September 08, 2010 10:08 ET

Healthcare Growth in Emerging Markets Driven by Awareness, Affordability and Access

ROCKVILLE, MD--(Marketwire - September 8, 2010) - has announced the addition of GBI Research's new report "The Healthcare System and Delivery Network in Emerging Economies (China, India and Brazil) - Growth Opportunities Driven by Awareness, Affordability and Access" to their collection of Healthcare market reports. For more information, visit

According to the 2010 world development indicators by the World Bank, China, India and Brazil are respectively ranked the 2nd, 4th and 9th largest economies in the world in terms of GDP based on Purchasing Power Parity (PPP). Each of the three countries spends 4.7% (China), 5% (India) and 8% (Brazil) of its GDP on healthcare. GBI Research notes that, although healthcare expenditure as a percentage of GDP has been increasing consistently, there has not been a significant rise in the per capita health expenditure because of the high population growth in these countries.

The demographics of China, India and Brazil have undergone some fundamental changes such as the emergence of the 'middle class.' This middle class population has a high personal disposable income presenting it with greater purchasing power. According to the report, this will create significant demands for healthcare infrastructure and quality health services in India. In China, with the increase in disposable income, an increasing proportion of the middle class population is opting for private healthcare services offering better quality services. With about 190 million people, Brazil too has a fast emerging middle class population with over 30 million Brazilians joining the country's middle class population between 2003 and 2009. The emergence of this new middle class population with greater income and access to credit offers abundant potential for the healthcare system and delivery network in the country.

China plans to invest $124 billion in the healthcare sector by 2011 according to the healthcare reform plan passed in 2009. The money will be spent on building hospitals, improving rural infrastructure facilities and providing basic medical insurance to all the people. This has given rise to a thriving hospital construction market within China. The fact that 80% of the hospitals in China need to be rebuilt also strengthens the potential of this market, says GBI Research. The government is also encouraging Sino (China) - foreign joint ventures, privatization of public hospitals and the outsourcing of hospital management and logistic services to encourage growth in the hospital sector. Although the investment of foreign companies in Chinese hospitals is limited to 70%, there have been an increasing number of foreign investments seen in the hospital sector.

Corporate groups in India such as Reliance and the Aditya Birla Group are increasingly investing in the hospital sector. These hospitals provide general and specialized services at competitive prices enabling domestic as well as foreign patients to receive treatment. This has also led to the growth of medical tourism in India. The hospital sector is also attracting private equity and major venture capital funding. For example, ICICI, the largest equity firm in India, has created a $225m equity fund to invest in the development of hospital chains whilst a company called Global Healthcare investments and solutions has planned to invest part of its $500m equity fund in Indian tertiary care hospitals.

As Brazil prepares to host soccer's 2014 World Cup and the 2016 Olympic Games, its economy is experiencing a new surge. The events have driven new deals and contracts to attain international standards even in the healthcare sector. Although Brazil has a Unified Health System (UHS) which is supposed to provide healthcare to all its citizens, the private sector still accounts for about 58% of the overall health expenditure in the country. Also, about 75-80% of the hospitals providing services in Brazil are private. Rede O D'Or and Sao Luiz are two of the most prominent hospital chains in Brazil, while Sociedade Beneficente Israelita Brasileira Albert Einstein (SBIBAE) and Samaritan are other important hospitals, according to the report.

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