VIETNAM HEALTHCARE MARKET

Major Vietnam Healthcare Market Drivers

The demographic shifts and societal changes across Vietnam, such as an aging population, the increase in disposable income of the middle class, and a growing burden of chronic syndromes, are significantly leading the Vietnam healthcare market. These trends are propelling an increased demand for long-term care services. In addition, the rising admittance of middle-class comforts is leading to a higher need for different health options, while simultaneously propelling more sedentary lifestyles, which are probably rising the diabetes, obesity, and several other costly chronic health conditions. 

Healthcare costs across Vietnam are more affordable compared to other countries, improving accessibility for the general population. Different community-based services, including hygiene, maternal care, immunizations, and childcare, are offered free of charge or at minimal cost. This approach is designed to guarantee equitable access to primary healthcare services for all individuals, irrespective of their income level. Alongside providing essential patient-centered healthcare, the government prioritizes health promotion and disease prevention efforts. These include campaigns concentrated on increasing public awareness and knowledge regarding important health and well-being issues, including tobacco smoking cessation. AIDS/HIV prevention through pre-and post-exposure prophylaxis and motivating preventive sexual practices. Both the government and private investors have made investments in healthcare infrastructure, focused on advancing accessibility. This spending includes the construction of new hospitals and clinics, coupled with expanding healthcare coverage to remote and rural places. Thereby, healthcare services are readily accessible throughout the country, with most of the population residing within a less-traveling distance from a primary healthcare facility.

The health service industry reforms implemented across Vietnam throughout the 1990s granted hospitals a level of autonomy to charge fees, laying the groundwork for the emergence of the private sector. Fast-forwarding a quarter of a century to the present day, the rising preference for private healthcare mirrors the growing need for high-quality medical services. 

Private healthcare providers in Vietnam are increasingly offering customized care like that found in developed nations. This includes extended consultation times, effective diagnostic services, a prompt surgical process using state-of-the-art medical equipment, and an expanding variety of mental health coverage. However, it is unsurprising that accessibility and affordability are not evenly distributed across the country. People with lower incomes or those living in rural locations are often underrepresented in private healthcare utilization. Most private patients are normally white-collar professionals who have the means to afford private health insurance. Despite this, the development of private healthcare options should be seen as a positive development, propelling improvements in national healthcare standards and lessening pressure on public hospitals. However, it’s seen that the societal impact will be greater once advancements in healthcare delivery and management from the private sector are more rapidly integrated into the public healthcare system.

Vietnam’s healthcare sector is primarily dominated by public healthcare organizations. However, with public institutions facing overburdening and limited government funding, the private healthcare sector is increasingly garnering attention. To support its advancement, the government is offering different investment incentives for private healthcare providers. These incentives include a 4-year tax exemption and a 50% tax reduction for the following 9 years for newly set-up healthcare providers.

The increase in private hospitals has been substantial during recent years. Between 2004 and 2022, the number of private hospitals increased from 40 to 318, coupled with the establishment of thousands of new health clinics. Despite this growth, most private hospitals remain concentrated in major urban centers including Da Nang, Ho Chi Minh City, and Hanoi. Moreover, many private healthcare services cater primarily to the high-end market, targeting both locals and foreigners with high incomes. Also, private healthcare providers in major cities play a significant role in outpatient care, accounting for more than 30% of such services, despite representing approximately 6% of inpatient care, as per Viettonkin Consulting. These providers offer a variety of common services, including diagnostic service, dental care, examination, and imaging services.