approximately 2% per annum in the population structure is also and AI can bring geriatric care and Progressive Agreement of 5,000 9.0 8.2 4,303 early to around 1.1% throughout associated with an ageing solutions. Vietnam can apply Transpacific Partnership (CPTPP), 8.0 6.8 7.1 7.0 3,964 the 2010s. By 2024, the ’s population. The faster passive sensors and other near- and more recently the EU Vietnam 4,000 3,656 7.0 3,120 rate is expected to growth rate of the people patient monitoring technologies FTA (EVFTA). These trade 2,828 6.0 3,000 2,567 2,715 6.4 6.4 6.4 slow to 0.8% per annum, reaching a aged 65 years and above to enable remote care solutions agreements are lowering tariffs 2,366 6.0 5.0 2 will create a burden on that link an individuals’ behaviour on many including medical 4.0 total population of 101.1 million . 2,000 healthcare facilities and to treatment. equipment and will help position 3.0 demand for care services. Vietnam as an attractive investment As Vietnam’s birth-rate declines, its At the same time, electronic 1,000 3.0 2.0 average population age will continue This will be particularly health records will pave the and trade destination. At time of 1.0 to rise. Currently, Vietnam is enjoying acute for elderly-care in way for more efficient medical writing, Vietnam is in discussions 0 0.0 a so-called “golden structure” in its the country. information management. with the UK on a possible bilateral 2017 2018 2019 2020e 2021f 2022f 2023f 2024f 2025f age demographics, with 70% of the Governments and policymakers agreement. Such an agreement GDP per capita (USD) GDP Growth, % y-o-y population aged 15 to 64 years. This can utilise relevant population- would extend similar market access age structure has been a key driver based data to initiate preventative benefits to UK-based organisations. GDP Growth & Healthcare expenditure per capita in 2019 in the country’s recent economic programs and make decisions development and will continue to at a health-system level. Growth in FDI is driving GDP per GDP Healthcare expenditure push its transition from a largely Health workers will be able capita and the rapid expansion of Country Growth (%) per capita (% of GDP) agrarian economy to one led by to deliver healthcare services an urban middle class. This middle more effectively, thanks to the class is expected to account for export and domestic Vietnam 7.1% 6.0% consumption. After 2030, Vietnam will availability of historical health up to half of the total population by 20354 and will, according to the however begin to age rapidly, with the records and related training Philippines 6.2% 4.6% over-65 years of age cohort growing programs. , drive growth in per at an anticipated 5.3% per annum. The adoption of remote capita healthcare expenditures. 4.7% 4.0% This could drive the growth of the monitoring and telemedicine This expansion in healthcare current “” population of elderly patients will lessen expenditures will be more apparent Indonesia 5.2% 3.7% distribution 300% by 2050, potentially hospital overcrowding by allowing in higher-end care and in urban straining health and related resources. doctors to monitor patients from areas, which could expand rural 4.1% 3.7% their homes, and thus freeing healthcare access inequalities. hospital resources such as beds 1. Prospects, the 2019 Revision and saving administrative costs . 3. The Ministry of Planning and Investment 2. Fitch Solutions 4. Fitch Solutions Source: Fitch Solutions

6 Market Intelligence Report Market Intelligence Report 7 Vietnam’s healthcare sector overview

Health status in Vietnam Healthcare structure in Vietnam

The World Health Organization (WHO) recently estimated that non-communicable diseases now account for 77% Healthcare system of all death and disability in Vietnam. Of these, cardiovascular disease and cancer are the two most common contributors to premature death and loss in disability-adjusted life years (DALYs), followed by diabetes/chronic kidney ORGANISATIONAL STRUCTURE OF HEALTHCARE disease as the 3rd most common cause of death and 4th cause of DALYs. Many of these deaths can be prevented HEALTHCARE SYSTEM INSTITUTIONS with improved diagnosis, monitoring, and tech-enabled early-stage interventions. Administration Levels Hospitals Health centres Academic institutions There is increasing recognition of the important interactions between non-communicable diseases co-existing with infectious diseases, particularly cardiovascular diseases. For example, hepatitis C Virus infection is associated with Ministry of Health (MOH) an increased risk of cardiovascular disease and represents a global burden of the loss of 1.5 million DALYs. This    tragic burden falls disproportionately on low-income and middle-income countries. Risk of type 2 diabetes mellitus MOH is a governmental agency responsible for is increased by almost 70% in Hepatitis-C infected patients. Similarly, in people living with HIV, increased risk of national management and regulation development, Central general and Central Medical and management of national hospitals, research and cardiovascular disease has been noted. Whilst there is limited data on co-existing cardiovascular and infectious specialty hospitals (Class I preventative health pharmaceutical Pasteur institutes, and colleges. & II) centres universities and colleges diseases in Vietnam, the high rates of both means that improving diagnosis and management of these is likely to have TERTIARY a particularly significant impact in Vietnam. Other ministries Public Private Public Private N AT IO N AL Other ministries including MOD, MOT, MOIT, and Implications to digital health MARD run healthcare network of hospitals and clinics

Indicator Issue Implication Department of Health    NCD impact on The nature of ill health in Vietnam is Telehealth can promote a healthy lifestyle Department of Health is an agency under the Provincial general and Provincial health changing from communicable to non- and encourage preventative measures through Provincial secondary Provincial People’s Committee, supporting provincial specialty hospitals (Class I preventative health medical schools communicable diseases. This trend is patient risk-factor monitoring in pre-disease healthcare management and preparing decisions, & II) centres expected to continue, which will create a stages. The utilisation of Big Data and AI in PROVINCIAL directives, plans, etc. across all aspects of the (63 ) greater need for long-term and coordinated digital health allows for real-time, population- healthcare sector on the provincial level. Public Private Public Private healthcare services that cater to chronic based, forward-looking data that can help avoid diseases. Digital health is well-positioned to or mitigate non-communicable diseases while Health Bureau  SECONDARY  help these challenges. enhancing care delivery.

District Health Bureau is an agency under the District District general hospitals District preventative People’s Committee, supporting ’ healthcare (Class II, III & IV) health centres Top causes of death in 2019 & percentage change from 2009 - 2019 management and preparing decisions, directives, DISTRICT plans, etc. across all aspects of the healthcare sector Public Private % change from 2009-2019 (645 districts) on the district level. Public Private

31% 18% 52% 45% 25% 32% 28% 63% 30% Commune Health Centre 

107,659 Commune health Commune Health Centre is an agency under the centres Commune People’s Committee, supporting communes’

86,130 COMMUNE healthcare management (providing primary health care PRIMARY (11,162 services, most basic care and health education). Public Private 38,005 communes) 26,191 22,489 24,002 17,118 19,758 18,227 Availability of public / Non-availability of public / 13,825 14,367 private sector private sector 11,387 9,391 11,044 2,0452,614 1,2572,054

Lung cancer LRI* Ischemic heart Stroke COPD Cirrhosis Alzheimer’s Diabetes Source: The Ministry of Health, World Health Organization disease disease Source: World Health Organization

