Public-Private Partnerships Drive Healthcare Progress in SEA

Public Healthcare Turns to Private Support

Although healthcare financing has improved, gaps are beginning to show with many social security payers falling into deficit in 2023 and out-of-pocket costs increasing. Even Singapore, the wealthiest market in the region, has seen a decline in fully covered hospital stays, prompting discussions on premium hikes and co-payment models. By the end of 2023, inpatient visits in public hospitals, except in Vietnam, had rebounded to or exceeded pre-pandemic levels. A combination of higher patient volumes, increased care costs, worsening patient conditions, and expanded reimbursement lists has pushed many public healthcare payers into deficit.

With rising demand, financial pressures, and workforce shortages, governments are struggling to expand public hospital capacity in line with population growth. As a result, the past two years have seen an increasing effort to collaborate with private providers through PPPs to ensure public patient access to healthcare. PPPs in Southeast Asia have been instrumental in bridging gaps in healthcare access, infrastructure, and innovation. Governments collaborate with private entities to leverage resources, expertise, and efficiencies that neither sector could achieve alone. 

In the Philippines, the government has actively pursued PPPs to sustain and enhance state healthcare provision. Recognizing the need for private sector investment, the market has implemented projects where private entities contribute to the development and management of healthcare facilities and services. 

Similarly, Indonesia has encouraged private sector involvement in healthcare by revising regulations to attract foreign investment. Malaysia’s PPP model has also enhanced access to comprehensive care, improved quality management, and strengthened service delivery through various funding and sponsorship initiatives. These partnerships have led to significant investments in healthcare infrastructure, including the development of hospitals, clinics, and diagnostic centers.

Healthcare Insurance: The Intersection of PPPs

PPPs have played a crucial role in expanding access to insurance products for underserved populations in Southeast Asia. Government collaboration has also been pivotal in supporting these PPPs in the insurance sector. By creating conducive regulatory frameworks and policies, governments enable private companies to offer innovative insurance products.

Many innovative insurance models have emerged from these combined efforts. For example, microinsurance schemes have been developed to provide affordable health coverage to lower-income individuals. These schemes often involve partnerships between governments, private insurers, and non-governmental organizations to pool resources and share risks.

Numerous insurers and banks in Singapore also now offer microinsurance, which has brought accessibility and flexibility in insurance to those who are typically limited in their insurance options. The region is reflective of this progress with research indicating that Asia will be leading the microinsurance market. This collaboration benefits the underserved populations and allows private insurers to tap into new markets, creating a holistically positive outcome for all parties involved.

Successes like this aside, many potential challenges still exist in this sphere. Regulatory hurdles can impede the swift implementation of such projects, while cultural differences may affect the acceptance of private sector involvement. Additionally, misalignment between public and private sector goals can lead to discussions, especially when business performance motives clash with public health objectives.

The Potential of PPPs

Looking ahead, PPPs have the potential to evolve and scale insurance accessibility and healthcare service delivery across the region’s diverse populations. Continued innovation in insurance models, supported by robust policy frameworks, can further reduce barriers to healthcare access.

Moreover, as digital health ecosystems develop, PPPs can leverage technology to enhance service delivery and expand reach. This way, the future of healthcare and its related insurance in Southeast Asia will be defined by greater inclusivity, sustainability, and resilience, ensuring quality care for all.