Healthcare demand in Asia is growing, driven by an underinsured middle class and ageing population. 

By Nic Nicandrou, Chief Executive, Prudential Corporation Asia

Demand and consumption of healthcare goods and services in Asia is on the rise – and footing the cost of medical coverage is a challenge for individuals as well as governments in the region.

In the markets where Prudential operates, consumption of healthcare goods and services were estimated to have reached US$941 billion in 2017, having risen at a double-digit compound rate the previous five years.1 Some 42% of this spend, roughly equivalent to US$400 billion, is settled out-of-pocket.2

What’s driving the demand? It’s a combination of several factors.

One of these is the upsurge in chronic diseases, somewhat abetted by more sedentary lifestyles. Ailments like heart disease, cancer, and diabetes are expected to occur more in emerging markets. At a count of 216 million people, Asia has 47% of the world’s diagnosed diabetics today.

Rising affluence and longer life expectancy are also behind the unprecedented demand for healthcare. By 2030, Asia will account for two-thirds of the global middle-class population – a point where individuals start to consider protecting their health with insurance.

Of the projected 1 billion new entrants to the middle class, 350 million will be in China, 380 million in India, and 210 million elsewhere in Asia, compared to just 130 million for the rest of the world.3 At the same time, we will see a near three-fold increase in the number of people who are over 65 years old, to around 700 million Asians by 2050.4 The fact that the ratio of workers to retirees will be around 3:1, is a major area of focus for many governments in this region.

With medical consumption expected to rise faster than economic growth across Asia, the burden on the public purse is set to increase. Across the board, authorities are forecasting significant shortages in medical resources. The solution to this challenge requires close cooperation between governments and private enterprise.

Insurers have a role to play in helping the younger, rising middle class to grow their wealth, and to protect their health and that of their families. At the same time, they can also support the older population as they seek to live longer and healthier, and are financially prepared for any health crises that may arise.

Today’s current service model for insurers is principally focused on paying for clinical care. Yet 90% of the drivers of healthcare consumption are genetic, lifestyle, and environment related. Insurers therefore have to evolve from being pure providers of insurance, to partnering with customers on wellness, guiding them on how to improve or preserve their health, as well as supporting their treatment and recovery from adverse health events. To do this, new and innovative thinking is needed.

The obvious next question is how? At Prudential, we see health tech as key to delivering on our vision of making healthcare affordable and accessible for all.

That’s why we recently launched Pulse by Prudential, an all-in-one app for health and wellness management. Pulse is live in eight markets across Asia and has seen more than 5.8 million downloads. Powered by Artificial Intelligence, Pulse offers users a range of health services including a symptom checker, digital twin, online doctor calls and prescription ordering.

Pulse’s offerings continue to evolve, empowering users to manage their own health at any stage in life.

1 Asia: only includes markets where Prudential has life operations ex-Taiwan; 2013-2017 WHO and HKSAR Government; 2016-2017 estimated by PRU; Definition of Current Health Expenditure: Final consumption of health care goods and services including personal health care (curative care, rehabilitative care, long-term care, ancillary services and medical goods) and collective services (prevention and public health services as well as health administration), but excluding spending on investments

2 World Health Organisation: Global Health Observatory data repository (2013). Out of pocket as % of Total Health Expenditure. Asia calculated as average out of pocket.

3 Brookings Institution. Global Economy & Development Working Paper 100. February 2017.

4 United Nations, Department of Economic and Social Affairs, Population Division (2015). World Population Prospects: The 2015 Revision, DVD Edition 15.

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