Asia Healthcare Trends 2017 /18 In Pursuit of Equitable, Affordable HealthcareContents Introduction . 3 How to read this report . 5 Executive Summary . 7 China . 11 Hong Kong . 21 Taiwan . 31 Indonesia . 41 Malaysia. 51 Pakistan . 61 The Philippines. 71 Singapore . 81 South Korea . 91 Thailand . 101 Vietnam . 111 A Discussion with Dr Daniel Chan . 121 Regional Variations in Healthcare Cost Drivers . 124 Appendix . 125 References . 137 Contacts . 1453 Until recently, the subject of employee health and well-being was distinguished by two key characteristics within most organisations across Asia. Firstly, its domain was confined to the corridors of HR departments and, secondly, its impact was measured by the year-on-year increase in medical plan cost. Fundamentally, that has now changed. As I meet with senior executives in industry sectors as diverse as manufacturing and professional services, our discussions concerning employee health encompass productivity, absenteeism, employee engagement and talent attraction genitourinary diseases 50 50 50 50 50 48 30 18 14 10 Cost Component 20% 20% 60% Medical fees Diagnostic procedures Drugs/medications Unitary cost Incidence Frequency Inflation Modality 23% 27% 50% Within the Cost Management Impact and Wellness Initiatives sections, we asked insurers to provide us with their observations as to market prevalence or popularity of a range of measures intended to manage healthcare cost or improve employee health & well-being. Again, 50 is the common denominator and the higher the score translates as the more commonly observed the initiative is. Aon Insights Supplementary to these tables and charts, we have provided you with commentary to assist your understanding of the broader landscape within each market. Dependent upon the country in profile, this may include reference to the interaction between public and private health systems, changing demographics, community disease burden, medical tourism, healthcare labour markets etc. We trust that this guide has been helpful as you embark upon your reading of the Aon Asia Healthcare Trends 2017/18 report. Executive Summary The 21st Century has been labelled the Asian Century for good reasons. For the past four decades, Asia has been home to the worlds fastest growing economies. After the Asian financial crisis and recession in the late 1990s, economic growth was reinvigorated and in the aftermath of the financial crisis of 20072008 the global economy became increasingly dependent upon China to counter-balance negative growth in Europe and the United States. By 2012, Asias share of global Gross Domestic Product (GDP) had reached 30 percent and continued to climb i . A rudimentary measure of the impact of this economic growth is the reduction in extreme poverty. Invariably, the spotlight on this subject in Asia falls on China and India which, historically, have been home to the largest populations of extreme poor outside of Africa. Over the past four decades China's GDP growth of nearly 10 percent per annum has not only been the engine room of global economic growth but, domestically, has lifted more than 800 million people out of poverty. In the span of less than two decades (1993-2011) India has reduced its poverty levels from 45.3 percent to 21.9 percent of the total population. This progress in eradicating poverty in the worlds two most populous nations is all the more impressive against the backdrop of continued population growth. Correspondingly, there has been significant growth in Asias middle class. In 2009, the global middle class totaled 1.8 billion people, of which Asia accounted for 28 percent. It is estimated that by 2020 it will reach 3.2 billion and swell to 4.9 billion in 2030, by which time Asia will represent a staggering 66 percent of the global middle-class population iii . Instinctively, this increasing affluence would suggest that there should be improvement in various health indices and, to some degree, this is true. Governments and Non-Governmental Organisations (NGOs) agencies have made substantial gains in eradicating infectious diseases, although as you will read further into this report, hot-spots persist in countries such as Malaysia and Indonesia. Whilst government spending on healthcare and infrastructure has increased markedly, World Bank data shows that for the East Asia/Pacific region (excluding high income countries) just 2.9 percent of GDP is spent on health compared to the global average of 5.96 percent iv . There are two substantive and related health issues that are concerning government agencies. Firstly, a declining birth rate and ageing population threaten to derail economic growth and significantly increase the health disease burden. Secondly, the growth in urbanisation and middle class affluence has been characterised by the adoption of sedentary lifestyles which, in turn, has created an epidemic of chronic diseases including cardiovascular, cerebrovascular, diabetes and cancer-related illnesses. 7