SEA Health Tech Investment Insights

Key Challenges in the Current Healthcare System include... Maldistribution of Healthcare Resources Brain Drain Rising Healthcare Costs Fragmented, Inadequate Governance Framework Healthcare resources are heavily concentrated in the more economically developed island of Luzon Luzon houses ~53% of the population, but has 65% of hospital beds in the Philippines Geographically isolated and economically disadvantaged areas (e.g. in Mindanao) suffer from a shortage of healthcare professionals and facilities - Mindanao has only one bed per 4,606 people compared to one-per-591 in Metro Manila. The Philippines is a major exporter of healthcare professionals (6th largest contributor of doctors and top contributor of nurses to OECD countries), but struggles to ensure adequate availability within the country, with an estimated shortage of 23,000 nurses in the Philippines Push factors include low salary and poor working conditions, but tele-health offers potential to connect this diaspora of healthcare professionals with needs back in the Philippines Healthcare costs are rising significantly - Willis Towers Watson estimated medical costs net of general inflation would increase by 4.9% in the Philippines in 2020 Financial protection from PhilHealth remains limited, resulting in a shift in demand towards the value segment (both in medicines and medical equipment) to contain healthcare costs The Philippines lacks a centralized healthcare resource allocation authority, with the public healthcare system fragmented between the demand-side (Department of Health, local government units) and the financing supply-side (PhilHealth), resulting in procurement inefficiencies and shortages in medicines and equipment. The fragmented nature of the healthcare system has resulted in inefficiencies and misallocation of resources Sources: Various sources including WHO Asia Pacific Observatory on Health Systems and Policies; PwC ("Embracing New Healthcare Technologies that Empower Filipinos"), Japan Times article ("Brain drain: Philippines sends nurses around the world but lacks them at home") INSEAD 48

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