Future Healthcare Solutions in Emerging Markets: Vietnam

FUTURE HEALTHCARE SOLUTIONS IN EMERGING MARKETS:
VIETNAM
OVERVIEW
• Personalized Healthcare is an emerging trend in developed

countries
• Both government initiatives and consumer attitudes indicate that

there is a growing demand for Personalized Healthcare
• Finland has the opportunity to become a proactive provider of

general and specialized healthcare in Vietnam
• This report gives detailed information on consumer preferences,

demographics, opportunities and challenges for Finnish companies
in Vietnam
2 Team Finland Future Watch Report, September 2015

VIETNAM
• Vietnam is one of most the inhabited
nations in the world with a population of
90 million.
• Vietnam has a young population with

approximately 42% under 24 years old.
• The country has diverse cultures with 54

ethnic groups, but the Kinh ethnic is the
largest group, accounting for 86.2% of
Vietnam’s population.
• Traditional values, customs, rituals and

beliefs have been conserved through
thousands years of history, but rapid
adoption of Western practices and values
is taking place

VIETNAM HEALTHCARE SYSTEM
 General indicator:
 Area: 332,000 km2
 Population : 92 millions
 GDP per capita: 2000 USD
 Health Indicators:
 % Health budget in GDP: 3%
 % Health budget in total Government's
expenditure: 11%

 The Vietnamese healthcare system currently has an estimated more than 1000 state
hospitals, more than 100 local private hospitals and foreign invested hospitals with a total of
145,000 beds.
 Vietnam represents a potentially large healthcare, medical equipment and device market.
Identified as one of the national development priorities, the Vietnamese public healthcare
sector has received increasing government budget allocations as well as interest from the
private sector.
 Expand and build new hospitals in some overcrowding areas (oncology, cardiology, trauma,
obstetrics, pediatrics etc.)
 Develop satellite hospitals to transfer clinical techniques to lower levels
 Reform PHC health, strengthen grassroots health

DEVELOPMENT STATISTICS
The public health sector has limited abilities to cover all the needs of Vietnam’s growing population.
Acknowledging the shortage, Vietnam’s government is now aiming to grow the number and size of
private hospitals to account for an ambitious total of a 20% increase in total bed capacity by 2020.
Hospital beds (thousands) Hospital growth: Public vs Private

1400
250 1260
225 1200
195 1008 1043
200
176 1000
150 800
568
100 600
56 400
50 121 157
8,6 11,7 200
0 0
2010 2013 2020 2010 2013 2020
Public Private Public Private

DEVELOPMENT STATISTICS
CHANGES IN VIETNAM 2005 – 2014 (Millions)

140
128,6
120
100
90,9
82,4
80
60
39,8
40
20 12,9 15,8
Population Internet users Mobile subscription

2005 2014
 Hospitals in major cities like Ho Chi Minh and Hanoi often do not have the capacity
to serve both local patients and those from other provinces. Most of them were
constructed long ago and face chronic overcrowding.
 Much of the existing medical equipment in public hospitals in Vietnam is outdated

and needs replacement. Many hospitals lack sufficient equipment for surgery and
intensive care units.
 Vietnamese public hospitals rely largely on state budget to upgrade their facilities,
equipment and services. The total budget for the health sector has increased, but
it is still too low to meet the demands in the country.
 A shortage of qualified medical staff is common in many hospitals. Doctors and

nurses work under stressful conditions and wages are relatively low.

 Due to low quality service on the ground, around 30.000 Vietnamese people go
abroad for better check-ups and treatment, spending more than USD 1 billion
every year, an indication that domestic consumers are keen to seek out higher
quality services, out of pocket.
 Shortcomings in healthcare provision mean significant opportunities for investors

in Vietnam's healthcare sector.
 The profit rate of Vietnamese medical equipment products is between 35%-40%.

Such a high profit rate turns the medical instruments market into a big gold mine,
extremely alluring to foreign distributors. (Japan –Vietnam Company medical
report)

GOVERNMENT PLANS
• While healthcare has improved in urban areas, there is a need for healthcare
investment in rural areas
• Vietnam’s government also aims to enhance the healthcare workforce by 2020
• The government plans to strengthen regulatory practices, provide more

autonomy for public hospitals and incentives for the private sector.
• Key decisions have been made at the ministerial level to lay a foundation for the
interoperability of eventual healthcare IT applications.
• Many hospitals are basic in their integration with technology. This presents a
challenge for eHealth projects in Vietnam.