8 Market Intelligence Report Market Intelligence Report 9 Hospital capacity

Hospital numbers Healthcare professionals

Vietnam’s public sector has a decentralised hospital system classified into four groups Vietnam ranks on the lower end of countries with regards to trained Healthcare corresponding to four administrative levels. At the central level, specialised and general Practitioners (HCPs) per capita. This shortage is particularly acute in hospitals provide secondary and tertiary care, and are active in research, and function as specialised care, such as cancer, palliative care, geriatrics, and mental health. teaching hospitals. At the provincial or city level, hospitals and medical centres mostly provide The distribution of health workers between urban and remote areas is also a secondary and tertiary care, combined with outpatient services. Each is divided challenge, with higher concentrations in urban areas. into roughly 20 districts. District health centres offer primary and some secondary care services. Finally, at the communal level, Communal Health Centres (CHCs) offer primary and When compared with regional peer markets, one can see Vietnam’s shortages preventative health services. Communal healthcare centres are generally the first point of are particularly acute in trained nurses. As of 2018, there are 77,995 physicians contact for much of the population, especially in rural areas. and 128,386 nurses in the country, which is relatively low compared to the total population (around 1 physician and 1.3 nurses per 1,000 residents). The Vietnamese private healthcare sector has started to play an important role as a provider of care in cities. The percentage of private hospitals is projected to increase rapidly in the UK 2.12 coming years as domestic corporations develop hospital groups and clinic chains across the 6.38 0.47 country. Some of the examples include Hoan My Medical Corporation, and Vinmec Hospital Thailand 2.6 0.82 Network of . Main drivers behind growth are: Vietnam 1.34 1.25 Philippines 8.54 01 Many public hospitals lack needed infrastructure investment; 1.99 Malaysia 4.31 0.36 Rising personal income allows patients to increase out-of-pocket payments for Indonesia 1.29 02 2.39 private sector and/or premium healthcare services and 5.84 0 2 4 6 8 10 FDI encouragement policies allows foreign investors to build wholly 03 foreign-owned hospitals. Physicians per 1,000 of total population Nurses per 1,000 of total population

Source: Fitch Solutions Number of hospitals in Vietnam (2013-2018)

1,085 1,094 1,069 1,063 1,071 1,077 C AG R ’13-19 Indicator Issue Implication Hospital Congested and Digital health can help address capacity Total hospital numbers 1.3% capacity overcrowded constraints faced by public hospitals By and hospitals remain a introducing solutions such as telehealth professional challenging issue and electronic health records, more Public hospitals 1.2% staffing in Vietnam. This patients, even in rural settings, can 165 165 169 171 185 193 strains resources gain access to needed healthcare, thus Private hospitals 1.6% in central and also improving hospital efficiency and 2013 2014 2015 2016 2017 2018 provincial reducing patient crowds. From a health- hospitals economics viewpoint, telehealth and Public hospitals Private hospitals and creates electronic health records can also help Source: Fitch Solutions, World Health Organization, General Statistics Office of Vietnam inefficiencies at healthcare providers cut cost by reducing the district and paperwork, improving safety, eliminating community levels. duplicative tests, and improving health outcomes. The latter drives economic benefit by lowering readmittance Hospital beds through long-term remote monitoring. AI and wearable tech have the potential Over the past five years, according to Fitch Solutions and the General Statistics Office of to improve quality of care while reducing Vietnam, approximately 6,000 hospital beds per annum have been added to the healthcare cost of care in Vietnam. By extending system, corresponding to a CAGR of 2.5% (from 2013 to 2018). Of these additional hospital beds, patient access to AI-enabled wearable nearly 16% are at national level, while 43% and 41% are added to provincial and district levels, devices, healthcare professionals respectively. This demonstrates the effort of the government in alleviating the overloaded capacity can gain a real-time view of patient of hospitals across Vietnam. conditions and make more accurate and faster diagnoses. Layering AI and Big However, the proportion of private hospital beds remains low (5%), mainly due to the marginal Data into the monitoring and diagnosis volume of private hospitals. Nevertheless, the government has indicated its intent to grow the process will give clinicians the ability ratio of private hospital beds to 20% of total hospital beds through public and private partnerships. to analyse multiple patient data sets simultaneously to identify irregularities In terms of the number of hospital beds per capita, there are large regional variations. More and take early-stage preventative action specifically, Vietnam’s North Central and Central Highlands have far fewer hospital beds per capita when interventions are more effective compared to other regions. Recently, the shortage of hospital beds has increased: bed to patient and cheaper. occupancy rates has reached 120-160% in some public hospitals. This increase is often most pronounced in central hospitals in major cities.

10 Market Intelligence Report Market Intelligence Report 11 Healthcare insurance system in Vietnam Healthcare quality and access

Vietnam has made great strides in expanding health insurance coverage. After introducing compulsory insurance in 2015, Vietnam now aims to grow the coverage rate of health insurance, setting the goal of reaching 95% in 2025. Patient journey Medical tourism Nevertheless, out-of-pocket expense ratios in Vietnam are some of the highest in ASEAN, which puts considerable Inpatient and outpatient care Inbound medical tourism financial pressure on lower income households. In Vietnam, outpatient visits outpace inpatient Medical tourism has flourished globally over the past It should be noted however, Vietnam has made substantial progress in lowering out-of-pocket expense from 61% in admissions by two orders of magnitude. Overall, both decades and is now valued at over USD53 billion. This 1999 to 45% as of 2019. inpatient admissions and outpatient visits remained value is expected to grow at 12.9% through 20258. consistent from 2014 to 2019, with 5,600,000 cases Asia Pacific is a top source of, and destination for, Healthcare expenditure admitted to hospitals and approximately 156,000,000 medical tourism patients. This, however, is still in the 19.5 C AG R ’14-19 ’19-24 outpatient visits served per year respectively7. early stages in Vietnam. While competitively priced, the 14.4 Total 13.1 13.8 4.3% 6.3% Overcrowding remains prevalent, given the fact that number of foreign patients in Vietnam is still relatively 11.7 11.8 12.2 59.6% expenditure small compared to Singapore, Thailand, and Malaysia. 54.4% 55.5% Public hospitals often run inpatient care at over- Most of Vietnam’s inbound medical tourists come from 51.5% 50.2% 51.7% 53.3% 5.9% 7.8% expenditure capacity levels, meaning more than one and Cambodia. For now, Vietnam is not considered patient is assigned to the same hospital as a top destination for medical treatment due to a lack 45.6% 44.5% 40.4% Private 48.5% 49.8% 48.3% 46.7% 2.5% 4.3% expenditure bed, and of health infrastructure investment and regional brand 2014 2015 2016 2017 2018 2019 2024 healthcare facilities will often see between recognition. 5,000-8,500 outpatients visit per day, Private (USDbn) Public (USDbn) Outbound medical tourism particularly at central hospitals. As the local healthcare sector continues to experience Source: Fitch Solutions, World Health Organization, General Statistics Office of Vietnam capacity constraints, a significant number of upper- Vietnam’s efforts to reduce the average inpatient stays middle to high income patients have chosen to receive have not yet seen success. Average stays remain at or healthcare services abroad from regional countries such Public healthcare insurance above a week since 2013. While this is comparable to as Singapore, Thailand, Malaysia, or even further afield levels seen in the Philippines and Indonesia, Singapore, in the . The total amount paid for these Malaysia and Thailand have managed to shorten this services abroad is estimated to be USD2 billion yearly9. Person working in the , 88% Population indicator to less than 5 days. For patients, a lengthier forestry, and salt Coverage (2018) stay means higher costs and risk of nosocomial industry; household members Critical factors for why patients prefer overseas (“healthcare-acquired”) infections from other patients treatment to local care can include, Children under age six, near poor individuals, at the hospital. At the same time, for hospitals, higher and students length of stay results in lower patient capacities.

