Medisetter Interview: Insight On Opportunities In Asia's Healthcare Industry

by: Dylan Waller


Vietnam is seeing a divergence between the growing demand for healthcare from an increasingly wealthy, educated and demanding middle and upper middle class and the quality and quantity of healthcare.

Apart from countries in the Middle East, which still have high birthrates, most Asian countries are seeing their population age rapidly.

I think India is going to grow in popularity as its infrastructure and general tourism infrastructure improves.

Introduction to Medisetter

I had the pleasure of interviewing Anirban Lahiri of Medisetter to discuss some of the opportunities present in Asia's healthcare industry. Medisetter is an international online medical travel search and bookings platform offering a one-stop-shop medical travel booking and planning service. Prospective patients can search and compare hospitals and clinics across different countries, receive price quotes, book appointments and also book accommodation, translators and interpreters and car services in their chosen destination countries. Medisetter has already partnered with 60 leading hospitals and clinics across Singapore, Malaysia, Thailand, South Korea and India, and is targeting patient populations in Vietnam, Cambodia, Bangladesh and Mongolia.

Dylan Waller: What opportunities do you see in the healthcare sector in countries such as South Korea, Sri Lanka, and Thailand, in terms of their high aged populations?

Anirban Lahiri: The ageing phenomenon is actually the rule rather than the exception. Apart from countries in the Middle East, which still have high birthrates, most Asian countries are seeing their population age rapidly. In all of these countries, disease burdens will rise as the overall population becomes older and this creates opportunities for adding capacity to existing healthcare infrastructure - hospitals, clinics and diagnostic centers.

Countries like Korea, which have been ageing for a while, have already developed old-age/retirement homes and nursing facilities whereas countries - Thailand, Sri Lanka, Vietnam, Cambodia, India etc. - will see a surge in need for old-age homes as the traditional multi-generational family increasingly fragments and the elderly are unable to live in the same homes as their children and grandchildren.

Regarding opportunities, in all of these countries, there is a sizable opportunity in using IoT technologies and bio-sensors for remote monitoring and drug compliance purposes for elderly people who live alone, coupled with community-based clinics centered around a "family doctor" model. This can help greatly enhance primary care and preventive medicine, thereby reducing the burden on public resources. In technologically advanced and wealthier countries, like Korea, there is a growing niche to use robotics for assisting the elderly who live alone.

For countries like Sri Lanka that have underdeveloped healthcare expertise in-country, there is also an opportunity to boost medical tourism to nearby centers of excellence in India or use telemedicine for those that have limited mobility due to either age or sickness.

Dylan Waller: I have looked at Sri Lanka's healthcare industry, and noted how private hospitals have achieved double the rate of growth of public hospitals, greatly attributing to the rise of its middle class. How do you see the rising middle class, coupled with an increased insured population, serving as a catalyst for the development of healthcare industries in various frontier markets in the future?

Anirban Lahiri: This is a clear trend that is currently unfolding in several countries with stunted public healthcare infrastructure and limited public resources - India is a classic example where the private sector has taken over the responsibility of providing high-quality and affordable healthcare to the citizenry.

Sri Lanka and other frontier markets such as Bangladesh, Cambodia, Myanmar etc., which are seeing a surge in their middle-class ranks, should follow the path of India with the gap between private and public healthcare facilities widening rapidly, both in terms of capacity and quality.

"Transitional economies" like Vietnam should see a similar trend play out but at a slightly slower pace; its communist legacy has meant that there are basic standards in public health and providing healthcare to the population is still considered a key responsibility of the government. In Vietnam, highly qualified doctors prefer to work with public hospitals and, for historical reasons, the population trusts public hospitals more than private hospitals. However, the overcrowding of public healthcare facilities is ultimately going to have to be addressed and, given limited government resources, the private sector will ultimately take on the lead role.

The trend above will create a surge in demand for hospitals, medical devices and equipment as well as well-trained doctors and nurses. Since the "soft skills" development will require the entire medical education and training ecosystem to move up several notches in terms of quality and capacity, the demands of an increasingly wealthy middle class will not be completely satisfied through local healthcare supply. Expertise will continue to be "patchy" and quality control will be an issue as the supply-side ramps up capacity rapidly. Therefore, this will result in the rapid growth of outbound medical tourism from these countries to centers of excellence in the region such as Singapore, Thailand, India, Malaysia and even South Korea with the wealthier segments of the middle class choosing to pay a premium for the greater level of quality assurance.

