Healthcare sector lays golden eggs for investors

VietNamNet Bridge – The total expenses paid by Vietnamese on healthcare services in 2013 rose to $12 billion from $6.55 billion in 2008, according to StoxPlus.

StoxPlus, investment in health sector

Great potentials

The attractiveness of the healthcare sector can be proved by the fact that the spending on healthcare services keeps increasing steadily year after year, despite the big economic difficulties, which have forced people to fasten their belt. Of the $12 billion spent in 2013, 50 percent came from people’s pockets.

However, analysts have noted that the figures still cannot truly reflect the real scale of the market.

Experts and hospitals’ managers all have said the actual revenue of hospitals is 1.5-2 times higher than the reported figures.

Besides, the figures do not include the sum of $1 billion Vietnamese spend every year for the healthcare services they receive overseas.

It is obvious that medical services have a very potential market. Besides the “main players” – the state owned hospitals, there are also the private run hospitals which account for 8 percent of the total 1,184 hospitals throughout the country.

HCM City with the population of 10 million people and the highest average income per capita is really a lucrative land for investors to develop private healthcare services.

There are 35 privately run hospitals in the economic center, or 1/3 of the total private hospitals nationwide.

StoxPlus has predicted the annual growth rate of 15 percent of the market in 2012-2017, which is higher than 12 percent projected for 2006-2011.

The bright and dark parts of the market

Though the market proves to be very promising, analysts say it is very easy to exist and develop.

Trieu An, established in 2001, An Sinh, Hoan My, Van Hanh and International Obstetrics and Gynaecology Hospital, the successful establishments all belong to the “first investment wave”, i.e. the first private hospitals set up right after the State turned the green light on private investors to open hospitals.

Dr. Nguyen Huu Tung, the founder of Hoan My Medical Group, noted that 2000s were the time when Vietnamese were very thirsty for healthcare services.

Therefore, the “pioneers” had great advantages to develop their services. They could attract high numbers of good physicians who could not seek job promotion at state owned schools, or invite leading experts to work for them.

At that time, the investors were also specially encouraged by the State which offered a lot of investment incentives.

The report of a private hospital near a residential quarter showed that the land leasing fee was just VND50,000 per square meters, stable for 50 years. Meanwhile, the hospitals can enjoy the preferential corporate income tax rate of 10 percent instead of 25 percent.

Meanwhile, according to Tung, the other private hospitals in HCM City have been struggling to survive. Most of them are the “new comers.”

One of them was Phu Tho General Hospital in Tan Phu district. The 500-bed hospital has stopped operation for one month, while medical equipments have been taken away. The problem was that Phu Tho could not persuade qualified and famous doctors to cooperate.

Will the merger and acquisition help? The answer is that investors do not lack money to invest, but they are only interested in the hospitals which they are certain of making profit in the near future.


StoxPlus, investment in health sector