Employees in non-state enterprises with more than 1 reputation of foreign facilities, employee, other organisations, war veterans, and the poor

National Assembly Representative, People’s Council member, preschool teachers, social welfare groups, dependents of police and qualifications and experience of armed forces staff foreign doctors, Civil servants, employees in state enterprises, employee in private enterprises with more than 10 employees, pensioners, and people on subsistence for the elderly 2% Population Coverage (1992) availability of medicines, and 1992 1998 2005 2008 2018

better service and overall quality of care. Private healthcare insurance

In 2018, 33 million people (35% of total population) However, after the increase in healthcare fees at were covered by some forms of private health large public hospitals brought about by the so-called As well, inconsistency in diagnosis between local insurance. This coverage, however, only represents 2% ‘autonomy mechanism’, more people are expected to healthcare facilities can also play a role in the decision of total health expenditures5. Low coverage rates are join private health insurance policies to gain access to of patients to seek second opinions abroad. largely due to higher reimbursement rates and more comprehensive coverage. Furthermore, continued growth in private strict regulations imposed for non-life insurance 01 sector will likely expand employee-benefit companies operating in the market; insurance packages as a share of total private insurance. high insurance premiums compared to public 02 Compared to peer market countries, insurance options; and penetration rates (calculated by total premium over total low brand awareness of private insurance 03 GDP) for Vietnam remains on the low range, accounting packages. for only 2.4% of total GDP in 2018. This indicates 6 room for further growth . According to the Insurance 7. Fitch Solutions 5. News articles Association of Vietnam, the insurance penetration rate 8. KPMG Analysis, PR Newswire 6. Fitch Solutions is expected to reach 3-4% in the near term. 9. KPMG Analysis, PR Newswire

12 Market Intelligence Report Market Intelligence Report 13 Implications to digital health Smart phones

Indicator Issue Implication Smart phone sales volume (million) Smart phone sales value (USD billion) Healthcare access The relatively low ranking of healthcare Increasing demand for ageing infrastructure and and quality access and quality index reflects some resource shortages are driving hospital CAGR (14-19) 31.6% CAGR (19-24) 2.4% CAGR (14-19) 15.5% CAGR (19-24) 5.5% current challenging issues for Vietnam’s executives and government officials to leverage healthcare system. More specifically, digital to optimise the patient experience and 32.4 4.9 29.6 overcrowded hospitals need the most create a health system without walls. 27.0 28.6 3.8 4.0 3.8 infrastructure investment. Digital health technology and the medical 21.7 3.4 2.7 tourism industry are converging to enhance 15.1 patient experience and trust in the process. This 1.8 Patient journey Even though Vietnam’s total number of effort will shrink the perceived quality of care 7.2 hospital beds and ratio of doctors per capita difference between Vietnam and other markets, have reached national objective levels, which will help to stem the USD2bn in outbound hospital capacity is still overcrowded. This 2014 2015 2016 2017 2018 2019 2024 2014 2015 2016 2017 2018 2019 2024 medical tourism and strengthen Vietnam’s brand indicates that availability of professionals and as a medical tourism destination. facilities still does not meet the country’s Key observations needs. Digital tools are increasing patient engagement through direct patient-provider communication, Overall, the market of smart phones has experienced rapid growth over the past five years (nearly 32% per annum), Medical tourism Vietnam possesses many of the necessary instant messaging apps, telemedicine, and and is on track to reaching a saturated status in the next five years. While growth is expected to slow down, the qualities needed to develop inbound medical encrypted electronic records. AI-enabled demand for new products will continue to drive the market. tourism, such as highly skilled professionals, technologies are just a few examples of digital yet the industry remains in its early days. integration in the medical tourism supply chain. Vietnam has rapidly developed its private Telemedicine over online video calls in pre- hospital networks, some of which achieved treatment diagnosis and assessment and post- international standards such as Joint treatment can be beneficial in that it lessens Mobile-cellular telephone subscriptions Commission International (JCI) accreditation. the strain on physical medical infrastructure and Nevertheless, building trust with patients will empowers patients to have consultations on a Mobile-cellular subscriptions (million) and 4G subscriptions (million) take more time. schedule and location of their choosing. The adoption of digital health will help Bringing patient consultations into a digital CAGR (14-19) -1.0% CAGR (19-24) 2.3% CAGR (14-19) 667.0% CAGR (19-24) 11.9% accelerate the development of patient trust setting can improve clinical outcomes and by increasing transparency and converging lower costs for Vietnamese patients. Clinicians CAGR (14-19) -9.5% CAGR (19-24) -22.5% domestic care standards with the best will have access to powerful new tools to international practices. longitudinally track health outcomes and make more personalised recommendations. 79.2

141.5 28.7 132.5 130.4 128.8 126.2 123.9 120.0 0.1 4.9

2014 2015 2016 2017 2018 2019 2024 2014 2016 2018 2020 2022 2024 Telecom Infrastructure: Connectivity 3G 4G Key observations Telecom infrastructure Along with the rise of smart phones, the number of mobile-cellular subscriptions is expected to increase steadily in Mobile development the next five years. This is driven by the surge of 4G since 2016 and 5G (estimated to launch in 2020), both of which Device and service affordability will replace the older 2G and 3G. 72.11 Maximum score: 100 Source: Ministry of Information and Communications, Fitch Solutions

Mobile network infrastructure Consumer readiness index 49.15 74.10 Maximum score: 100 Maximum score: 100

Mobile connectivity

Mobile connectivity index Content and service availability 63.03 60.11 Maximum score: 100 Maximum score: 100

14 Market Intelligence Report Market Intelligence Report 15 and broadband infrastructure Internet usage trends in Vietnam

Internet development Overview of internet usage and mobileInternet penetration Internet users (% of population) Internet bandwidth (Mbps) rate

CAGR (14-19) 71.2% CAGR (14-19) 41.4% Internet penetration rate 66% 78% 13,632.8 Daily use of internet 67% 66% (% population) 53% 58% 66% 41% 45% 4,083.6 Daily use of internet 927.7 (% population) 722.2 94% Average time spent on daily internet use 2014 2015 2016 2017 2018 2019 2024 2014 2015 2016 2017 2018 2019 94% Domestic International Average time spent Key observations on daily internet use 6H 42Min The internet has become an integral part of ’s life, reflected upon its increase in the internet penetration penetration rate (66% of the total population as of 2019). Combined with the expansion of internet bandwidth (both 6H 42Min domestically and internationally), this lays the groundwork for digital development across all sectors in the country’s socio-economy. Social media penetration 64% Average time spent on Broadband subscriptions 64% daily social media use Broadband subscriptions (million) Fixed broadband breakdown (%) Average time spent on 1% daily social media use CAGR (14-19) 19.8% CAGR (14-19) 16.1% 7% 2% 19% 2H 32Min 61.0 44% 52.8 2H 32Min 44.9 78% 36.2 83% 92% 93% Source: We Are Social, Hoosuite 31.8 71% 29.0 47% 13.0 14.8 9.3 11.3 6.0 7.7 13% 8% 9% 10% 9% 6% 6% Implications to digital health 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019

Fixed broadband Mobile broadband xDSL FTTx Others Indicator Issue Implication Internet usage Daily usage of has The widespread popularity of internet and Key observations become increasingly prevalent. On average, social media, combined with the relatively an individual spends nearly 7 hours on the young population, will foster a rapid adoption Broadband infrastructure in Vietnam has seen rapid changes since 2014, with a significant increase in both fixed internet every day, nearly half of which are of new communication technologies. In the and mobile broadband. In terms of fixed broadband, the more modern FTTx has started to take over the traditionally on social media. context of digital health, this will open up more dominant role of xDSL technology since 2015. This will further enhance the adoption of digitalisation in Vietnam in opportunities for telehealth, consumer health forthcoming years. electronics, as well as healthcare Big Data and AI applications in Vietnam. Source: Ministry of Information and Communications, Fitch Solutions

Implications to digital health

Indicator Issue Implication Telecom Telecommunication infrastructure has grown The continuous improvement of Vietnam’s infrastructure significantly over the past five years across telecommunication infrastructure enables the both internet and mobile sectors. country to become better positioned to adopt digital health solutions. Telehealth, consumer health electronics, and electronic health records will have a solid foundation to continue to grow in the future.

