Vietnam’s healthcare market will grow at a substantial rate due to the liberalization policy adopted by the government and an increase in demand for healthcare services, according to a recent study released by the Indian-based Ken Research on October 23.

The study, “Vietnam Healthcare Market by Industry Type (Hospitals & Clinics, Diagnostic Labs, Pharmaceutical and Medical Devices) - Outlook to 2022”, looks at the market from different angles, such as the healthcare scenario in Vietnam, government and private spending on healthcare, cross-comparisons of Vietnam’s healthcare sector with other Asia-Pacific countries, mergers and acquisitions and other funding in healthcare, investment models for setting up a hospital, daycare centers and polyclinics, investment models for setting up a diagnostic laboratory, government regulations on launching new drugs, the role of IT companies in Vietnam, and a comparative analysis of major players in each section.

The report provides a detailed overview on the future outlook and projections with analyst recommendations for the industry. Vietnam’s healthcare market has been supported by an ever-increasing and aging population. The deregulation of the sector along with increases in average incomes in the middle-class will lead growth in the country’s healthcare market in the years to come.

The government has a target of more than 84 per cent of the population having health insurance by 2020. The government has invested heavily in the healthcare sector to make it accessible and affordable to all, but owing to its growing population the pressure on the public system is immense.

Addressing this issue of overcrowding at public healthcare establishments (hospitals, clinics and diagnostic laboratories), the government decided to deregulate the healthcare system in 2014. This structural change in the government’s policy opened the door to private national and international investment in the healthcare system. Owing to this change, the healthcare market in Vietnam is expected to witness substantial growth in the near future.

In recent years, the average household expenditure on healthcare in Vietnam has increased three-fold and is expected to further increase in the future. The majority of healthcare services are concentrated in urban areas and cities.

Patient concentration in cities has drastically increased in recent years, creating a need for new healthcare facilities in rural areas. The overall Healthcare Access and Quality (HAQ) Index in Vietnam has increased but there remains room for improvements to reach the best possible threshold, given the level of development in the country.

The demand for pharmaceuticals has also increased tremendously in recent years, owing to increases in average incomes of the middle-class. With deregulation, more national and international companies are expected to invest in the sector and more local pharmaceutical companies are expected to be established in the future.

The number of hospitals is anticipated to grow at a much faster pace along with the equitization of public hospitals. This will relieve pressure on public hospitals and raise the overall standard of healthcare in the country.

The diagnostic laboratories market is also likely to grow in the future, from increases in demand and in private investment. With the development of hospitals, clinics and diagnostic laboratories in the country, medical devices are also likely to be updated. The dependency on the importation of these devices is likely to continue into the future. However, the domestic production of consumable medical equipment is also expected to grow.