Vietnam health expenditure to reach $33.8 bln in 2030: analysts

Vietnam’s health expenditure, valued at $20 billion in 2021, could rise to $23.3 billion and $33.8 billion by 2025 and 2030, respectively, a new report says.

Titled “Healthcare in Vietnam,” the report by Flanders Investment and Trade estimates per capita healthcare spending to rise 9.2% per year between 2009 and 2025 in Vietnam, reaching $262 by 2025.

Particularly, health expenditure in Vietnam is valued up to $20 billion in 2021 and could rise to $23.3 billion in 2025 and $33.8 billion in 2030, equivalent to a compound annual growth rate (CAGR) of 7.6% .

Private healthcare expenditure is expected to expand at a 7.5% CAGR, owing mostly to increasing insurance coverage for citizens.

In terms of spending, Vietnam’s healthcare market share is currently divided almost equally between the private and state sector. The private sector accounted for 49.5% of total spending on health, though it only accounts for 6% of the total number of hospital beds.

Vietnam has about 1,531 hospitals, more than 86% of them public hospitals. The private hospitals are mainly concentrated in large urban areas like Ho Chi Minh City, Hanoi and Danang.

Around 1,318 public hospitals are classified as central, provincial and district/commune level facilities.

Healthcare in Vietnam is dominated by public organizations. However, due to overburdening and limited government funding, the private healthcare sector is gaining more attention, the report says.

The government is also offering a range of investment incentives for the private healthcare sector, including tax exemption of four years and 50% tax reduction for the following nine for newly established healthcare providers. The incentives have resulted in a rapid rise in the number of private hospitals for several years now.

The majority of private hospitals are still concentrated in large cities. Additionally, a lot of private healthcare services are directed towards the high-end market, aimed at foreigners and locals with high incomes.

Although private healthcare providers in major cities only account for 6.3% of inpatient care, they perform 32.2% of outpatient care, according to a report by Viettonkin Consulting. Some of the common services offered by private healthcare providers include dental care, diagnostic services and examination and imaging services.

The report says that “an ageing population, an emerging middle and affluent class and an increasing burden of chronic diseases reflect demographic shifts and societal changes in Vietnam relevant to the healthcare sector. These trends are driving up the demand for long-term care.”

It also notes that “access to middle-class comforts is both fueling increasing demand for more health options and resulting in more sedentary lifestyles that will inevitably lead to greater incidences of obesity, diabetes, and other costly, chronic health conditions.”

Challenges

Since most public hospitals in the country were built more than two decades ago, most need upgrades.

Overcrowding, especially in central-level facilities, has been another long-standing problem. The bed occupancy rate in Vietnam far exceeds the “threshold occupancy rate of 80% recommended by the World Health Organization (WHO).

Inequality of care is a serious problem that many officials, experts and industry insiders have commented on for years.

Patients prefer treatment at overcrowded national level hospitals than provincial or district level ones due to the availability of higher quality medical equipment and more qualified staff in the former. This situation requires doctors and nurses to tend to a large number of patients and work long hours under stressful conditions for relatively low wages.

The rising demand for healthcare services as the result of an aging population also generates fiscal pressures. A report by Vietnam National Committee on Aging in 2019 said there were about 10,000 old people living in public social protection centers. As a result, the demand for private institutional care is huge, the report says.