16 Market Intelligence Report Market Intelligence Report 17 Digital health ecosystem

Key drivers impacting the digital health market in Vietnam:

Industry

Overview of digital health market in Vietnam • Overloading and understaffing issues at existing healthcare public Vietnam is now laying the foundation for a smart medical records for patients and disease tracking. facilities healthcare industry that includes disease prevention, Since June 2018, Vietnam has set a clear target • Pressures from hospital medical examinations and treatment, and health that, by 2025, 95% of Vietnamese population will financial autonomy policies management. Under Decision 4888 issued on have Electronic Medical Records. Meanwhile, 18 October 2019, the MOH set out a roadmap to telemedicine solutions remain under a “pilot • Increasing competition digitise patient records at hospitals and establish phase”, and the application of AI and Big Data in the Government amongst public and private Patient smart hospitals. This is the beginning of an ambitious healthcare sector remains limited. medical service providers in • Government’s initiatives • Rising demand for affordable multidisciplinary journey that will benefit from access terms of cost and efficiency to promote national digital access to healthcare services to the global industry’s best practices. both locally and regionally transformation program is driven by an ageing, Vietnam’s digital health market can be divided into • Decision No. 749/QD-TTg: growing population, with rising four main areas: Health Information Technology, Healthcare is amongst healthcare awareness and Telemedicine, Consumer Health Electronics, and prioritised sectors for digital greater prevalence of chronic Healthcare Big Data & AI-based products and transformation. diseases. services. Currently, these areas are in the early • Government’s master plan for • Increasing demand for premium stages of development. Specifically, most of the EHRs promotion (Decision No. and high quality healthcare healthcare facilities in Vietnam still use paper-based 5349/QD-BYT) and digitising services patients’ records at hospitals Vietnam’s • Untapped customer pools in tier and setting up smart hospitals digital health II, and III cities (Decision 4888) market

18 Market Intelligence Report Market Intelligence Report 19 Local digital health ecosystems Key players:

Top 5 Central Hospitals: POLICY MAKERS The Ministry of Health has set out targets to digitise the Hospital name Type of hospital Number of beds Ministry of Health healthcare sector from 2019-2025, including gradually build a smart health-care and prevention system, using Bach Mai Hospital General 1,900 beds electronic medical records and electronic payments, and Electronic Health strengthening the application of information technology in Cho Ray Hospital General 1,800 beds Administration health management K Hospital Oncology 1,800 beds Huu Nghi Viet Duc Hospital General 1,200 beds HEALTHCARE SOLUTION PROVIDERS FUNDERS/ SPONSORS Representative Representative University Medical Center Ho General 1,000 beds A PAT IEN T -CENTRIC, local companies foreign companies Vietnam Social Bao Viet Bao Minh Minh City INNOVATIVE DIGITAL Security Insurance Insurance FPT IBM Doctor Buymed* Information Corporation Anyw here* HEALTHCARE ECOSYSTEM System Top 3 conglomerates in Digital Health: VSS is also planning to replace paper insurance cards with digital ones to reduce Digital heath conglomerate Digital health services Key partners Both local and foreign companies have errors in processing information and reduce responded to rising demand for digital health by time for administrative procedures FPT Health information tech and AI & 200 hospitals including Bach Mai offering solutions such as teleconsultation Meanwhile, private insurers are partnering with application, clinical decision-support systems, digital solution providers to encourage Big Data hospital and Cho Ray hospital online appointment-booking systems etc. adoption of digital health services in Vietnam VNPT AI & Big Data and Telemedicine 168 hospitals including Bach Mai Note: *Start-ups hospital and Huu Nghi Viet Duc hospital HEALTHCARE PROVIDERS

Bach Mai Telemedicine 200 hospitals including K hospital Hospital and Bach Mai hospital Central-tier hospitals have made great progress in integrating digital solutions into their daily procedures, Huu Nghi Viet such as giving teleconsultations for satellite hospitals to Duc Hospital save time and cost, or applied online booking systems to Top 5 Start-ups: prevent overcrowding Gia Dinh Hospital Start-up Digital health service Key partners Doctor Anywhere Telehealth/ telemedicine Saigon Eye Hospital, DoLife Source: Tradepress, Ministry of Health, Hospital websites Hospital, Thu Cuc Hospital JioHealth Telehealth/ telemedicine Bao Viet Insurance Besides the government and associated also partnered with Bao Minh Insurance and Bao Viet Mydoc Telehealth/ telemedicine Bao Viet Insurance organisations, private entities in various sectors Insurance respectively to further encourage digital like telecommunications, IT, and insurance are also adoption in Vietnam. Notable local start-ups include: VieVie Healthcare Telehealth/ telemedicine Medicare, Hoan My Hospital participating in the digital health space. This creates a VieVie Healthcare, an online platform that enables BuyMed Telehealth/ telemedicine 7,000 pharmacies and clinics cooperative ecosystem between the government and patients to book appointments and post their concerns private players that will drive innovation and develop or questions in-app, which will be answered by the sector. qualified doctors; and BuyMed, which offers a secure wholesale channel for pharmacies in Vietnam. Even though digital health remains in its early stages in Vietnam, it has attracted the participation of both Digital health solutions have also been well-received local and foreign start-ups, and conglomerates. Notable by hospitals through improved operations management local conglomerates include FPT, VNPT, and Viettel, and data storage. Healthcare digitalisation continues which are leading telecommunications firms in the to facilitate the enhancement of operational efficiency country. These firms offer end-to-end solutions in and medical outcomes in public hospitals. Notably, Vietnam, aiming to support hospitals in managing more than 92% of public hospitals have outsourced to daily operations with real-time data, digital signature local IT companies such as FPT, Link Toan Cau, Dang integration, and digital medical records solutions. Quang and OneNet to develop digital solutions for their Foreign players are also present in the sector. For facilities. instance, Microsoft and its cloud services are used by hospitals and modern pharmacy chains, and IBM’s Compared to public hospitals, private facilities in Watson is used for Oncology by some domestic Vietnam have relatively more advanced health institutions. management systems. Large hospital chains such as Hoan My, and Vinmec Hospital have upgraded Start-ups in Vietnam are operating at a smaller their digital infrastructure to manage their branches. scale. Doctor Anywhere, JioHealth, and Mydoc are Furthermore, in order to provide the best services, international start-ups that offer digital consultations many foreign-invested hospitals are focusing on and scheduling systems for in-clinic appointments or investing in digital platforms. at-home visits. Doctor Anywhere and Mydoc have

20 Market Intelligence Report Market Intelligence Report 21 Key areas in

digital health Case study analysis FPT.eHospital. The solution consists of 22 functional modules and is divided into five main groups:

01 management of medical examination and treatment; Health information technology 02 administration and office management;

Key development milestones Opportunities 03 laboratory management;