Dylan Waller: While Thailand is certainly leading Asia as a medical tourism destination, locations such as Sri Lanka and India, to name a few, are also appealing, particularly for the high prevalence of English in businesses in these countries. What are some other markets besides Thailand that you are optimistic about in the long run?

Anirban Lahiri: I think India is going to grow in popularity as its infrastructure and general tourism infrastructure improves. A few years back, the whole of India had fewer hotel rooms than the tiny city-state of Singapore! India's tourist-unfriendly infrastructure has hindered its ability to gain more market share, but at the same time, it is the best value destination and, owing to the sheer volume of certain types of surgeries performed by some hospitals and doctors, for medical tourists. India is particularly well-regarded for as an attractive destination for cardiac and orthopedic surgery, offering up to 70-90% cost savings versus the US and parts of Western Europe.

Sri Lanka, on the other hand, does not have comparable levels of medical expertise (and hence Sri Lankans travel in en-masse to India and Singapore for medical treatment) but, given its tourism appeal, could market itself as the perfect wellness or rehabilitation destination for medical tourists coming out of surgery or treatment in neighboring India.

Other markets that are gaining traction include Malaysia, which has high-quality infrastructure, doctors who have trained in Singapore and India, stringent regulatory standards and an English-speaking population. For procedures or treatments that are not complicated, Malaysia offers comparable quality to Singapore at much lower price points.

South Korea is a fantastic destination that has tremendous potential. It has long been considered a mecca for plastic surgery but the high quality of its healthcare system, across the board, is only just being discovered. The country has among the highest cancer-survival rates in the world and is also a world-leader in complicated areas like spine surgery. Despite the popular perception that it is an "expensive" destination, South Korea offers 30-40% lower prices than Singapore with comparable or even higher levels of quality in select areas. The high-tech nature of the economy also means that hospitals in South Korea are equipped with the latest medical equipment and the country could become a world leader in robotic surgery.

Within South East Asia, Vietnam is developing pockets of excellence in areas including dentistry and fertility treatment (in-vitro fertilization). Hence, Vietnam has a unique opportunity to develop itself as a medical tourism destination for simpler, elective medical procedures. Given its fast developing tourist infrastructure and quality holiday spots, Vietnam could make strides, though the quality of English skills among the populous would need to first see improvement.

Dylan Waller: I would like to turn things specifically to Vietnam, which has ample opportunity due to the country's relatively lower healthcare spending per capita, low penetration of insurance, a robust and rising middle class, and strong double-digit growth projected for its pharmaceutical industry, in particular. What are some of your thoughts on the opportunities and challenges presented in Vietnam?

Anirban Lahiri: Vietnam is seeing a divergence between the growing demand for healthcare from an increasingly wealthy, educated and demanding middle and upper middle class and the quality and quantity of healthcare supply that is being added into the system. With government hospitals running, in some cases at 130% to 140% capacity, anecdotal accounts of three patients sharing a single bed, patients and their families camping for 4-5 hours in un-air-conditioned hallways of public hospitals and limited face time with doctors are all common. There is, therefore, an opportunity for the private sector to ease this overcrowding - tertiary care hospitals are in high demand.

There are two key challenges, however, for the private sector. First is the lack of trust in private hospitals - given that the government monopolized healthcare delivery since inception, Vietnamese are inherently more trusting of public hospitals and the best doctors are reluctant to move to the private sector given the prestige of being associated with a top government hospital and the promise of tenure that comes with it. Hence, private hospitals in Vietnam (save for a few) have not done very well. The service levels are far better and the waiting times are negligible but the cost of attracting quality doctors makes these hospitals uncompetitive in terms of price, especially when you consider that expenses incurred at private hospitals are not reimbursable under the public medical insurance policies. Wealthier patients (upper middle class and above) who are indifferent to the public insurance reimbursement benefits of going to a government hospital would rather go to a trusted hospital overseas where they are assured of higher quality. It takes a long time to build trust in the healthcare field and the inherent trust deficit that private hospitals here have to deal with will be a key challenge to getting the sort of patient loads that justify their huge capital expenditures in building high-quality facilities and procuring the latest medical equipment.