THE VIETNAMESE CONSUMER
• Vietnam has a diverse population with varying levels of purchasing power.
• Vietnam has a rapidly expanding middle class with a higher level of disposable
income, although extremely poor areas still exist
• As disposable income and purchasing power increase, the population are

developing an interest in new healthcare solutions
• Vietnam’s young population cares more about health issues. Early adopters of
health technology will find their way to influence and build up the bigger
wearable community.
• 42% of Vietnam’s population are aged under 24 years old, although in time this
trend may reverse and lead to an aging population

CONSUMER TRENDS – PART 1
• The Vietnamese population has a high rate of acceptance of mobile technology

with 22 million Vietnamese owning smart phones
• ICT growth is the highest in the region
• Increased health awareness has led to consumers spending more on

preventative healthcare.
• Vietnam’s young population cares more about health issues. Early adopters of
health technology will find their way to influence and build up the bigger
wearable community.
• Vietnam’s use of self-medication is increasing due to ease of access and online

information.

CONSUMER TRENDS – PART 2
• Vietnam has experienced a rise in non-communicable diseases (NCDs) .
• In urban areas, the elderly, supported by younger generations, are integrating

more and more frequently with healthcare technology.
• Many households own self-diagnostic healthcare equipment (e.g. blood

pressure monitors, blood glucose monitors).
• Use of self-medication among all age groups is increasing due to the availability
of information via the Internet and popular health forums.

CHALLENGES FACING HEALTHCARE DEVELOPMENT IN VIETNAM
• Hospitals below the provincial level (both private and public) have a very
limited integration with technology, although larger city hospitals use
common medical software applications.
• The introduction of Western medicines and healthcare technology is likely

to be difficult among ethnic minority groups where the level of education is
low.
• Terrain, accessibility, and infrastructure are also key considerations.
• Our focus groups indicate there is some concern over the feasibility of
institutions to provide personalized treatment and the accuracy of
Personalized Medicine procedures.

OPPORTUNITIES IN
HEALTHCARE IN VIETNAM

OPPORTUNITIES FOR HEALTHCARE DEVELOPMENT IN VIETNAM
• Middle and affluent

consumer classes of
Vietnam will double in size
between 2014 and 2020.
• Opportunities for
healthcare development
can be found in increasing
amounts outside the urban
development hubs of
Vietnam
• Vietnam is one of the fastest growing economies is Asia

• The shortage of the healthcare services in Vietnam has made the
government to decide to invest significantly to the healthcare facility
development
• The healthcare is going through fast development in both private and public
sectors
• The “real” purchasing power of the Vietnamese people is rapidly growing
and at the same time the interest to the personal health is also growing
• Vietnamese people are used to pay “out-of-the pocket” for the healthcare
services and are willing to spend reasonable share of the income for these
services
• The private healthcare will be growing fast in the coming years, as the
investment atmosphere for this sector in getting more and more interesting
for foreign investors
• Also the interest for the personal healthcare equipment and services is
growing, especially within younger generation

• In the survey - most respondents show willingness and a positive attitude to

wearable devices, diagnostic tests for Personalized Medicine, and the
potential benefits of Personalized Medicine.
• The majority of respondents answered positively when Personalized

Medicine was described to them.
• Vietnam has very high integration with the internet and smartphones.
• Younger individuals are the early-adopters who hold influence over the
older generation
• Respondents recognise the ability of PM and wearable devices to provide

useful information, improve quality of life, and provide more accurate
preventative and diagnostic healthcare solutions

mHEALTH ADOPTION AT A GLANCE
• Low adoption among ethnic minority people.
• High resistance to change among rural healthcare workers.
• High adoption rates among urban healthcare consumers.
• Urban healthcare workers are Interested in technology and willing to learn new
things.
• Favourable online source at www. ykhoa.net.
• Experienced gained from pilot projects by an international NGO to launch

mHealth in rural areas

PERSONALISED MEDICINE – KEY FINDINGS
• Our research shows that while the vast majority of Vietnamese people have not
heard of personalized medicine while the majority react positively to its
definition.
• Personalized Medicine has a high acceptance rate among cancer and diabetes
patients.
• The large majority of respondents would be willing to have diagnostic tests for
Personalized Medicine if recommended to by a doctor.
• However, among ethnic minority communities there is a very low rate of

understanding and acceptance of Personalized Medicine.

