|By China Market Research Reports||Posted in - Saturday, August 25, 2012|
Global health-care spending, with its current rate of growth is expected to doubleby year 2020 and reach a market size worth USD 70.9 trillion, accountingfor almost 25-30 percent of Global GDP.The rise in spending is attributed to growth of health-care market, largely driven by changing consumer dynamicsand increasing acceptance by governments for PPP (Public Private Partnership)model for financing the projects.
The highest contributors to the growth are emerging economies of BRIC and OECD nations. The spending on health-care in these economies is growing at a healthy rate, faster that their GDP growth. Even the world wide per capita income growth rate is exceeded by per capita health-care spending growth rate, which forecasts rising financial burden on governments to meet health-care market demands in near future.These trends have increased the fiscal gap in budgets, forcing governments to adopt PPP models to meet the rising demand.
The efficiency of PPP model and its success rate is expected to further boost the health-carespending, creating newer opportunities worth trillions for companies and financers.The key demographic factors driving the rise in global health-care spending include: rising preference for private sector facilities, ageing global populationand increased awareness.Private sector health-care services are more preferred by consumers due to efficient customer service, reduced waiting time, diverse services, insurance companies' tie-ups with health-care services providers, customized treatment programs, and expert medical professionals.
The other factors supporting the rise in health-care spending include economic indicators such as rise in disposable income. Governments across the globe are encouraging PPP model to meet the health-caredemands, as it saves the burden on the budget and other resources. Also, the intense competitionprovides citizens with quality services and products at competitive prices.A PPP model helps governments with long-term cost savings and policy making, aiding them with policy flexibility.
The global health-care spending market can be broadly categorized in to – Infrastructurespending and non-infrastructure spending. The infrastructure spendingincludesfacility development, medical devices, and other related products and services. Non-infrastructure services include diagnostic services and treatments, risk management and related attributes.PPPs in infrastructure segment have helped governments to focus on larger issues pertaining to their national health-systems without need to inject financial incentives.
Considering the economicgrowth trend shown by emerging economies of OECD and BRIC nations, they are expected to spend approximately USD 3.7 trillion and USD 66.2 trillion on health-care infrastructure spending and non-health-care infrastructure spending respectively, during the decade ending 2020. However, U.S. still holds the highest share of health-care spending followed by Europe.
Outside the U.S and Europe markets, India and China are estimated to contribute the highest to global health-care spending, with both showing an increase of 138% and 163% during 2011 – 2020.The opportunities to tap are vast, ranging from drugs to medical devices and health insurance services, especially in developing economies.
A large number of private health-care providers already exist in the market and are leveraging the potentially unexplored market. Renowned names includeApollo Hospital Enterprise Ltd., Wockhardt Ltd., Mediclinic International Limited, Nuffield Health, Fortis Health-care and Parkway Holdings Limited among many others.