HCM City (VNA) – The rising demand for healthcare hasmade Vietnam a promising destination for domestic and foreign investors.

According to the Finance Ministry’s Departmentof Public Expenditure, society’s total spending on healthcare compared to grossdomestic product has been increasing. Since 2008, the State budget’s spendingon healthcare has risen at a faster pace than the budget’s overall spendinggrowth rate, reaching about 7 – 8 percent of total State expenditure.

In Vietnam, private medical establishments havebeen developing strongly in recent years. While there were no private hospitalsbefore 1993, the number of such facilities has reached 206 at present. Morethan 35,000 private clinics have also been opened nationwide.

Dilshaad Ali, an advisor of DG Medical – ahealthcare solution providing company, noted several important factors makingVietnam’s healthcare sector attractive to investors, including an agingpopulation, fast economic growth, changing lifestyles, and rising demand forhealth insurance.

He added as the middle class is flourishing,people have also increased their spending, leading to the mushrooming ofprivate medical establishments in big cities.

More than 80 percent of Vietnam’s population iscovered by health insurance and five percent have private health insurance.Meanwhile, 73 percent of the population pay hospital fees in cash. Notably, thehealthcare public-private partnership model is still in the initial stages.

These factors contribute to investors’ interestin Vietnam’s healthcare market, Ali said.

Other experts said apart from soaring demand forhigh-end services, the State’s plan to divest capital from many bigpharmaceutical firms has also encouraged private investment.

The recent wave of private investment in thehealthcare sector began in 2015 with several mergers and acquisitions(M&As). Recently, the Hoan My Medical Corporation has performed multipleM&As to expand its network, the Nha khoa My group has merged into the SunMedical Centre, and Japan’s Taisho Pharmaceutical Co. Ltd has spent anadditional 3.4 trillion VND (145.8 million USD) to buy almost 67 percent of DHGPharmaceutical JSC – the biggest pharmaceutical company in Vietnam.

Deputy Director of Ho Chi Minh City’s Departmentof Health Tang Chi Thuong admitted that the State-owned system hasn’t been ableto meet rising demand for healthcare.

He noted in 2018, there were more than 45.3million outpatient visits and 2.5 million inpatient stays in medical facilitiesin HCM City, and these figures are still growing, worsening overloading atcentral hospitals.

Echoing the view, Secretary General of the HCMCity Society for Reproductive Medicine Ho Manh Tuong said the ongoing outflowof Vietnamese people to other countries to receive treatment shows the localhealthcare system hasn’t kept up with demand.

As the city lacks funds for public medicalservices, it is necessary to issues policies encouraging private investment, headded.-VNA