ASEAN health care providers: hospitals

In the health care services segment (hospitals), there are different categories of investors (hospital and non-hospital entities) (table 3.10).

Table 3.10. Foreign investors in hospitals in ASEAN

Types of investors ASEAN Non-ASEAN

Hospital MNEs (Health care service providers)

• Large private hospital groups: e.g. IHH Healthcare and KPJ (Malaysia), Raffl es Hospitals (Singapore), BDMS (Thailand)

• Small private hospital groups e.g Clearbridge Health (Singapore)

• Conglomerates: Metro Pacifi c Investments (Philippines), Sime Darby (Malaysia)

• Private hospital groups: Ramsay (Australia), Sunrise Japan Hospital

Non-hospital MNEs

• Sovereign wealth funds: Khazanah (Malaysia), Temasek (Singapore)

• PEs and VCs: Quadria Capital (Singapore), TE Asia Healthcare (Singapore), Vertex (Singapore), Navis Capital (Malaysia)

• Large companies and conglomerates: Mitsui, Sojitz, Itochu, Sekisui Chemical (all Japan)

• PEs and VCs: Columbia (United States), KKR (United States), Capital Medica (Japan) Source: ASEAN Investment Report 2019 research.

Many of the major private hospitals in Indonesia, Malaysia, Singapore and Thailand are members of large hospital groups. They have investments in hospitals in other ASEAN Member States (table 3.11). The Lippo Group (Indonesia) through Siloam International Hospitals (Indonesia) and OUELH (Singapore) has hospital investments in Indonesia and Myanmar; IHH Healthcare (Malaysia) (owner of the Pantai, Parkway and Gleneagles hospital chains) has hospital facilities in Brunei Darussalam, Malaysia and Singapore; Raffles Hospital (Singapore) has operations in Cambodia, Indonesia, Singapore and Viet Nam; and Bangkok Dusit Medical Services (BDMS, with an extensive hospital network in Thailand) is a care service provider in Cambodia, the Lao People’s Democratic Republic and Myanmar (section 3.6.1). Other health care providers include Health Management International (Singapore), which owns Mahkota and Regency hospitals in Malaysia; KPJ Healthcare (Malaysia) (an integrated health care service provider) has operations in Malaysia, Indonesia and Thailand; and Thomson Medical Group (Singapore) has medical centres in Malaysia and health services in Indonesia.

Some ASEAN hospitals continue to look for investment opportunities in the region. Samitivej Hospital, a member of BDMS, plans to further expand to the neighbouring countries (e.g. Cambodia, the Lao People’s Democratic Republic, Myanmar and Viet Nam). It has a joint venture with Parami Hospital in Myanmar, which established Samitivej International Clinic at Parami’s medical complex in 2014. It opened a stand-alone medical clinic in Myanmar, through a joint venture, in 2016 to serve expatriates and the local population. Thonburi Healthcare Group (Thailand), through a joint venture, opened the $100 million 200-bed Aryu International Hospital in Yangon in 2019.

The CLMV countries have witnessed more FDI activity in hospitals and clinics in recent years, reflecting the improving investment environment and attraction of these countries. Emerging opportunities to establish hospitals and clinics are driving ASEAN hospitals (and foreign interests) to invest in these countries (table 3.12).

Equity investments

Some ASEAN hospital groups operate integrated businesses that involved other segments of the health care value chain (e.g. insurance, pharmaceuticals distribution and manufacturing).

Some have established investment companies or holding companies abroad (e.g. in Singapore) with the purpose to undertake investment in hospitals and other health care activities in the region – adding to the complexity of their corporate structure (box 3.2). Large hospital groups, especially those with Joint Commission International (JCI) accreditation for health care service quality, have also established representative offices in target host countries to facilitate medical tourism.

Table 3.11. Top 15 major hospitals and health care providers in ASEAN, by assets, 2018

Company Headquarters

Total assets^a

(Millions of dollars) Presence in other ASEAN countries

IHH Healthcare Malaysia 9,584 Brunei Darussalam, Indonesia, Singapore, Myanmar

(under development), Viet Nam

Bangkok Dusit Medical Services Thailand 3,765 Cambodia, Lao People’s Democratic Republic, Myanmar, Singapore

KPJ Healthcare Malaysia 1,042 Indonesia, Thailand

Raffl es Medical Group Singapore 753 Indonesia, Cambodia, Viet Nam

Bumrungrad Hospital Thailand 721 Myanmar

Siloam International Hospitals Indonesia 559 Myanmar

Thonburi Healthcare Thailand 550 Myanmar

Bangkok Chain Hospital Thailand 389 Lao People’s Democratic Republic

Thomson Medical Group Singapore 180 Indonesia, Malaysia, Viet Nam

Q&M Dental Group Singapore 165 Malaysia

Cordlife Group Singapore 144 Indonesia, Malaysia, Philippines, Thailand

Singapore Medical Group Singapore 125 Indonesia

Health Management International Singapore 97 Indonesia, Malaysia

ISEC Healthcare Singapore 54 Myanmar, Malaysia

Clearbridge Health Singapore 51 Indonesia, Malaysia, Philippines

Sources: Bloomberg and Orbis.

a Based on 2017 values.