Vietnam’s health information The Vietnamese government has acted swiftly to embrace Industry 04 image transfer, processing, and storage; system is making initial 4.0, extending this to the digitisation of healthcare. The MOH has progress: Most medical encouraged hospitals to apply technology to their operation in order 05 and secure data storage. institutes in Vietnam still use to enhance efficiency. As former of Health Nguyen Thi Kim The medical management solutions have helped reduce paper-based medical records Tien states: information errors, while integrating patient information into a for patients and diseases. Since system that is readily accessible to medical professionals. The June 2018, Vietnam has set administrative management solutions in FPT.eHospital have also the goal to promote Electronic Together with the achievements made over recent years, begun transforming old hospital management systems. As an Health Records (EHRs). Under Vietnam continues the reform of the healthcare system. example, instead of using separate applications, hospitals can the governmental plan for the We want to learn from countries in the development of the now utilise vertical management applications integrated in to deployment of EHRs (Decision healthcare sector and encourage private investment into FPT.eHospital, which manages the administration processes No. 5349/QD-BYT), at least this path, from front-office patient care to back-office 80% of people in provinces and resource management. central-affiliated cities will have EHRs in the near-term, reaching Additionally, as Vietnamese hospitals transfer to a more digital a target of 95% of population system, there is an opportunity for UK digital service providers to help nationwide by 2025. Currently, manage the complexity of data that this transformation creates. there are 24 provinces Challenges implementing EHRs in Vietnam, six of which officially Several challenges slow the process of hospitals advancing health considered the “piloting EHR information technology and digitisation, namely: provinces”. Emerging EHR providers like FPT.eHospitals Financial pressures: Hospital management software are quickly gaining traction in and the broader information technology infrastructure is Vietnam. However, Vietnam expensive. data localisation requirements may create challenges for providers that operate on a Lack of investment in human resource training: all global cloud. healthcare professionals will need to be trained in the use of digital systems. This may be a significant hurdle in rural or remote regions of the country.

Concerns over data privacy and cyber security laws to protect patient data.

22 Market Intelligence Report Market Intelligence Report 23 Telehealth / Telemedicine

Key development milestones Opportunities Case study analysis

The plan to expand the use of telemedicine is expected to pave the way Telemedicine solutions Doctor Anywhere (DA) are under “pilot phase”: for further hospital adoption. The government is encouraging investors Adoption of telemedicine in to participate in the development of digital health in Vietnam, including Doctor Anywhere is a Singapore-based start-up Currently, BuyMed has an extended network of 700 urban and rural areas is still telehealth. that has operated in Vietnam since the end of verified suppliers, distributors, and manufacturers, on a small scale. During the 2019. The company serves more than one million serving over 7,000 healthcare providers. Thuocsi.vn Although the capacity of telehealth service is currently limited to basic COVID-19 , Vietnam’s users in Vietnam, Singapore, and Thailand. It offers and BuyMed have both seen significant growth as a consultations in Vietnam, it is still expected to improve health conditions Ministry of Health piloted teleconsultation services in internal medicine and result of COVID-19. in underserved geographical areas. Going forward, opportunities for telemedicine to encourage paediatrics through a smartphone application. The telemedicine applications in Vietnam exist across numerous areas including social distancing and reduce patient’s records, prescriptions, and related papers Jio Health remote patient diagnosis and prescriptions, remote patient monitoring and nosocomial infections. will be emailed to the patient after the consultation consultation, and even surgical care and telecardiology. Specifically, on 24 April, session. In addition, the prescribed medicine can Jio Health is a telemedicine app that enables on- the Ministry of Information also be delivered to the patient upon request through demand access to healthcare services such as and Communications, the “Telemedicine consultation is accompanied by simple medical partnered pharmacies. The company is currently primary care and chronic disease management. By Ministry of Health, and the devices such as thermometers, blood pressure meters, heart rate delivering 350 tele-consultation sessions per day providing a comprehensive ecosystem through its signed a meters, diabetes meters, and COVID-19 tests will be developed in Vietnam due to COVID-19, a 600% increase mobile application, customers can talk to doctors Memorandum of Cooperation soon. With technology advancements, these medical devices comparing to 60 sessions per day before the and nurses 24/7, and schedule appointments with to provide a free support will become cheaper and will facilitate healthcare development pandemic. With Doctors Anywhere, patients are preferred doctors as well as monitor and download package for online telemedicine at home,” said the Minister of Information and Communications, able to receive consultations from doctors currently their own medical records such as clinical notes, test during the COVID-19 pandemic. Nguyen Manh Hung. working in leading hospitals in the country, such as results, and prescriptions. In addition to this, the app For access, people can Bach Mai Hospital and Cho Ray Hospital. can manage the records of direct family members, download the VOV Bacsi24 “Vietnam has advantages such as powerful telecoms and IT stored safely in cloud. Users can access their health app from or Apple groups, nationwide infrastructure, and resources which can develop Doctor Anywhere has developed partnerships with records electronically at any place and time through Stores, create an account, infrastructure to speed up digital transformation in important nearly 100 hospitals and clinics, 50 pharmacies, and Jio Health’s mobile application and possibly purchase and follow instructions. In sectors like education and healthcare,” Hung elaborated. 100 doctors from leading hospitals to meet the rising prescriptions on the application as well. Payment “The country needs more platforms, and so, we call on the addition, the government has demand of its users. methods are also simplified and safe on JioHealth’s implemented a pilot program business community to join the development.” application, ranging from to electronic wallets. with Medical University BuyMed

Hospital linking it with several Challenges Since its launch in 2014, an estimated 200,000 people satellite hospitals, including BuyMed is a medical start-up in Vietnam that seeks to have registered on the application. tackle counterfeit drug issues. The company operates Muong Khuong General Lack of clear regulation framework for telemedicine Hospital (Lao Cai province), Ha Thuocsi.vn, a pharmaceutical distribution , Tinh City General Hospital (Ha and aims to simplify pharmaceutical distribution MOH issued Circular 47 in 2017 regulating telemedicine in Vietnam. Tinh province), commune health system in Vietnam and the rest of . This circular, in effect since February 2018, allows doctors to offer stations, and patient homes. The platform works by verifying suppliers and telemedicine services to patients, subject to certain requirements including This program is expected to reducing the risk of medications making entering IT infrastructure and licenses. Circular 47 also provides guidelines for a serve as a steppingstone to the the grey market. Since initial feedback on Thuocsi. range of telemedicine activities such as telemedicine consultation, tele- wider adoption of telemedicine vn have been positive, BuyMed plans to add new radiology consultation, remote consultation, remote surgery consultation, in Vietnam. product lines including medical devices, supplements and telemedicine technology transfer training. This is the only regulation and medical services to become ‘one-stop shop for all governing telemedicine activities so far. In addition, there is also no users’ healthcare needs. regulation on reimbursement schemes from Vietnam’s Social Security, or private insurance providers for telemedicine. Telemedicine is a new , and As there are no major multi-brand distributors in as such, the regulatory framework is catching up with business needs. Vietnam, most pharmaceutical manufacturers and brands end up building their own networks, fragmenting the process of providing prescriptions Underdeveloped infrastructure, especially in rural areas and pharmaceutical supplies to healthcare providers. This results in distributors serving over 40,000 The limitation in synchronising digital technology of many hospitals, independent pharmacies and an estimated 5,000 especially tier II and III hospitals is amongst the key challenges for clinics. implementation of telemedicine in Vietnam. Many older patients and people living in remote areas have limited access to technology, thus require certain level of additional infrastructure before they can leverage digital health.

Challenges for changing behaviours of medical professionals and patients

“It is not the technology but the required changes in habits of people and medical professionals that will challenge the shift from traditional consultation and treatment to online services”, said Mr. Nguyen Manh Ho, CEO of Viettel Solutions.