WEARABLE DEVICES – KEY FINDINGS
• There is a high acceptance of wearable devices to monitor health and chronic

diseases in Vietnam.
• Out of pocket expenses occupy a large proportion of healthcare expenditure

(49-60%), so the willingness to pay for wearable devices from consumers’ own
pockets is high.
• The older generation are not necessarily averse to this technology if it helps
with their health.
• Wearable devices are already sold in Vietnam. Early adopters come from a
range of age groups and backgrounds.

RECOMMENDATIONS AND
SUMMARY

SUMMARY
• While there are many challenges facing the development of Vietnam’s

healthcare system, there are numerous opportunities.
• The high level of inter-reliance and influence between family members

means that influencing early adopters in one generation encourages
adoption in the elder generations.
• The Vietnamese population are keen to embrace new technologies,

particularly in urban areas, and willing to pay out of their own pocket.
• The Vietnamese population, in general, recognize the value of Personalized

Healthcare and Wearable Devices.
• Hospital administrations recognize the value of healthcare applications and

wish to implement them, although this is a challenging task.

RECOMMENDATIONS
• Understand the complex and evolving nature of the Vietnamese regulatory framework
• Grey areas and other challenges can be navigated with the aid of a local partner.
• Do your research and planning carefully.
• Visit the market and build relationships with your clients to shorten the learning curve of
doing business in Vietnam.
• Always schedule for extra time in negotiations and consultations.
• Understand local business etiquette and its complexities. Especially the concept of saving
face.

OPPORTUNITIES FOR
FINNISH COMPANIES –
EXAMPLE CASES

Opportunities for Finnish Healthcare companies
Bach Mai Hospital Facility 2 Project (public) in Hanam province

(60 km from Hanoi).
 Investment capital: 205 million USD.
 5000 out patients and 1000 in - patients beds. Construction
started in January 2015. Full completion expected in 2017.

2. Viet Duc Hospital Facility 2 Project (public) in Ha nam province
 1000 beds Construction started in January 2015. Full
completion expected in 2017.
 Funding source: Government

3. Nhi Dong Pediatric Hospital Ho Chi Minh City
Investment capital: 200 millions USD from Government funding
sources.
Construction started in 12/2014. Completion expected in June
2016

4. Oncology Hospital Ho chi Minh city.
 1000 in- patient beds. Construction supposed to start in April
2015 (delay till date due to tender arrangement). Full
completion expected in 2017.
 Funding source: Government

KEY FINDINGS IN ON-LINE
SURVEY

HEALTHCARE EXECUTIVE ATTITUDES TO NEW TECHNOLOGIES
Healthcare executives ‘appreciation of key technologies in

enhancing competitive position 2015-2016
16,70%
16,70% 50%
16,70%
Big Data&Analytics Internet of Things Security/risk management/data governance Mobility
Source: IDC 2015

PERSONALISED MEDICINE – KEY FINDINGS
• Our research shows that while the vast majority of Vietnamese people have not heard of
personalized medicine while the majority react positively to its definition.
• Personalized Medicine has a high acceptance rate among cancer and diabetes patients.
• The large majority of respondents would be willing to have diagnostic tests for
Personalized Medicine if recommended to by a doctor.
• However, among ethnic minority communities there is a very low rate of understanding
and acceptance of Personalized Medicine.

WEARABLE DEVICES – KEY FINDINGS
• There is a high acceptance of wearable devices to monitor health and chronic diseases in
Vietnam.
• Out of pocket expenses occupy a large proportion of healthcare expenditure (49-60%),

so the willingness to pay for wearable devices from consumers’ own pockets is high.
• The older generation are not necessarily averse to this technology if it helps with their
health.
• Wearable devices are already sold in Vietnam. Early adopters come from a range of age
groups and backgrounds.

