Healthcare: Driving Development Beyond Java
    Category: Column By : Rhenu Bhuller & Jyoti Nagrani Read : 682 Date : Monday, June 20, 2016 - 01:47:12

    The healthcare industry is evolving constantly to meet the growing demands and pressures from payers and patients. Care delivery is getting modernized and decentralized and industry convergence is generating new opportunities for market participants to provide services and establish partnerships. Demand for healthcare services will continue to grow in Asia, driven by demographic and epidemiological transitions impacting the region. Regional governments are taking decisive steps to innovate their healthcare systems.

    In Indonesia, healthcare delivery transformation was initiated with the launch of Jaminan Kesehatan Nasional that aims to provide healthcare services to the entire population by 2019. Indonesia is facing major trends, including a growing middle class and rapid urbanization, resulting in rising communicable and noncommunicable diseases, and an aging population that will hit 74 million by 2050. These trends will drive demand for more affordable and efficient healthcare.

    Indonesia is a predominantly urban country, with about 53% of its population in urban areas, as of 2015. This expanding urban population drives growth. Indonesia’s urban population is not equally distributed. Java accounted for 67% of the national urban population in 2015. Frost & Sullivan believes that numerous urban centers beyond Java, such as Palembang, Makassar and Balikpapan, should reap greater benefits from urbanization. Additionally, Kalimantan, Maluku and Papua should register the highest urbanization growth compared to other regions.

    Indonesia aims to increase its healthcare expenditure annually at 15% CAGR to reach $53 billion in 2017, including greater investment in healthcare infrastructure, which can be met through more private sector investment. Investments in expansion of current services, technology or new businesses can help improve healthcare services through increasing quality of care, improve efficiencies or lowering costs. Opportunities to provide healthcare services through channels such as public private partnerships lie in regions with the largest needs, with Papua and Sulawesi having the fastest growth rates.

    Though nascent, hospitals and other healthcare providers are now increasingly investing into digital health, especially using connected healthcare services to improve access to Indonesia’s rural population. Alternatively, the growing middle class will seek health apps and online services, so they can make better healthcare choices. Indonesia smartphone penetration is estimated to have exceeded 50% in 2015 from 23% in 2014. Companies like Practo Healthcare and Konsula, allowing users to consult with doctors remotely, are providing new healthcare options.

    The Lippo group recently invested in Prenetics, a medtech startup offering personalized and precision medicine. In addition, a smart investment in the future can potentially lie in using big data analytics to improve prevention and aid early intervention. The government now has a major commitment to improving the health of communities across Indonesia. Therefore, investment in health care, both local and foreign, from healthcare and non-healthcare sectors should be received with open arms to help improve health services in Indonesia.