This will result in the ‘health protection gap’ in the Asia-Pacific region reaching $197bn in 2020, with the biggest gaps in China, India, Japan and South Korea, the ‘Health Protection Gap: Asia-Pacific 2012’ report identified.
The health protection gap is defined in the study as the difference between the level of healthcare costs which would be required to meet consumer needs, versus the amount that would be available to cover those costs, if society’s total healthcare expenditure remained a constant percentage of GDP.
David Alexander, head of business development Asia, Swiss Re, said: "The wide range in health protection gaps across Asia-Pacific is partly due to the differences in the size of both the population and the economy from market to market. To filter out this factor, we also computed the gap per capita.
“Even in the more developed economies, which are perceived to have more mature insurance markets, the health protection gap per capita can be substantial, which is at least partly explained by the demand for higher quantity and quality of health and medical services.”
In 2010, more than half of the regional governments had to bear over 40% of the total healthcare expenditure, with Japan covering the highest proportion (83%). The other main funding source was out-of-pocket expenses, which ranged from a low of 14% (Thailand) to 61% (India) of total healthcare expenditure.
Private prepaid plans contributed less than 10% of the total healthcare expenditure for all the markets covered in the report, with the exception of Taiwan which came in at 19%.
These figures are based on projections of economic growth, medical inflation and population growth in the 13 Asia-Pacific markets covered. However, the study further states that there will be faster growth in emerging markets, which currently have lower healthcare expenditure as a percentage of GDP.
Based on Swiss Re’s projections, the average real GDP growth rate from 2014 to 2020 for Asia-Pacific will be about 5%.
"People and countries tend to spend more on health and medical as they get wealthier. With economic growth in Asia-Pacific, especially in emerging markets, rising household income will lead to higher spending on health and medical care," said Clarence Wong, head of economic research & consulting, Asia-Pacific, Swiss Re.
Health protection gap projections in Asia-Pacific: Swiss Re
2011 2020
$bn $bn
- China 3.2 73.0
- India 2.2 43.6
- Japan 1.4 28.7
- South Korea 0.4 16.7
- Australia 0.2 8.2
- Indonesia 0.1 8.0
- Thailand 0.5 6.5
- Malaysia 0.1 4.1
- Taiwan 0.3 3.2
- Philippines 0.1 2.5
- Vietnam 0.1 1.3
- Hong Kong 0.3 1.1
- Singapore 0.1 0.6
- Total 9.0 197.4