24 Market Intelligence Report Market Intelligence Report 25 Consumer health electronics

Key development milestones Opportunities Case study analysis

Wearables have potential to revolutionise how people monitor and As Vietnam develops, people, As technology becomes more integrated into daily life, the adoption rate of wearables such as remote maintain their health, and act on personalised health data. Checking especially the country’s urban patient monitoring devices and smartwatches with Vietnamese consumers will increase. These tools, one’s vitals on a regular basis for many in Vietnam requires a visit to youth, are integrating health among others are now utilised by clinicians as part of standard treatment regimens. This care standard a local hospital or clinic, which contributes to crowding and additional technology into their lives, is coming to Vietnam and will help alleviate crowding and resource constraints and improve overall stress on already strained healthcare practitioners, especially in driving wearable fitness and treatment quality through more accurate and timely data. activity tracking technology. remote or rural areas. Remote patient monitoring solutions from 2.3 million people in Vietnam providers such as Phillips Health and Omron HeartGuide are Other markets in Southeast Asia are also quickly adopting wearables and remote patient monitoring now own some forms of allowing people to communicate with their doctors and track critical technology to improve clinical efficiency, lower costs, and drive better health outcomes. As an example, wearable tech, including Fitbits, information from the comfort and convenience of their homes. This Singapore’s IoT (Internet of Things) solutions company KaHa recently partnered with medical solutions will free-up bed space, lower the cost of care, and allow for earlier Apple Watches, or provider EasyCare and iDOC Clinic to launch remote patient monitoring for primary care patients. The discharge of low-risk patients. Watches. partnership will leverage wearables and near-patient devices to track health statistics such as sleep quality, blood pressure, heart rate, and activity level, and provide feedback and activity modification These devices, however, Challenges suggestions to users through a dashboard. As well, data collected through the devises will be available have greater potential utility to the patient’s attending physician, which will assist with ongoing monitoring, and help improve the than just fashion or fitness However, wearable teach in Vietnam is not as common as it is accuracy of future diagnoses. accessories. According to a in other markets. According to the Rakuten Insight survey, 57% survey conducted by Rakuten of respondents claimed that their smartphone was sufficient in Insight, the health monitoring monitoring their health and they did not see a reason to add a paired is the primary reason why wearable. This may limit the types of data that can gathered and Vietnamese consumers analysed. purchase wearable tech. As such, many corporations It should also be noted that wearables can be expensive, ranging like Apple & Phillips have from USD $30 to more than $300, while the average monthly salary announced plans to focusing of a worker in Vietnam is approximately $265. This is particularly on medical wearable tech that true for rural workers, who generally earn less but have much to gain focus on heart rate, and sleep from better access to health monitoring. quality.

26 Market Intelligence Report Market Intelligence Report 27 AI and Big Data in digital health

Key development milestones Opportunities Case study analysis

Vietnam is in the nascent AI can be used in various ways to improve healthcare services including, FPT.eHospital 2.0 IBM Watson for Oncology stages of its use of Artificial day-to-day tracking, early detection of diseases, diagnoses, and treatment Intelligence (AI) and Big Data in planning. As AI and Big Data services are still underdeveloped in Vietnam, Following its 2018 product update, FPT.eHospital Vietnam’s Ministry of Health has approved the use of healthcare: only a few hospitals there might be potential for UK providers of innovative solutions in almost 2.0 includes patient care technology such as artificial IBM’s Watson, an Artificial Intelligence (AI) system that out of nearly 1,400 hospitals every application of AI. intelligence (AI), Big Data analytics, cloud computing, offers cancer treatment options based on details in a currently have any form of and remote patient monitoring and mobile device patient’s medical records, for oncology diagnosis and AI and Big Data applications are receiving strong support from the central AI. Some notable hospitals integration. By assisting hospitals to manage their treatment. government. It is hoped that these applications will drive the development pioneering AI applications in operations with real-time data, Electronic Medical of digital healthcare infrastructure and enable new R&D and enhance diagnosis and treatment, are Records (EMR), and digital signature integration, FPT. There are currently three hospitals in Vietnam that use healthcare delivery capabilities. However, further deregulation and the People’s 115 Hospital and IBM Watson to assist treatment of 13 types of cancer, clarification of investment incentives will help to motivate investors to bring eHospital 2.0 aims to create paperless hospitals, and Gia An 115 Hospital. Both namely: HCMC Oncology Hospital, Phu Tho General much needed capital, technology, and know-how to Vietnam. drive efficient and accurate medical examinations of which have adopted the and treatment processes. The company hopes its Hospital, and National Cancer Hospital (K Hospital). Stanford University “RAPID” platform will improve hospital capacity and lower the Vietnam’s Ministry of Health noted that in its medical system to diagnose and treat incremental cost of care through business process evaluation, the IBM Watson for Oncology software did strokes. In cancer diagnosis and Challenges automation. improve performance in cancer treatment, encouraging treatment, three Vietnamese many other hospitals to adopt the technology. hospitals are leading the way Potential barriers to wider coverage of AI & Big Data Doctors benefit from FPT.eHospital 2.0 as they can in terms of digitisation, namely applications include: monitor patients’ health remotely, reducing risks Pulse by Prudential the National Cancer Hospital, and errors by automatically checking for prescription In early May 2020, Prudential Vietnam launched Pulse, Phu Tho General Hospital, and Accuracy of patient data interpretation/ duplications and warnings. In addition, virtual an AI-powered health management app, and already HCMC Oncology Hospital. standardised data assistants like smart chatbots can assist doctors/ These three hospitals were nurses in completing daily tasks such as checking on has more than two million downloads. This app was selected to participate in the patients and referencing health profiles. developed through Prudential’s partnership with UK- “IBM Watson for Oncology” AI Availability of qualified health care professionals based health technology and services company Babylon: application pilot. that can use AI products In real-world application, FPT.eHospital 2.0’s shortens Babylon’s existing AI technology is made available patients’ registration times. In published use cases, for current Prudential Asia customers. The app uses Currently, there is no legislation the average time for medical visit registration has AI-powered self-help tools and real-time information to specifically governing Big Data Quality and accuracy of current diagnoses that been reduced from 4 minutes to 1 minute, while empower users to take control of their personal health and AI health applications, AI would be based on patients who already had a pre-arrival registration and wellness. In the app, users can check symptoms apart from those detailed in are processed in 15 seconds. Patients can make through the Babylon-powered Symptom Check function and consult with healthcare professionals without the 2019 adoption of Decision Might not be cost-effective especially in smaller appointments on the hospital’s website, virtually view going to a medical facility. When users are ready to 4888, which is detailed in the regions their health profiles, pay hospital fees, find additional regulations section of this information smart chatbots, and use calendar visit a healthcare facility, the application can provide report. reminders for future appointments. information and make an appointment.

In Bach Mai Hospital of Hanoi, the use of FPT. The app launched in Malaysia in 2019 and will be rolled eHospital 2.0 has allowed daily arrivals to reach out across 11 Asian markets. According to Prudential, an average of 9,000 of patients, an increase of the launch of Pulse is part of the company’s region-wide approximately 20% compared to the previous year. strategy to provide affordable and accessible healthcare to everyone by leveraging digital health and partnerships.

28 Market Intelligence Report Market Intelligence Report 29 Opportunities for UK companies

Thematic Area Opportunity Health Information The Vietnamese government is already implementing the digitisation of healthcare: Technology the MOH has encouraged hospitals to apply technology to their operation to increase efficiency. Vietnam has witnessed progress in implementing EHR systems. As of 2019, 14 public hospitals have systems in place, and the government aims to reach 95% by 2025. The adoption will drive data and image management opportunities for hospitals as they transition to digital. Telemedicine The government’s plan to expand the use of telemedicine is expected to pave the way for adoption. International investors are encouraged to participate. Currently, telehealth services are limited to basic consultations but can be expanded to numerous areas, including remote patient diagnosis and prescriptions, remote consultations, especially for satellite hospitals. Consumer Health Wearables can potentially revolutionise how people monitor and maintain their Electronics health, and act on personalised data. For many, checking vitals require a trip to a local hospital, leading to overcrowding. As such, through wearables’ remote tracking, it can help decrease overcrowding of hospitals as well as reduce the amount of time a patient spends in the hospital.

