July 10, 2012
By Le Mai Huong
The fast-growing country of 86 million is the 13th most populous in the world. Along with a growing number of wealthy and middle-class citizens, Vietnam is one of the fastest-growing markets in the global healthcare industry. The Economist Intelligence Unit recently predicted that total healthcare spending in Vietnam would rise from nearly US$7 billion in 2010 to $11.3 billion in 2015, an annual average growth rate of 10.3%.
However, the country’s healthcare system remains largely underdeveloped in terms of both the number and quality of hospitals, clinics and doctors. Vietnamese hospitals, with two or three patients per bed in some cases, are the area in most urgent need of upgrading.
The situation looks set to change now as a lot of foreign companies have arrived in Vietnam to explore opportunities in this untapped market.
Already there are a growing number of international hospitals and clinics in the major urban centres, with French and US companies the dominant foreign players in the market. More investors are expected to enter in the next coming years, including those from Germany, India, Singapore and Malaysia.
Last year, India’s Fortis Healthcare agreed to pay $64 million for a 65% stake in Hoan My Medical Corporation, one of Vietnam’s biggest private healthcare groups with six hospitals and many other clinics and facilities nationwide.
This year, executives of a number of hospitals and pharmaceutical companies from Germany and France have come to Vietnam. They are showing the most interest in high-end healthcare market, which mainly serves wealthy people and foreigners working in the country.
“We’re targeting the Hanoi and Ho Chi Minh City markets, where there’s a concentration of many high-income people,” said Michael Sprotte, director of Germany’s TSB Technology Systems Business.
A lot of Vietnamese people travel every year to the United States, Singapore, Thailand, South Korea and China for medical care. According to the Ministry of Health, up to 40,000 Vietnamese went abroad last years and spent $1 billion for medical services overseas.
While many diseases can be treated well in Vietnam, some wealthy Vietnamese prefer the luxurious and hotel-like private hospitals of Singapore and Bangkok, which have been drawing in affluent patients from around the developing world.
In January this year, VinMec, Vietnam’s largest private, hotel-like hospital, built by the leading property developer VinGroup, was inaugurated in Hanoi. It introduced a five-star hotel standard and incorporated 25 VIP rooms and two presidential suites.
VinGroup deputy chairman Le Khac Hiep said the group aimed to make VinMec the top-quality international hospital in Vietnam and Southeast Asia.
Besides helping reduce overloading at public hospitals, he expected high-quality healthcare service providers in Vietnam could help prevent the “foreign currency drain” that results when so many Vietnamese people go abroad for health treatment.
More upscale facilities are in the pipeline. Singapore-based Parkway Group is building an $80-million, 319-bed hospital in Ho Chi Minh City, expected to open in the first quarter of next year.
Other domestic companies will also invest $95 million to build an international-standard hospital with 500 beds in Hanoi, with Phase I to be completed by the end of next year.
Photo Credit: Bangkok Post