With the increasing economic growth and demographic changes in Myanmar, expenditure in the healthcare landscape is set to rise exponentially by the growing awareness of regular check-up for early detection of non-communicable diseases. Myanmar’s total healthcare expenditure is set to cross USD 2 billion for FY 2015-2016.
The country is also witnessing rapid growth in healthcare demand which inevitably results in the development of the healthcare system. These shifts are creating emerging opportunities for private healthcare companies, especially in the Diagnostic Imaging (DI) and In-Vitro Diagnostics market since 2012.
However, evidence shows that demand is increasing faster than supply, urging global healthcare players to adapt to a fast evolving market and think of sustainable long-term strategies to capitalize on unique growth opportunities within the healthcare system. Solidiance, an Asia focused Management Consulting & Growth Advisory firm evaluates these opportunities in their whitepaper titled “Emerging opportunities in Myanmar’s Diagnostic Imaging and In Vitro Diagnostics”.
Overview of Myanmar’s Healthcare Sector
Following liberalization in the past decade, Myanmar’s government contributed 2.7% of its total budget towards the country’s healthcare sector– of which expenditure had tripled from 12% in 2010 to 40% four years later. In January 2015, the government proposed a plan in parliament to increase healthcare budget allocation with an annual growth rate of 6% until 2020 - primarily targeted to public hospitals in tier 2 & 3 cities. Public hospitals are subsidizing costs of diagnostics and providing medicine for the most needed people. However, out-of-pocket payment (OOP), which is mainly used for self-prescribed medicine, diagnostics and private clinics, remains the key dominant source for healthcare financing. In 2014, 78% of total healthcare expenditure was through OOP.
Around 86% of hospitals in Myanmar are public hospitals. Since late 2014, underprivileged patients get to purchase selected medicines and lab tests for free; however, the quality is still lagging behind the regional standards.
Although private hospitals tend to be lower in number compared to public hospitals, they have had a modest increase by 10% between 2011 and 2014. There are currently 167 private hospitals in Myanmar. But even so, the number of beds in most private hospitals cannot compare with public hospitals, in which the private hospitals contribute to only 7% of total beds in Myanmar. Half of the private hospitals in Yangon have less than 25 beds, meanwhile most of the private hospitals in Mandalay and Nay Pyi Taw have less than 25 beds.
Non-Communicable Diseases (NCD) are identified as the major cause of mortality in Myanmar which account for around 60% of total deaths in 2014. Majority of deaths by NCD are due to non-detection in early stages which is directly related to diagnostic imaging. As the number of deaths by NCD had increased by 7% from 2011 to 2014, it suggests the need of having better diagnostics services in Myanmar. Through upgrading and installing advanced medical devices, patients are now able to detect NCDs at an early stage to cut back on premature deaths. To address the issue, the government has developed a comprehensive national policy for prevention and control of major NCDs.
Trends in Myanmar's Diagnostics Imaging & In-Vitro Diagnostics
In public hospitals, basic diagnostic tests (x-ray and ultrasound) are free for inpatients. Outpatients are required to pay - but are considerably cheaper than in private facilities. Advanced DI equipment such as MRI and CT are only available in military hospitals, public tertiary hospitals and big private hospitals in main cities like Yangon, Mandalay, Nay Pyi Taw, and Taung Gyi.
The number of Diagnostic Imaging tests conducted in private facilities has substantially increased since 2012. Patients in Yangon prefer to take diagnostic imaging tests in private hospitals due to 24 hour service availability and better accuracy of results. Basic diagnostic imaging tests such as x-ray and ultrasound can be done in private diagnostic clinics.
Most public hospitals in Myanmar are equipped with 2D Ultrasound machines while 3D, 4D & Doppler machines are mostly found in private hospitals. 30 CT scanners were added to public hospitals in 2013 - mostly second-hand machines from Japan & Singapore. MRI scanners are only available at five public hospitals and seven private hospitals.
In-Vitro Diagnostics, on the other hand, are led by private facilities in Myanmar. Most private laboratories are standalone with 40% market shares in medical check-ups with their own laboratory testing services. There are only two standalone public laboratories, one each in Yangon & Mandalay. A few foreign hospitals have testing centers in Yangon, however, these are only for patients that are referred by the parent hospital in their originating country.
The majority of the tests are performed in the standalone local labs due to the affordability and the perceived accuracy of the test results. Doctors usually refer outpatients to have the specialty tests performed at standalone clinics.
Although most of the population prefer to have their basic IVD tests done in the country, the upper middle class (which represents ~10% of the population) get their IVD tests for specific diseases such as detailed tissue biopsy, tumor marker and C1 esterase inhibitor abroad, in Thailand and Singapore. Due to high outbound medical tourism to Thailand, two large Thai hospitals have setup testing centers in Yangon to cater to after-care needs for their patients.
"Biochemistry tests are the majority of IVD tests done in Myanmar with its basic screening packages such as liver, renal, cardiac, and diabetes profiling tests. Microbiology and Immunology are closely linked and often difficult to distinguish. These 2 combined are one-third of the total tests. Molecular diagnostic is a very small market and we need to increase its penetration," as stated by a Director in one of Myanmar's private laboratory facilities.
Emerging opportunities are present for private healthcare companies to enter the market due to shifts in Myanmar’s healthcare system. However, a long term strategic view of the market is still needed to benefit from these opportunities. Demographic shifts in Myanmar, fast income growth, and increased awareness for NCD prevention have significantly escalated demand for diagnostic devices, particularly in Diagnostic Imaging and In Vitro Diagnostics.
What remains a key challenge for healthcare players, as noted in the report, is pricing. To deal with the situation, global healthcare companies are encouraged to give assistance to local hospitals on devising a value proposition that would be appealing to the patients. Furthermore, with a change of government in 2016, healthcare spending in the country is expected to pick up more pace. Given that Myanmar patients spent ~USD 210 million in 2014 on outbound medical tourism, this large patient base can be used to tap into Myanmar to meet their diagnostics needs.
About the Author
Omar Aziz is an Associate Partner at Solidiance Singapore who is also the main author of Solidiance’s white paper “Emerging opportunities in Myanmar’s Diagnostic Imaging and In Vitro Diagnostics”. Solidiance is a corporate strategy consulting firm focused on Asia Pacific. The firm advises CEOs on deals, define new business models and accelerate Asia growth. Solidiance’s expertise is focused on industrial applications, green technology, healthcare and technology sectors with offices in 10 different Asian countries, including Myanmar.