Healthcare Big Data AI and Big Data applications are receiving strong support from the central and AI government. It is hoped that these applications will drive the development of digital healthcare infrastructure and enable new R&D and enhanced healthcare delivery capabilities. However, the increase of Big Data and AI adoption in healthcare could be accelerated with investment incentives and further deregulation.

Digitisation of Vietnam’s health ecosystem is in its • Automated solutions that empower individuals early stage of development and has significant room to access quality care on their own terms, such to grow. There is a clear and growing need to improve as mobile health, online bookings and health patient access to care, lower costs by automating information platforms, and AI-enabled personal administrative procedures, and ensure quality of care health assistance will guide users through the across the health system. Digital innovations such patient journey and direct resources. These as blockchain, cloud-based computing, virtual health technologies can also integrate with Hospital assistants, artificial intelligence, process automation, Management Systems (HMS) to help alleviate and the Internet of Medical Things can empower overcrowding by guiding patients to facilities with Vietnam to achieve its goal of quality “health for all”, lower utilisation or local clinics rather than central while maintaining the government’s commitment to hospitals. sustainable health financing. The realisation of these goals will drive business opportunities, such as: • Clinical care applications include cutting-edge AI and cloud-based diagnostic and treatment tools. • Telemedicine has the potential to reduce Such applications will facilitate timely diagnoses overcrowding in most public hospitals and and treatment decisions in hospitals, improving provide healthcare access to an ageing, income- quality of care and patient outcomes. In rural areas, diverse, and geographically dispersed population. digital systems may enable doctors to make better Opportunities for UK organisations exist across informed triage and treatment decisions. This will the entire spectrum of telemedicine, including lessen the need for medical related travel, which remote patient diagnosis and prescriptions, remote will rationalise use of central hospitals to focus patient monitoring and consultation, telemedicine in care for the sickest or most complex patients and surgical care, and telecardiology. possibly slow the outbound medical tourism trend.

30 Market Intelligence Report Market Intelligence Report 31 (i) Government digital health development priorities

Improve legal framework relating Develop healthcare IT to healthcare IT infrastructure Digital health • Promulgate guiding legislation for • Centralise health data to the health identification code for Information Technology Department Vietnamese citizens, electronic for a national health database. medical records deployment, safety • Establish a specialised Big Data and privacy protection tools of center for AI’s development and health information on the internet application and assessing whether information technology service fees are to be • Construct a Vietnamese DNA database at either Ha Noi or part of medical service fees HCMC University of Medicine and Pharmacy via Big Data and regulation AI • Upgrade the IT systems of all health facilities from central to grassroot

Decision 4888/QD-BYT - National agenda for e-health adoption Establish smart healthcare and Develop smart medical disease prevention systems service systems • Create smart medical service • Complete software for hospital systems and smart healthcare management and digitalisation Digital health in Vietnam is Current government accomplishment milestones for digital health: administration systems using IT Government’s • Deploy e-medical records in all guided by several key policy applications. These systems can orientation for healthcare facilities according to connect and store medical the set roadmap and communications, namely: Increasing utilisation of IT application in the coming years activities and records • Build and develop information medical services • Implement AI for clinical decision- Circular No. 53, 2014: kiosks in hospitals 01 making support, medical imaging • Develop AI applications for Clarifies the provision of • Extend health information systems to “most” of the hospitals in support, and surgery support, etc. medical services online medical services; Vietnam.

Directive No.16, 2017: • Achieved broad adoption in larger cities including Hanoi, Danang, 02 Develop smart healthcare R&D promotion and Sets initial guidelines for and City for the use of electronic medical records and administration & workforce International cooperation digital health regulation; cloud computing. development • Encourage stakeholders to • Develop and improve the national conduct scientific research on • The MOH, in coordination with Vietnam Social Security (VSS), has health statistics database and the smart healthcare applications Circular No. 54, 03 linked 99.5% of the medical facilities in Vietnam under the medical management systems of medical • Encourage international dated 2017: Guides IT supervision system of VSS. information, equipment and health cooperation in smart healthcare applications in healthcare workforce research and development • Formulate incentive policies for IT officials facilities; and policies to attract high-quality IT Development of Telemedicine system and workers to the healthcare sector Circular No. 49, 2017: 04 Internet of Medical Things (IoMT) Describes permissible telemedicine services; • Vietnam’s telemedicine has developed to connect central hospitals with lower tier hospitals. The project prioritises the identification Decision No. 4888, 05 and tracking of patients through bar code, sensors, and RFID whilst (ii) Investment opportunities will emerge to accelerate and enable the government’s ambitious digital health vision. 2019: Defines Smart in hospitals and clinics. The government has indicated support for international corporations in digital health, particularly in areas concerning: Health Information Technology, and outlines development goals for a Utilisation of in healthcare healthcare industry 4.0. • Robots are now being utilised in the health industry, notably the Da Vinci for endoscopy, the Renaissance robot for spine surgery, the Makoplasty robot for knee and hip joint surgery, and the Disease tracking and Application-based Artificial Intelligence robot for neurosurgery. early warning health information in the diagnosis and treatment

AI deployment

• In 2018, AI was initially deployed as part of a cancer treatment “cognitive computing” pilot program at Phu Tho General Hospital and Quang Ninh General Hospital. Other AI initiatives including the Electronic Medical Genetic application of machine learning and cognitive computing and clinical Records research decision making, are under review and early stage development.

32 Market Intelligence Report Market Intelligence Report 33 Cybersecurity Law and Regulation Big Data / AI-based medical devices

Requirements for data protection in Vietnam are Following the introduction of Decision 4888 detailed in the Law on Network Information Security framework, there is currently no additional legislation (“LNIS”), which came into initial effect in July of 2016. governing the application of Big Data and AI in The governing scope of the law includes network healthcare. Given the stated importance of Big information security activities, the rights and duties Data and AI to the government in realising its digital of agencies, organisations, and individuals to secure transformation target, further implementation network information, protect civil , guidance is expected in the coming years. and achieve network technical information security standards. The law is applicable to Vietnamese agencies, domestic organisations and individuals, as Potential hurdles for UK well as foreign organisations and individuals directly companies: legal perspectives involved in or related to cyber-information security on procurement process activities in Vietnam. Overall, the LNIS and its guiding legal instruments are drafted in broad language and are still somewhat open to interpretation by the Despite persistent encouragement from the relevant enforcement authority. It is also worth noting government, healthcare Public Private Partnerships that data privacy rules are also governed by parallel (“PPP”) remains underdeveloped. Although health sectoral laws (including the Law on E-transactions, sector PPP was introduced more than 10 years ago Law on Protection of Consumers’ Rights and as a mechanism to distribute investment risk, raise Interests, Law on Competition, Law on Cybersecurity, funds for needed projects, and open market access to and applicable Penal Codes). the private sector, Vietnam has seen few large-scale successes. At time of writing, Vietnam has about Personal data is, broadly speaking, defined in Vietnam 73 registered PPP health projects. Of these, only 15 as any information that can identify an individual. This projects reached pre-feasibility study development includes information such as one’s name, date of birth, stage. Of these 15, six were implemented. This high address, telephone numbers, identification number, or project-attrition rate is likely due to the developing even email address. nature of governing legal frameworks.