PERSONALISED MEDICINE – DATA
”HAVE YOU EVER HEARD OF THE TERM ’PERSONALISED MEDICINE’ BEFORE?”
18,50%
35 of 189 respondents (18.5%) have heard the
term before.
The ethnic minority groups questioned found it
difficult to understand, even after the definition
was explained, as technical terms like ‘genomes’
do not exist in their languages. 81,50%
YES NO

REACTIONS TO THE DEFINITION OF PERSONALISED MEDICINE
3,20%
Respondents’ reactions were mostly

positive. After reading the description 13,20%
of Personalized Medicine, 83.6% said
their reaction was positive, 3.2% said
negative and 13.2% did not know.
83,60%
I don’t know Good, positive Bad, negative

”ARE YOU INTERESTED IN LEARNING MORE ABOUT PERSONALISED MEDICINE?
7,90%
66.1% of respondents want to learn
more, 25.9% are less interested and
7.9% are not interested at all.
25,90%
66,10%
Not interested Somewhat interested Very interested

ATTITUDES TOWARDS BENEFITS OF PM – IMPROVED QUALITY OF LIFE
77.8% of respondents believe Personalized

Medicine offers an improvement in quality of
life.
10.1% think it’s a minor benefit and 0.5%
think it has no benefit. 10,10%
11,60%
Most of the focus group interviewed thinks
that by improving the quality of healthcare,
this already warrants an improvement in
quality of life. 7,78%
0,50%
Small benefit Big benefit No benefit I don’t know

ATTITUDES TOWARDS BENEFITS OF PM – ABILITY TO TAKE AN ACTIVE ROLE IN
PREVENTITIVE TREATMENT
0%
81.5% of respondents believe that 9,50%

personalized medicine has a major
benefit in preventing and treating illness 9%
while 9% think it has a minor benefit.
81,50%
I don’t know Small benefit Big benefit No benefit

ATTITUDES TOWARDS BENEFITS OF PM – IMPROVING THE ACCURACY OF
DIAGNOSES
0,00%
79.4 % believe that the improvement of
accuracy in medical diagnosis is a major
benefit of PM. 9,50% 11,10%
79%
I don’t know Big benefit Small benefit No benefit

ATTITUDES TOWARDS BENEFITS OF PM – PM SAVES COSTS IN THE LONG TERM
The majority of respondents believe this

is true and a major benefit while 10.6 % 18%
believe it’s true and has a minor benefit.
10,60%
71,40%
Big benefit Small benefit I don’t know No benefit

ATTITUDES TOWARDS BENEFITS OF PM – AVOIDING SIDE EFFECTS
74.1 % believe that there is a major 0,50% 14,80%

benefit of avoiding side effects in PM.
10,60%
74,10%
Big benefit Small benefit No benefit I don’t know

ATTITUDES TOWARDS BENEFITS OF PM – IMPROVING TREATMENT EFFICACY
0,00%
79.4% believes the improvement of
treatment efficacy is a major benefit of
PM. 6,90%
13,80%
79,40%
I don’t know Big benefit Small benefit No benefit

ATTITUDES TOWARDS BENEFITS OF PM – AVOIDING INVASIVE TREATMENT
63.8% believe the avoidance of invasive

treatment methods is a major benefit of
PM.
18,50%
0,50%
12,70%
68,30%
Big benefit Small benefit No benefit I don’t know

WOULD YOU FOLLOW YOUR DOCTOR’S ADVICE FOR PM?
4,20%
57.1% of respondent says they definitely

would follow their doctor’s advice. 38.6%
may follow their doctor’s advice and 4.2%
say they would not.
38,60%
57,10%
No Possibly Surely

DO YOU OWN A WEARABLE DEVICE?
19.6% of respondents say that they own a

wearable device.
19,60%
80,40%
Yes No

WHAT INFORMATION WOULD YOU EXPECT TO RECEIVE FROM A WEARABLE
DEVICE?
• 35.7% of respondents say they want to collect and track health information.
• 21.1% want to have ‘smarter exercise’.
• 22.8% want to eat more healthily.
• 8.4% want to plug into social media.
• 6.7% want to control home appliances.
• 5.2% want to get access to entertainment.

