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Cross-Region Seed Map #β Medical Service Accessibility

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Quality of Health Leads to Quality of Life

From the vibrant streets of metropolitan cities to the serene outskirts of remote villages, the pursuit of a better quality of life is ever-present. It’s a story written in the corridors of hospitals, in the queues outside pharmacies, and in the precious moments saved by timely medical interventions. The protagonists of this narrative are the doctors, the healthcare workers, and the innovative startups striving to bridge the gaps in a system fraught with challenges. As a cross-region VC, we find ourselves at a unique vantage point, peering into the intricate weave of healthcare across Japan, Indonesia, Vietnam, and India. Here, amidst the statistics and infrastructure, lie the opportunities to rewrite this story, to invest in solutions that enhance the lives of millions. Why don’t you read the first-ever article in this blog series related to Health Insurance alongside this one for a more comprehensive understanding?

Japan, as a highly developed nation with a robust healthcare system, provides a useful benchmark. With 2.5 doctors per 1,000 people and 1.2 specialist doctors, the country ensures that medical professionals are readily available to its citizens. Japan’s advanced medical facilities are also significantly higher, with 3.97 per million people, and the average time to receive medical services is just 30 minutes. This efficiency and accessibility underscore the high quality of life in Japan and offer a model for what can be achieved with comprehensive healthcare infrastructure and adequate resources.

A Severe Gap in Demand and Supply

Indonesia’s healthcare landscape presents both challenges and opportunities. With only 0.4 doctors per 1,000 people and 0.1 specialist doctors, there is a severe shortage of medical professionals. The number of advanced medical facilities is also low at 0.55 per million people. These factors contribute to an average wait time of 90 minutes to receive medical services, highlighting a critical gap in healthcare access. This situation opens up significant opportunities for telemedicine and mobile health platforms, which could bridge the gap in doctor availability, especially in rural areas where the urban-rural doctor ratio is 2:1. Startups focusing on telehealth solutions can capitalize on the high penetration of mobile phones and internet connectivity, offering remote consultations and follow-ups.

Vietnam shows a slightly better scenario with 0.8 doctors and 0.3 specialist doctors per 1,000 people. The country has 1.03 advanced medical facilities per million people, and the average wait time to receive medical services is 60 minutes. However, there is still a significant urban-rural disparity with a 2:1 doctor ratio. Healthtech startups can seize the opportunity by developing integrated healthcare platforms that streamline patient management and connect patients with healthcare providers. Additionally, investment in building advanced medical facilities in rural areas could help reduce the urban-rural divide and improve healthcare outcomes.

India faces significant challenges with 0.8 doctors and 0.4 specialist doctors per 1,000 people. The country has only 0.50 advanced medical facilities per million people, and the average wait time to receive medical services is the longest at 120 minutes. The urban-rural doctor ratio is particularly alarming at 4:1, indicating a severe shortage of healthcare professionals in rural areas. Startups can explore innovative models such as mobile clinics and community health workers to extend healthcare services to underserved areas. Additionally, leveraging AI and machine learning for diagnostics and treatment planning can enhance the efficiency and reach of healthcare services.

Deadly Duo: Doctor Shortage and Infrastructure Deficiency

India’s healthcare landscape presents some staggering challenges, with an average time to receive medical services reaching 120 minutes. This astonishing figure highlights a critical issue in healthcare accessibility. Several factors contribute to this extended wait time, including a severe urban-rural doctor disparity, inadequate transportation infrastructure, and urban traffic congestion.

In rural areas, the urban-rural doctor ratio stands at an alarming 4:1, meaning that rural populations are significantly underserved. This shortage is compounded by the lack of advanced medical facilities, which are predominantly located in urban centers. The poor state of road and air transport infrastructure further exacerbates the problem, making it difficult for patients in remote areas to access timely medical care. Even within cities, traffic congestion can turn what should be a short trip to a healthcare facility into a lengthy ordeal.

Given these challenges, telemedicine has emerged as a critical solution to bridge the gap in healthcare accessibility. Platforms like Practo and 1mg have seen rapid growth, leveraging technology to provide remote consultations and prescription services. These startups enable patients to receive medical advice and obtain medications without the need to travel long distances.