Table 3.12.ASEAN health care service providers in CLMV countries (Selected cases) InvestorHeadquartersHospitalHost countryEquity ownership (%)YearRemarks OUELHSingapore

Yoma Siloam Hospital Pun Hlaing LimitedMyanmar402019 Investor is part of the Indonesian Lippo conglomerate.Pun Hlaing International Hospital LimitedMyanmar352019 Thomson Medical GroupSingaporeHanh Phuc International HospitalViet NamMedical collaboration2011

Investor helps co-develop operational procedures and policies for nurses and non-medical departments of the hospital. Singapore Medical GroupSingaporeCare Plus Clinic Vietnam (CCVN)Ho Chi Minh City47 (in CityClinic Asia Investment (CCAI))2017

Investor provides training to hospital in marketing. CCAI has a 100% foreign investor license for health care operations in Viet Nam. Wattana Medical GroupThailandAlliance International Medical Center (AIMC)Vientiane, Lao People’s Democratic Republic..2011AIMC is a joint venture between New Chip Xeng Group of Lao PDR and Wattana Medical Group. Bangkok Chain HospitalThailandKasemrad International Hospital VientianeVientiane, People’s Democratic Republic762017Joint venture with a Lao investor to establish the hospital Singapore National Eye Center and Singapore National University Hospital

SingaporeFV Hospital (in Hanoi and Saigon Clinic)Viet Nam....Collaboration between the hospitals Navis CapitalMalaysiaHanoi French Hospital (L’hopital Francais de Hanoi)Viet NamInvestment2016Investor owns the hospital. AJT HoldingsSingaporeSingapore Medical CenterCambodiaPartnership: AJT manages the center2018.. Sources: Media and company websites.

Box 3.2. Key features and characteristics of ASEAN hospital groups

The large hospital groups in ASEAN have similar features and corporate arrangements. Some of these features and characteristics include complex structures and multiple subsidiaries, and international partnerships and affiliations.

Complex structure and multiple subsidiaries

Some homegrown ASEAN hospital chains operate different health care brands that help them to target different segments of the market, both at home and abroad. For example, BDMS, the largest medical group in Thailand, has 45 hospitals and medical entities there as well as two in Cambodia (section 3.6.1). It has six hospital brands: Bangkok Hospitals (21 hospitals), Samitivej Hospitals (6), BNH Hospitals (1), Phyathai Hospitals (5), Paolo Hospitals (6) and The Royal Hospitals (2).

The two Royal Hospitals are in Cambodia. BDMS is looking at other neighbouring countries for future expansion.

The IHH Healthcare (Malaysia) consists of a network of hospitals and a few major brands (e.g. Mount Elizabeth, Gleneagles, Pantai, Parkway and Fortis). The two Mount Elizabeth hospitals in Singapore attract many medical tourists. The Parkway Pantai group of hospitals is mostly in Malaysia and Singapore. It has also acquired a significant stake in Fortis, which has hospitals network in India.

Siloam International Hospitals, under the Lippo Group (Indonesia), has hospitals in the country under the Siloam brand. The group has a health care presence in Singapore through OUE Lippo Healthcare, and through joint ventures it owns and operates hospitals in Myanmar.

Integrated business and investment holding

ASEAN hospital groups also operate integrated businesses involving distribution and manufacturing of pharmaceuticals as well as health insurance businesses. For instance, BDMS’s health care portfolio includes international pharmaceuticals business (manufacturing of sterile and generic pharmaceutical products and distribution), drugstores (retailing), medical devices and equipment, pathology services and health insurance.

International partnerships and affiliations

The major ASEAN hospital groups also have strategic investment interests with foreign partners.

They have established alliances and partnership with major MNEs to supply pharmaceuticals, equipment and medical solutions. Some have also established knowledge collaboration in R&D activities, training and education. For instance, BDMS (Thailand) has partnerships with specialized medical centres and colleges in Japan, the United States, and Europe; Raffles Hospital (Singapore) is affiliated with the United States-based Mayo Clinic Care Network; Maayo Medical (Philippines) has Ottobock (a German medical technology company) as one of its partners; PT Siloam International (Indonesia) signed an agreement in 2017 with Philips (Netherlands) to supply, maintain and service health care technology and equipment in all of Siloam’s hospitals in Indonesia.

These partnerships and affiliations are pursued for a number of reasons: (i) funding resources for expansion, (ii) access to markets, (iii) access to modern technology and specialized expertise or skills, (iv) patient referrals and (v) accreditation and recognition.

Source: ASEAN Investment Report 2019 research.

In some cases, major local hospitals also involve foreign or strategic partners in their hospital operations. Examples include Ramsay (Australia) with Sime Darby Health Care (Malaysia) and the equity stake of Mitsui (Japan) in IHH Healthcare (Malaysia). Foreign health care institutions also get involved with ASEAN hospitals through collaboration and strategic partnership in knowledge sharing, technological development, R&D and capacity-building. In this way, they contribute to the development of the health care industry in the region and connect with private health care providers in ASEAN.

