Civica
Financial intelligence for Asia's healthcare markets
 
 
Remember me:

Analysis: Winners and losers in South Korea

The ambitious healthcare agenda under Moon Jae-in's liberal presidency will seek to expand national health insurance reimbursement and limit the burden of excessive medical costs, while overhauling the healthcare system. BMI Research looks at the winners and the losers in the presidential agenda.

The healthcare agenda of President Moon Jae-in of the Minjoo (Democratic) Party, who took office in May 2017, will aim to increase the role of the public sector in the healthcare system and expand national health insurance reimbursement cover to reduce the burden of high medical costs, including an annual cap of W1 million (US$862) on patient contributions to medical care costs for citizens on low incomes. In order to secure the long term sustainability of the healthcare system, the president will seek to move the focus of healthcare delivery from large hospitals to cheaper primary care structures. This will involve limiting the expansion of large hospitals and restricting the number of small and medium supply hospitals, some of which will be encouraged to convert into specialised institutions.

In August 2017, President Moon Jae-in announced an investment of KRW30.6trn (USD26.4bn) over his five-year presidential terms to fund the expansion of health insurance cover to all major illnesses and to pay for costs that are currently uninsured such as specialist appointments and nursing care. Reimbursement for technical aids such as dental implants and hearing aids will also improve. The government estimates that full implementation of its plans would reduce personal spending on medical care costs by an average of nearly one fifth by 2022, with a reduction of nearly half for citizens on lower incomes.

We note that South Korea has an unusually high level of private sector health funding for an OECD country and the level continues to grow. In 2017, we estimate that the private sector will fund 46.7% of total healthcare expenditure of W131.7 trillion (US$113.5 billion), up from 43.3% in 2010. More than three-quarters of private health spending is in the form of out-of-pocket payments.

In order to achieve long term financial sustainability, the government will seek to limit the amount of hospital based outpatient care in favour of more cost-effective primary care services. This will increase financial pressures on hospitals and is also likely to frustrate the Ministry of Health and Welfare's plans to develop telemedicine, limiting the rollout to areas with the least developed healthcare resources.

The government's healthcare agenda has already met with fi erce opposition from healthcare providers and doctors, including the National Union of Korean Medical Doctors and the Korean Medical Practitioners Association. Healthcare providers have condemned the plans as unviable and a threat to the financial position of the health insurance system, which would either lead to a sharp increase in health insurance premiums or a drop in fees paid to medical institutions, forcing many of them bankruptcy.

We highlight that the Moon administration will struggle to fully implement its healthcare agenda given it lacks a majority in parliament, which will hinder efforts to achieve policy objectives. We note that Moon's first 100 days in government have been characterised by considerable opposition as the president struggles to implement his various campaign policies, despite persistently high public approval ratings. We therefore maintain our short term political risk score at 70.0 to reflect these difficulties.

Posted on: 03/11/2017 UTC+08:00


News

Medical diagnostic imaging services provider Capitol Health has said that it expects to return to profitability in the next financial year and has upgraded its outlook for the year.
Paragon Care, a leading distributor and manufacturer supplying medical equipment to hospitals, has said that it is “targeting strong growth in 2018 across all key metrics”.
Malaysian medical glove manufacturer Supermax Group has reported a 42.8% jump in Q1 profits to M$27.9 million (US$6.8 million) on revenues that 16% to M$312 million.
At its annual general meeting, international pathology, imaging and medical centres operator Sonic Healthcare reaffirmed guidance for the year. Chief executive Colin Goldschmidt said that the first quarter of the 2019 financial year confirmed expectations that underlying earnings would grow between 6% and 8% on a constant currency basis.
It has been another great quarter for China Cord Blood Corporation (CCBC), the country’s largest provider of cord blood storage and ancillary services. For the second quarter in a row, profits more than doubled. They came in at US$10.2 million.
New Zealand-based medical device manufacturer Fisher & Paykel Healthcare has reported a steady set of first half figures. Profits were up 4% to NZ$81.3 million (US$55.3 million) on revenues that rose 8% to NZ$458.4 million.
Retirement village operator Arvida has reported a 14.5% slump in profits for the first half of the year to NZ$14.5 million (US$9.9 million). At the same time, revenues were up 27.9% to NZ$60 million.
Medical device manufacturer Microport Scientific Corporation plans to acquire the cardiac rhythm management (CRM) business of London-based medical device manufacturer LivaNova for US$190 million.



Analysis

The promise of a bottom in Singapore’s office market has caused its ranking as an investment market to soar from next-to-bottom last year to third in this year’s “Emerging Trends in Real Estate Asia Pacific 2018” report, a real estate forecast jointly published by the Urban Land Institute (ULI) and PwC.
Kamal Brar, vice president and general manager of Asia Pacific for data software company Hortonworks, looks at how data analytics can provide effective and affordable healthcare in Singapore.
The latest Sun Life Financial Asia Diabetes Awareness Study reveals an alarming knowledge gap in diabetes. A third of Asian women who are or were pregnant in the past three years are unaware of the risk of developing gestational diabetes in pregnancy, while one in seven births in Asia is currently affected by gestational diabetes.
Gan Kim Yong, Singapore’s minister for health, explains why the private sector needs to get behind the National Electronic Health Record System.
Business leaders in Asia Pacific’s healthcare industry are showing urgency in embracing the fourth industrial revolution, according to the Microsoft Asia Digital Transformation Survey. More than three-quarters of them believe that they need to transform to a digital business to enable future growth and yet only a quarter said that they have a full digital strategy in place today.
An agreement for an additional US$15 million funding from the World Bank will be used to expand health and nutrition coverage in the Lao People's Democratic Republic. It is expected to benefit more than 1 million people across 14 provinces.
Bart Van den Mooter, CEO of the TforG Group, looks at the drivers behind the rapid growth in Asia’s medical tourism market.
The ambitious healthcare agenda under Moon Jae-in's liberal presidency will seek to expand national health insurance reimbursement and limit the burden of excessive medical costs, while overhauling the healthcare system. BMI Research looks at the winners and the losers in the presidential agenda.


Civica

Podcasts

AON

Hedge Fund Focus

HealthInvestor Asia twitter feed
HIA Indices