WHAT INFORMATION WOULD YOU SHARE WITH FAMILY AND FRIENDS?
• 30.5% of respondents want to share health information.
• 17.6% of respondents want to share the level of exercise.
• 13.8% don’t want to share any information.
• 10.3% want to share their mood.
• 9.2% want to share their weight.
• 8.4% want to share dietary intake.

WHAT DO CONSUMERS THINK IS A REASONABLE PRICE FOR A WEARABLE
DEVICE?
• USD 45 : 29.6%
• USD 90 : 23.3%
• USD 145 : 22.8%
• USD 220 : 17.5%
• USD 450 : 5.8%
• USD 900 : 1.1%

CONSTRAINTS ON THE PURCHASING DECISION
• 64% of respondents said quality would influence their purchasing decision.
• 42.3% said that usability and interface would influence their purchasing decision.
• 40% said that the price would influence their purchasing decision.
• 25% said their privacy would influence their purchasing decision.

IS A WEARABLE DEVICE IN ENGLISH A DISADVANTAGE?
• 41.3 % of respondents think that a wearable device indicator In English is a

disadvantage.
• 58.7% of respondents do not think that this is a disadvantage


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FUTURE HEALTHCARE SOLUTIONS IN EMERGING MARKETS:

• Personalized Healthcare is an emerging trend in developed

• Both government initiatives and consumer attitudes indicate that

• Finland has the opportunity to become a proactive provider of

• This report gives detailed information on consumer preferences,

2 Team Finland Future Watch Report, September 2015

• Vietnam has a young population with

• The country has diverse cultures with 54

• Traditional values, customs, rituals and

3 Team Finland Future Watch Report, September 2015

4 Team Finland Future Watch Report, September 2015

 Develop satellite hospitals to transfer clinical techniques to lower levels

 Reform PHC health, strengthen grassroots health

6 Team Finland Future Watch Report, September 2015

Hospital beds (thousands) Hospital growth: Public vs Private

7 Team Finland Future Watch Report, September 2015

CHANGES IN VIETNAM 2005 – 2014 (Millions)

Population Internet users Mobile subscription

 Much of the existing medical equipment in public hospitals in Vietnam is outdated

 A shortage of qualified medical staff is common in many hospitals. Doctors and

9 Team Finland Future Watch Report, September 2015

 Shortcomings in healthcare provision mean significant opportunities for investors

 The profit rate of Vietnamese medical equipment products is between 35%-40%.

10 Team Finland Future Watch Report, September 2015

• Vietnam’s government also aims to enhance the healthcare workforce by 2020

• The government plans to strengthen regulatory practices, provide more

11 Team Finland Future Watch Report, September 2015

• Vietnam has a diverse population with varying levels of purchasing power.

• As disposable income and purchasing power increase, the population are

12 Team Finland Future Watch Report, September 2015

• The Vietnamese population has a high rate of acceptance of mobile technology

• ICT growth is the highest in the region

• Increased health awareness has led to consumers spending more on

• Vietnam’s use of self-medication is increasing due to ease of access and online

13 Team Finland Future Watch Report, September 2015

• Vietnam has experienced a rise in non-communicable diseases (NCDs) .

• In urban areas, the elderly, supported by younger generations, are integrating

• Many households own self-diagnostic healthcare equipment (e.g. blood

14 Team Finland Future Watch Report, September 2015

• The introduction of Western medicines and healthcare technology is likely

• Terrain, accessibility, and infrastructure are also key considerations.

15 Team Finland Future Watch Report, September 2015

16 Team Finland Future Watch Report, September 2015

• Middle and affluent

• Vietnam is one of the fastest growing economies is Asia

18 Team Finland Future Watch Report, September 2015

• In the survey - most respondents show willingness and a positive attitude to

• The majority of respondents answered positively when Personalized

• Respondents recognise the ability of PM and wearable devices to provide

19 Team Finland Future Watch Report, September 2015

• Low adoption among ethnic minority people.

• High resistance to change among rural healthcare workers.

• High adoption rates among urban healthcare consumers.

• Favourable online source at www. ykhoa.net.

• Experienced gained from pilot projects by an international NGO to launch

20 Team Finland Future Watch Report, September 2015

• However, among ethnic minority communities there is a very low rate of