Aside from hospital groups, some ASEAN health care companies have also opened medical clinics and laboratories in other ASEAN Member States. They include Q and M Dental Group (Singapore) for dental care, Cordlife (Singapore) for health and allied services and Clearbridge Health (Singapore) in medical laboratory. Singapore Medical Group invested in Careplus Clinic Vietnam (a health care specialist services provider that focuses on health screening, women’s health, pediatrics and diagnostic imaging).

Not all major hospital groups expand to other ASEAN Member States. Those from a home country with a large domestic market (e.g. Indonesia, the Philippines) have a limited overseas presence because they have chosen to focus on expansion at home. PT Mitra Keluarga Karyasehat (Indonesia), with 19 hospitals, and Metro Pacific Hospital Holdings (Philippines), with 14, do not invest outside the country.

In contrast, hospital groups from Malaysia and Singapore have investments outside their home countries because of the limited market at home and as part of their business strategy to operate close to patients abroad. Some Thai hospital groups also established hospital facilities in the CLMV countries to serve patients there.

Non-equity participation

ASEAN hospital groups have foreign involvement in their hospital business through collaboration on hospital development, medical knowledge and technology issues. For instance, a network of hospitals owned by the VinGroup Corporation (Viet Nam) has foreign collaborations in oncology, cardiology, organ transplantation and hospital management.

Foreign collaborators include UPMC Healthcare Group and GE Healthcare (both from the United States), Sanno Hospital and International University of Health and Welfare (both from Japan) and other foreign collaborators based in France, the Republic of Korea and Singapore. Similarly, hospitals from Singapore collaborate and support the establishment of hospitals in Viet Nam; for example, Thomson Medical supported the establishment of Hanh Phuc International Hospital (Viet Nam). Thomson Medical co-developed hospital operational procedures and policies for nurses at the Vietnamese hospital. AJT Holdings (Singapore) manages the Singapore Medical Center in Cambodia under a partnership agreement with the owners. Other health institutions from European countries, Japan and the United States collaborate with ASEAN hospitals in R&D, in training and in sharing medical knowledge and experiences (section 3.4.2).

Mode of expansion

ASEAN hospital groups have expanded abroad through a combination of acquisitions, greenfield investments, joint ventures and strategic collaboration. For example, IHH Healthcare (Malaysia) in its early years expanded its home-country hospital network through the acquisition of local and foreign-owned hospitals in Malaysia and abroad. It also built new facilities, such as the Mount Elizabeth Novena Hospital and Specialist Centre in Singapore.

Where opportunities for M&As are limited, ASEAN hospital groups have built new hospitals in host countries. BDMS (Thailand) built two Royal Hospitals in Cambodia. Wattana Medical Group (Thailand), through a joint venture, established the Alliance International Medical Center in the Lao People’s Democratic Republic. Bangkok Chain Hospital and a Lao investor entered into a joint venture to build the $70 million, 254-bed Kasemrad International Hospital Vientiane, which will open in 2020.¹⁴ Joint-venture arrangements with local partners are frequently used where local knowledge or networks of local partners are important and regulatory frameworks are continuously improving, such as in the CLMV countries. Samitivej Hospital, a subsidiary of BDMS (Thailand), expanded in Myanmar through a joint venture.¹⁵ KPJ Healthcare (Malaysia) has a joint-venture hospital in Bangkok and IHH (Malaysia) is building a hospital in Myanmar.

Several Singaporean health care groups have invested in the CLMV countries through joint ventures with local partners or other health care-related companies that already have operations in these economies. Singapore Medical Group in 2017 made a strategic investment in Viet Nam through an investment and management consultancy services arm (CityClinic Asia Investments).

Its wholly owned subsidiary, CityClinic Vietnam, operates CarePlus Clinic Vietnam. Raffles Medical Group formed a joint venture with Singapore-registered AEA International Holdings, which operates the International SOS clinics in a few ASEAN Member States.

Expansion through vertical integration

Some hospital groups have also evolved to become more integrated through providing other health care services such as pathology and diagnostic laboratories, pharmacy, and manufacturing of pharmaceuticals and nutrition-based products. Raffles Medical (Singapore) operates medical facilities in 13 cities in Cambodia, Singapore and Viet Nam, as well as in China and Japan. It also operates medical laboratories, dental clinics, imaging centres and management consultancies. Raffles clinics in and outside Singapore have their own pharmacies, which sell its own manufactured health care products and those of other companies.¹⁶

KPJ Healthcare (Malaysia) has hospitals in Indonesia, Malaysia and Thailand. In Malaysia, it has a network of clinics, assisted-living care facilities, health care universities and colleges, laboratories and diagnostics chains, and healthy meals facilities.¹⁷

Non-hospital investors

Conglomerates and non-health care MNEs (e.g. banks, large Japanese trading companies) also invest in hospitals in ASEAN. Private equity companies seeking returns on investment have

equity stakes in or own hospitals in different ASEAN Member States. These PE companies operating in the region and with investment in hospitals include Columbia (United States), Quadria Capital (Singapore), Navis Capital (Malaysia) and TE Asia Healthcare (Singapore).

Bowsprit Capital (Singapore) acquired two hospitals in Indonesia in 2017.