Dylan Waller: Pharmaceutical stocks in Vietnam have delivered stellar returns this year, and there is a large amount of attractive growth stocks listed in Vietnam. What developments and opportunities do you see happening in terms of opportunity presented specifically from listed equity?

Anirban Lahiri: The Vietnamese government is actively promoting the development of the local generic pharmaceutical manufacturing industry. A number of foreign generics players from India, Korea and other countries have recently been barred from the market as the government tries to reduce its dependence on imported drugs, thus, benefiting the local pharmaceutical industry as a whole. However, DHG is the only sizeable pharma company that allows investors to gain exposure to the sector; other listed companies tend to be small in terms of market capitalization and not very liquid. Leading generics producers, like OPV, are not listed. The main way to participate in the pharma growth story here is through private equity. Notably, Navis Capital recently invested in leading local pharma player OPV.

Dylan Waller: Do you see Vietnam as an attractive medical tourism destination for customers from less developed frontier markets as well as customers from developed countries that are attracted to the lower costs of medical services in this country?

Anirban Lahiri: Not particularly. Vietnam is mainly a patient origin country for outbound medical tourism. Cambodia and Lao may be the only source countries from which we see some inbound medical tourism into Vietnam as the medical industry in these countries is much more undeveloped than Vietnam's. These medical travelers are from a lower income demographic and don't have the funds to receive treatment in Thailand, but have some savings and hence travel to receive treatment in Vietnamese government hospitals for cases that cannot be dealt with in their home countries.

However, there is an opportunity for Vietnam to position itself as a destination for patients from developed countries who are seeking cost savings for out-of-pocket discretionary medical procedures. Dentistry is an area where Vietnam is already attracting patients from Australia and New Zealand. Vietnam could start here and gradually move up the value chain into more sophisticated, higher-value treatments. However, this will take time as the country is starting from a low base in terms of quality and expertise. Over the medium term, the country will still be a net importer of medical services rather than an exporter.

Dylan Waller: Your business was termed the Agoda of medical tourism, and is a very creative approach to accessing the growth of medical tourism in Asia. How did you decide to develop this idea, and what are some of your areas of optimism for Medisetter moving forward?

Anirban Lahiri: I personally suffered a sports injury in Vietnam as an expat, which led to a range of complications and I was misdiagnosed locally even at the local expat-oriented clinics here in Vietnam. This started a long and painful journey that lasted 4.5 years and took me to five different countries to get my problem diagnosed and treated. During this difficult period, I realized that I had no way to compare medical treatment options across countries - I was relatively agnostic in terms of where to go as long as I found quality at a price point that was within my means (that ruled out the USA for obvious reasons!). But there was no way to compare options within a country, let alone comparing hospitals across countries either in terms of reputation, facilities or price. I found myself having to visit multiple hospital websites, spend time finding their contact details, writing emails - each would come back asking me to complete the same medical history form in different templates and formats. All this led to wasted time and effort as I felt the need to have a "one-stop-shop" solution for medical travelers where they could compare facilities across countries, read reviews from past patients, submit inquiries and make bookings all in one place through one streamlined platform. And better still, a platform that was curated to only include top-notch hospitals and clinics so that I knew I was already looking at a filtered universe of options. Hence the idea to create - an Agoda + TripAdvisor (NASDAQ:TRIP) of medical travel. We currently have a network of 60 partner hospitals across five medical hub countries with each hospital having been carefully selected based on reputation, facilities, educational background and experience of their doctors and their quality accreditations (nearly 20 of our partners are accredited by the prestigious Joint Commission International of the US). To stay true to our philosophy of giving more power to the patients and democratizing access to world-class healthcare, our medical booking service is completely free to use.

Since a medical trip has several moving parts, we then decided to add another layer of convenience to patients by developing a full-service proposition. Prospective medical travelers can not only book their medical appointments with us but can also book accommodation at one of our partner hotels/serviced apartments, hire Medibuddy interpreters in the destination country to help them communicate with the hospital staff and to translate their medical reports from their native language into English and vice-versa.

We have several other exciting additions in the pipeline, including telemedicine and subscription-based services for patients that will help us scale patient volumes as we seek to build recurring engagement with customers.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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