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Indonesia’s healthcare sector ripe for investments

Indonesia has emerged as an attractive healthcare market. The industry has surged by 300% since 2005, with national healthcare expenditure reaching USD26 billion in 2014. Recognizing the investment potential, the South East Asia (SEA) Hospital Expansion Summit 2015 gathered industry leaders and government officials to discuss opportunities and challenges in this sector.

Jeffrey Bahar, Deputy Chief Executive Officer of the Spire Research and Consulting group, was invited as a guest speaker at the South East Asia Hospital Expansion Summit 2015. In his presentation, Bahar gave a brief overview of Indonesia’s healthcare sector, focusing on investment prospects for private firms.

Bahar mentioned that in 2012, Indonesians spent around USD11.5 billion (yearly) for healthcare services abroad. Wealthy Indonesians still opt for medical treatment overseas to treat complicated conditions, preferring medical tourism destinations like India, Singapore, Malaysia and Thailand.

To promote a better distribution of hospitals across Indonesia’s many provinces and cities, the government has allowed a maximum of 67% foreign ownership for new investors. This, together with other liberalization measures, has excited the investor community.

Nonetheless, roadblocks remain. Low health expenditure (USD106.63), a shortage of doctors and medical professionals as well as an inequitable healthcare financing system – leading to unequal distribution of hospitals across geographic areas – continue to hold back the industry’s growth.

Bahar’s presentation deck on “Healthcare in Indonesia: Future Growth Opportunities” can be found here.


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