It is important to note the LNIS also provides two Recent data localisation requirement may well primary exemptions from data protection rules: firstly, further slow Vietnam’s PPP development. Most the processing of personal data carried out by a international healthcare providers utilise some competent authority or on the decision of a competent forms of an encrypted cloud solution to link projects authority based on legal grounds, and secondly, the globally. Current ambiguities on compliance costs processing of personal data to ensure and requirements may slow interest from investors such as protecting national defence, maintaining public who may wait for further clarity. For foreign investors, order, or meeting non-commercial objectives. It is there is an opportunity to close skills and finance gaps important to seek legal clarification before undertaking within public hospitals. To date, there have been few any business activity in Vietnam that involves the successful cases of this type of partnership. collection or processing of information that could be considered personal data.

In addition to the LNIS-related rules outlined above, organisations participating in Vietnam’s digital healthcare sector also need to be aware of and comply with applicable data localisation rules as set out in the 2019 Law on Cybersecurity (“LCS”). This law states that any party collecting, exploiting (using), analysing, or processing personal data, or data generated by users in Vietnam, must store such data in Vietnam for a period stipulated by the government. It is still unclear if localisation will require all data to be stored exclusively within Vietnam, or a domestic backup of data in an approved facility will satisfy statutory storage requirements. It is expected that these matters will be clarified in future government-issued implementation guidelines. This ambiguity poses a compliance challenge for businesses and needs careful consideration before beginning a digital health business venture.

34 Market Intelligence Report Market Intelligence Report 35 Market access strategies for UK companies

Choosing the most appropriate legal structure for UK Direct Export Model: Business Cooperation Contract (“BCC”) companies to enter the Vietnam market is an important decision that will impact establishment procedures, Under this Direct Export Model, a UK company will A business cooperation contract (BCC) is between a UK taxation, legal restrictions, and the overall business oversee Sales and Marketing activities either from company and a local partner to distribute products. As capabilities. the UK or another regional management office. The mentioned above, this model saves time and resources UK Company fills purchase orders by contracting as there is no need to set up a legal entity in the country. In order to establish a foreign-invested presence in directly with a Vietnamese customer, who will then The appeal behind a BCC contract is that the overseas Vietnam, companies must first carefully consider be responsible for the importation and the customs company can leverage the local entity’s market insights, industry and scope of services for the Vietnam clearance process. Vietnamese customers will remit while the Vietnamese company can benefit from its business, as well as potential company size. These the sales proceeds to the UK company through normal partners knowledge, financial resources and technology. considerations will have an impact on business financial means (e.g., cash in advance, letter-of-credit, As well as that, investors can participate independently licensing process. documentary collections, and open account). However, to exercise rights and perform contractual obligations. some disadvantages of this includes a lack of local The target size and complexity of business operations language and time-zone differences, which poses This structure is not without its limitations. One of the in Vietnam will determine if a locally registered challenges when it comes to after-sales support. main disadvantages of a BCC stems from the lack of a company is needed. For many Small and Sized local legal entity to resolve business-related issues. This Enterprises (SMEs), registering a Vietnam company Key advantages of this model include direct access for challenge is sometimes compounded by the fact that may not be needed. Two popular alternatives that do UK companies without the need for intermediaries. many BCCs in Vietnam have unclear third-party contract not require a locally registered company include direct This provides direct and central control and oversight implementation duties. It is therefore critical for UK sales (i.e. “Direct Export Model”), and a Business of sales and distribution functions. However, given companies to consider all eventualities when contracting Cooperation Contract (“BCC”) model. the lack of local presence, the company may have through BCC in Vietnam. difficulties in capturing broader market opportunities, Top tips for UK companies: communicating with customers, and gaining needed Key considerations when choosing a potential local market insights. As well, corporate governance partner: 01 Understand the local market relative to your and procurement process requirements with some company, and how your business model fits; Established business footprint in Vietnam organisations may restrict this type of contractional 01 relationship. This should be explored and clarified before (North/South/Central); Understand the key regulations and restrictions, 02 a company begins its market entry process. how they impact your business, how you need Historical experience and capability in the specific 02 to adapt your operations to be compliant, the Key considerations: business areas (records of business cooperation required legal structure, and required level of with other partners if any); registered capital; 01 What is the unique selling point? How partner compares to other companies in 03 Identify local acquisition targets, and steps How to deliver on-site installation or after-sale this business area? (Key competitive advantages 03 02 necessary to confidently complete the services (under time zone differences and in local against its peer companies in the sector or transaction; language)? business area);

Identify a local partner that leverages local Who is responsible for logistics and how will it be How extensive is their network? (are they a part 04 03 04 presence, but does not expose you to done? of a bigger company? Relationship with relevant commercial/ operational risk; stakeholders in the sector?); Is the exporter willing to localise the product? 04 05 05 Identify how profits are repatriated to global (e.g. incorporating ) What other projects have they been involved in? operations, and how this impacts your tax liabilities.

36 Market Intelligence Report Market Intelligence Report 37 Other paths to market in Vietnam

Representative Limited-liability Offices (“RO”) company (“LLC”)

Representative Offices provide support to the parent A limited-liability company (LLC) is the most popular company or its regional office by functioning as a legal structure form in Vietnam. It is created by one liaison, conducting market research or promotional or more members who contribute charter capital activities or managing domestic projects on behalf to the company and are then liable for financial of the parent company. For many companies in obligations in proportion to their capital contribution. their first stages of entering Vietnam, establishing As a separate legal entity, an LLC can be either a representative office marks their presence in the completely foreign-owned (where investors are all country. It offers a low-cost entry for companies foreign) or a foreign-invested joint-venture (where seeking to gain a better understanding of the at least one investor is local). An LLC can be used Vietnamese market. These representative offices can as a subsidiary or holding company of a foreign do research about the markets, execute contracts company interested in establishing a presence in on the behalf of its parent company, and open bank Vietnam. The advantages of an LLC include the accounts for administrative operations. The main fact that a company’s liability is limited to capital disadvantage of having a representative office is contribution and that there are relatively fewer that due to their dependent nature to their parent restrictions on business scope activity. However, company, they cannot conduct any commercial the disadvantages are that the LLC legal registration activities or engage in any activities that generate option includes not being able to issue shares and revenue. This includes buying/selling commercial having a member limit of 50. As such, it is often goods, providing services that generate profit, and most suitable for smaller legal entities in Vietnam. signing commercial agreements without the parent company’s ad-hoc authorisation.

Public – Private Partnership Joint Stock (“PPP”) Contracts Company (“JSC”)

A Public-Private Partnership is a contract between a Like an LLC, a joint stock company (JSC) can private company and government authority. This is be wholly foreign-owned or a joint-venture. The often focused on investments in public infrastructure difference between a JSC and LLC is that the projects and services. This form of contract typically contributed charter capital will be converted to allows for faster project completions by including shares and divided proportionality to members. time-to-completion as a performance measure. PPPs Within a JSC, the corporate structure is made up are nevertheless prone to lower profit levels and of a Management Board which is supervised by oftentimes struggle to find alignment between the an Annual General Meeting and the Inspection public and private stakeholders. Committee, a Chairman of the Management Board, and a General Director. Within this corporate structure, shareholders, management board Branch members, and directors are all responsible for office acting in the best interest of the company and can be held accountable. JSCs have few restrictions Branch offices are typically implemented by on business scopes, can go public and issue companies conducting revenue-generating shares, and do not have a set maximum number of activities in Vietnam that have direct connections members. The JSC registration option is generally to another office or parent company. This office is most appropriate for companies that hope to grow legally allowed to operate as the parent company, to scale and have large and diversified shareholders. using its own company and having tax-paying This comes with obvious operational complexities responsibilities. Branch offices can carry out and compliance costs but is the most appropriate commercial activities within the parent company’s structure for a company that may eventually scope. However, this option is exclusive to a few go public. sectors in Vietnam such as legal services, IT services, consulting and management services, construction services, commercial franchising, and financial services.

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