Healthcare services, medical technology (medtech) firms, and pharmaceutical companies operating out of Southeast Asia (SEA) are seeing a robust recovery from COVID-19, with significant financial improvement and projections for continued growth for the next three years. Collective priorities to help drive this growth include acquiring new technology, adding acute beds, and increasing capacity for diagnostic imaging, primary care, dental care, and general surgery.  

This is according to an annual L.E.K. survey of several hundred decision-makers at key hospitals in the SEA region, including Singapore, Thailand, Malaysia, Vietnam, Indonesia, and Philippines. The survey addresses issues relating to the financial outlook of hospitals and top operating priorities in the next few years, as well as the impact of digitalization on hospitals and their relationships with medtechs and pharmaceutical companies. Analysis of the results can inform medtech players making strategic decisions about engaging stakeholders, tailoring products and service value propositions, and leveraging digital channels. 

A promising financial outlook 

Both public and private SEA hospitals report recovering well from the impact of COVID-19, with increasingly optimistic financial prospects; private hospitals generally reported better profitability profiles. Surgery-oriented departments such as orthopedics and oncology have 80-90% recovered to a pre-COVID level, judging from indicators of elective procedures.  

Looking forward, hospitals across SEA are optimistic about future capital expenditures, with a significant number expecting a notable increase of over 5%, reflecting recovered confidence and growing healthcare needs. 

Operational priorities 

In the coming years, hospitals are expected to prioritize offering new medical technologies or cutting-edge treatments and improving staff safety. They are also seeking to standardize purchasing of medical consumables, diagnostic imaging equipment, and clinical support appliances, mainly through choosing a preferred supplier for specific procedures or products. Many hospitals are planning to increase investment and capacity in diagnostic imaging, primary care, dental care, and general surgery over the next three years to meet growing healthcare demands. 

Additionally, most hospitals anticipate an increase in the proportion of acute beds in the next five years. Those reporting an expected decrease are looking at bed redeployments rather than retirements. 

Go-to-market strategies 

Post-COVID-19, public hospital management like C-suite leaders, vice presidents, and directors have more influence in purchasing capital equipment and appliances throughout SEA. Clinical department heads are serving as secondary decision-makers to ensure specific needs are met, with key influence over consumables.  

SEA hospitals prioritize working with medtechs that offer valuable services in addition to products, serving as strategic partners and solutions providers. Responses indicated the most valued services were in supply chain and operation management, population health services, clinical IT and analytics, and education and training.  

In the pharmaceutical sector, the top criteria for adding products to the formulary list include inclusion of group purchasing organizations (GPOs), reimbursement eligibility, and alignment with clinical guidelines. In most countries, pharmaceutical companies are highly valued for offering treatments that can drive reduction in medical errors, improve patient outcomes, and do not require to be administered in hospitals. Sales representatives have faced the common challenge of more restricted hospital access in 2023 compared to 2022. 

Ahead in digitization  

Hospitals in SEA are at the forefront of healthcare digitization implementation within the Asia-Pacific region, particularly in areas related to patient administration, patient information management, and personal data handling. SEA leads in implementing wellness and prevention programs and remote consultation compared to China and India, but lags on patient information and personal data. This strong performance will continue as hospitals across the SEA region increasingly realize the diverse value of digital health solutions.  

To learn more about the outlook and operational priorities of public and private hospitals in Southeast Asia, please download our analysis.   

L.E.K. Consulting is a registered trademark of L.E.K. Consulting. All other products and brands mentioned in this document are properties of their respective owners. © 2023 L.E.K. Consulting 

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