Can Asia-Pacific healthcare survive the post-Covid economy?

According to the World Bank¹, the region tops the global tables in terms of life expectancy and proportion of citizens aged over 65. Indeed, the top five countries for life expectancy in 2020 were all Asian: Hong Kong (85), Japan (85), Macao (85), Singapore (84), and Korea (83). By 2050, one in four people in Asia will be over 60, according to the Asian Development Bank².

The COVID-19 pandemic raised questions about the adequacy of hospital and healthcare systems, the availability of GPs and specialists, and, in particular, accessibility for the elderly. However, the crisis also showcased the industry's dynamism as it worked with a range of stakeholders – including governments and the private sector – to innovate medical services and healthcare.

A growing opportunity for innovative services

The region needs this to continue. According to the WHO³, financial hardship is likely to worsen further among those paying out-of-pocket for health, particularly in disadvantaged populations. Meanwhile, at the other end of the market, medical and health services are becoming increasingly popular in APAC as people age, focus more on health issues, and have greater disposable incomes.

In its 2022 report on Asia's healthcare industry, consultancy Bain & Company said, “Asia-Pacific markets are seeing increased consumerism and willingness to spend on healthcare, which has fuelled activity, especially with investments in building a more robust consumer-centric digital health environment."⁴

With US$16.9 billion invested across 156 deals, APAC accounted for around 41% of global healthcare private equity deals in 2020.⁵ In 2021, private equity completed 179 APAC healthcare buyouts and investments – compared to just 68 deals in 2019 and the pre-Covid high of 88 in 2018 – while aggregate deal value also surged to US$17.8 billion.⁴ McKinsey suggests that digital health in Asia could collectively create up to US$100 billion in value by 2025, up from US$37 billion in 2020.⁶

At street level, healthcare start-ups are attracting funding from governments and private investors to provide and enhance services across the sector.

For example, in February 2022, Singaporean company MiyaHealth raised US$6.5 million in one of the largest pre-Series A rounds by a health technology start-up in Southeast Asia.⁷ Meanwhile, Homage, another Singaporean startup that matches patients who need long-term home care with qualified caregivers, secured US$30 million in funding in 2022 and is diversifying beyond caregiving to include services such as telemedicine and medicine delivery while also selling medical products.⁸ And in China, Tencent-backed online healthcare platform WeDoctor secured over US$150 million from a local investment fund this year.⁹

Read more about how are innovative companies preparing for tomorrow's healthcare

Maintaining the momentum

Despite burgeoning healthcare investment, some believe that, without policy interventions, funding will soon wane as investors pull back amid the global economic downturn, threatening the significant gains made over the past few years.

Therefore, APAC governments are stepping in to ensure that the flow of capital and investment continues. Healthcare innovation is a growing focus of long-term policy plans in the region, and APAC governments are encouraging the private sector to continue investing in healthcare through the economic cycle.

For instance, beginning in 2024, the Hong Kong government will make use of land in the Hong Kong-Shenzhen Innovation and Technology Park to attract companies and talent to the region with a focus on strategic industries such as life and health technology.¹⁰ The Hong Kong stock exchange is already one of the world's leading platforms for biotech funding.

Find out about Global HealthTech.

Maximising returns is key to the sector's future health

Elsewhere, Singapore and other Association of Southeast Asian Nations (ASEAN) members are collaborating to transform their healthcare industries to 'future-proof' services and relieve systemic pressure from ageing populations. At a November conference focused on digital healthcare in Southeast Asia, the region's health and finance ministers joined industry representatives to discuss the need to clarify, modify, and co-create regulations to keep up with evolving technologies and services. Crucially, maximising returns on healthcare investments was among the key themes.¹¹

For APAC, increasing visibility on potential returns is vital if the region's healthcare sector is to attract more private capital and continue to grow. The industry innovation – not to mention a growing appetite from the region's ageing demographic for its services – is certainly there.

¹The World Bank (n.d.) 'Life expectancy at birth, total (years) - World'.
²Asian Development Bank (n.d.) 'Adapting to Aging Asia and the Pacific'.
³World Health Statistics 2022, World Health Organisation (annual report), P61.
⁴Kapur et al. (2022) 'Healthcare Private Equity in Asia-Pacific: A Multiyear Growth Trajectory', Bain & Company.
⁵Yeo, S. (2021) 'How Hong Kong is supporting its healthtech startups', Tech in Asia.
⁶Baur et al. (2021) 'The future of healthcare in Asia: Digital health ecosystems', McKinsey & Company.
⁷Yong, Y. (2022) 'Singapore's MiyaHealth to expand globally starting with Europe & Asia, digitalizing healthcare systems', TechNode Global.
⁸Kang, J. (2022) 'New Technology For Old Age: Singapore Caregiving Platform Homage Hustles To Keep Up With Demand For Care As Asia Ages', Forbes.
⁹Forbes (2022) 'Forbes Asia 100 To Watch 2022'.
¹⁰XINHUANET (2022) 'Hong Kong holds Asia Summit on Global Health'.
¹¹Taiwan News (2022) 'Regional collaboration critical as ASEAN invests in digital transformation to future-proof healthcare systems: 2nd ASEAN Digital Public Health Conference'.