VietNamNet
Bridge - The total spending on
healthcare services by the Vietnamese people accounts for 5.8 percent of GDP,
the highest level in ASEAN countries.
After a
period of interruption, the movement of injecting money into hospital projects
has heated up again.
The Hoan
My Medical Group has recently taken over the Vinh International Hospital in
Nghe An province, raising its total number of hospitals to seven.
In 2015,
Hoan My acquired 70 percent of stake of the Dong Nai International Hospital.
Meanwhile, it is now eyeing some state-owned hospitals in Da Nang and HCM City.
Cotec
Group, a real estate developer, has also jumped into the healthcare sector by
setting up Cotec Healthcare Holdings, a subsidiary in charge of making
investment in hospitals.
In late
2015, Cotec Healthcare Holdings started implementing the VND1.3 trillion
project on expanding the Binh Dinh General Hospital under the mode of private
public partnership (PPP). Cotec has announced a plan to develop a chain of
general hospitals throughout the country.
Vingroup,
another real estate developer, also has invested in the healthcare sector with
Vinmec system.
Meanwhile,
many foreign investors, including Thai Bumrungrad Hospital and Indonesian Lippo
Group, have expressed their intention to develop hospital chains in Vietnam.
Most
recently, VOF, an investment fund managed by VinaCapital, has acquired 75
percent of the Thai Hoa International Hospital in Dong Thap province. Sources
said VOF has injected $10 million into the hospital.
According
to Dang Pham Minh Loan from VOF, the investment duration may last 3-5 years,
while the capital may be higher to fund the hospital expansion plan.
VOF
believes that the potential of Thai Hoa is significant because the government
has set up the PPP mechanism for hospital development, while the new policies
on health insurance are believed to bring big sources of revenue to private
hospitals.
VOF once
succeeded with a similar deal of making investment in Hoan My.
In 2009,
VOF, together with Deustche Bank’s DWS Vietnam Fund, poured $10 million in Hoan
My hospital chain. Three years later, the fund withdrew capital from Hoan My
and earned $25 million.
An
analyst commented that investors now see the healthcare sector a ‘gold mine’
because of the Vietnamese increasingly high expenditure on healthcare services.
The
figure may reach $24 billion by 2020 thanks to the government initiated
healthcare service socialization program being implemented.
State-owned
hospitals still dominate the healthcare service sector. By 2014, Vietnam had
1,090 hospitals and 175 privately run hospitals.
Investors
have been warned that though Vietnam proves to be a very promising market, they
would still face big challenges, especially because the average spending on
healthcare per capita is lower than that in Thailand, Malaysia and Singapore.
NCDT
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