Similarly, the e-commerce sale of pharmaceuticals is on the rise, offering a convenient solution for patients to access medications. Companies like PharmEasy and Netmeds are leading the charge, providing a comprehensive range of healthcare products delivered directly to consumers’ doors. These platforms not only offer convenience but also ensure that essential medicines are accessible to even the most remote areas.

Additionally, the rise of domestic medical tourism is another significant trend. With the uneven distribution of healthcare resources, many patients from rural and less-developed areas are traveling to urban centers to receive advanced medical treatments. This intra-country movement highlights the critical need for better healthcare infrastructure in rural areas but also presents opportunities for startups to facilitate these journeys. Services that offer streamlined travel and accommodation for patients and their families, along with coordination of medical appointments, can significantly ease the burden on these individuals and improve their healthcare experience.

These startups exemplify the innovative approaches being taken to address the deadly duo of doctor shortage and infrastructure deficiency in India. By harnessing the power of technology, they are transforming the healthcare landscape, making quality healthcare more accessible and efficient for millions.

One of the factors as important as the situation surrounding doctors and hospitals is the distribution of pharmaceuticals. Please take a look at the table below:

Pharma-Country: India

India’s pharmaceutical sector is a cornerstone of its healthcare ecosystem, offering substantial opportunities for startups and investors. With 80% penetration of generic medicines, India leads in making healthcare affordable (we, people in India can buy the most of medicines at the online marketplace, surprisingly). This high penetration rate presents a fertile ground for startups focused on developing and distributing generic drugs. The strong domestic production (80% domestic-import ratio) indicates a well-established pharmaceutical infrastructure. Startups can tap into this by innovating in drug manufacturing, distribution, and developing new therapeutic solutions.

Besides that, India is the most pharmacy-dense country in the four. In the 1.4 billion country, the widespread availability of pharmacies plays a crucial role in supplementing the healthcare system, especially in light of the doctor shortage. Pharmacies often act as the first point of contact for many people seeking medical advice and services. Pharmacists provide essential healthcare services, including dispensing medications, offering over-the-counter treatments, and giving health advice for minor ailments. This accessibility helps to alleviate some of the burden on the overextended healthcare system, making pharmacies an integral part of the healthcare landscape in India. There’s definitely something promising in this area.

In contrast, Vietnam has the less number of pharmacies and a lower penetration of generic medicines, around 50%. This suggests that there is significant room for growth in Vietnam’s generic drug market. The lower domestic production rate and higher reliance on imports (60% import ratio) further highlight the potential for developing local manufacturing capabilities. Startups in Vietnam can capitalize on this opportunity by focusing on producing affordable generic medicines locally, which can reduce costs and improve accessibility. By addressing these gaps, Vietnam could emulate the success of India’s generic drug market, thereby enhancing healthcare affordability and resilience in its pharmaceutical supply chain.

As economic growth spurs urbanization, the landscape of pharmaceutical retail in the emerging countries is poised for transformation. The expansion of urban areas with high population density creates a fertile ground for the growth of chain pharmacies. Let’s take the lowest in the four as an example. Currently, the market share of chain pharmacies in India is only 8.5%, a stark contrast to Japan’s 30% share in its highly urbanized environment. This indicates significant growth potential for chain pharmacies in India as urbanization continues.

One promising avenue in my mind is the roll-up of mom-and-pop pharmacies into tech-enabled chain pharmacies. Startups that can leverage economies of scale through such consolidations will be well-positioned to revolutionize the pharmaceutical retail sector. By integrating technology into operations, these startups can optimize inventory management, enhance operational efficiencies, and improve delivery services. In our view, this approach may offer a great opportunity besides the frequently-seen model of online wholesale marketplaces that primarily support the highly fragmented mom-and-pop pharmacies. We have seen the great tractions at BuyMed, one of our most notable portfolio companies in Vietnam of a successful wholesale marketplace that supports mom-and-pop pharmacies, by the way. But I believe tech-oriented, emerging chain pharmacies that could be rolling up mom-and-pop pharmacies have equal or even greater potential in the country like India.

In this evolving landscape, startups that can build robust, tech-enabled pharmacy chains from scratch stand to gain significantly. They can offer a seamless and efficient customer experience, ensuring better inventory control and faster delivery times. This model not only caters to the increasing urban population but also has the potential to penetrate rural markets, thus bridging the gap in healthcare access across India.

Let me wrap up here for now. The up-to-date article will come out in the not-so-distant future. Stay tuned!

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