Asia's Health Ecosystems - New Models, Better Value

SINGAPORE, September 23, 2020 – Healthcare’s traditional “truths” are changing. With no certain end to COVID-19, the world now recognizes that disease crises, when not actively managed or contained, can quickly spiral to bring entire health systems and economies to their knees. At the same time, Asia has a staggering “medical trend rate (defined as the increase in per capita medical claims costs due to medical inflation, utilization pattern changes, and other factors such as government regulations)" of 10.4%, outpacing the general inflation rate in Asia of 2.5%. The spike in both demand and unit costs means the need to improve value is not only necessary, but urgent.

Kitty Lee, Partner and Head of Health and Life Sciences in Asia Pacific, Oliver Wyman, commented, “As countries continue battling the rise of chronic disease, the world has now come to a painful realization: infectious disease epidemics are no longer ‘black swan’ events. Furthermore, the ‘double whammy,’ where a health system must actively manage both non-communicable diseases (NCDs) and infectious diseases, is no longer only applicable to emerging countries.”

“And yet, many of the challenges to developing a sustainable healthcare system are not new,” added Khoo Ee Ping, Chief Corporate Development Officer, Sheares Healthcare. “How do we optimize the utilization of scarce healthcare services and manage ballooning costs? How do we achieve better alignment of incentives between payors and providers? How do we treat patients holistically in a way that addresses both their medical conditions and their lifestyle choices? While these challenges have been exacerbated by the current crisis, there are reasons to be hopeful as new models of care are emerging with the right support from payors and regulators.”

Oliver Wyman and Sheares Healthcare have collaborated to produce a three-part series as a guide for health ecosystem stakeholders, investors, and consumers, offering a glimpse into the future of healthcare in Asia, as we envision it. This future is a world with refreshed constructs of care, with three foundation blocks: an amplification of primary care, greater payer-provider collaboration and coordination, and a joint march towards value, as detailed below:

  • Amplified primary care – evolution of primary care as it shifts from today’s generalist model and amplifies into differentiated roles that will enable better value. Amplified primary care includes an expanded landscape of offerings such as urgent care clinical services, routine specialist care and diagnostics in a GP setting, and virtual/omni-care. For providers, an amplified primary care model frees up capacity and resources spent on low-acuity care provision and enables them to deliver better outcomes for patients. It will enable hospitals to deepen specialization and push the envelope for the treatment of more complex conditions and become focused, local centers of excellence. Amplified primary care will also improve costs and outcomes for payers. Primary care settings, both physical and virtual — tend to be more efficient and lower cost than hospitals. Many payers also see an opportunity to use primary care to extend their role into coordinating care, rather than just managing claims.
  • Next generation enablement – need for greater payor-provider coordination in Asia. There is an opportunity for today’s healthcare intermediaries such as third-party administrators (TPAs) and managed care providers (MCOs) to reposition themselves as enablement companies, offering differentiated functional capabilities and benefits from scale that support payers and/or providers in actively managing health. COVID-19 exposed the fragile balance between hospital utilization and capacity and the increased need to better allocate resources and minimize the unnecessary and excessive use of care. As primary care providers expand into more services including preventive care and low acuity care, payer-provider coordination can facilitate more active steerage of patients away from hospitals towards these channels. A “next-generation” evolution of Asia’s current intermediary market into a more active enablement role will help to balance access and utilization across sites of care. This shift requires both a focus and upgrade across capabilities such as utilization and claims management, network management, and data analytics.
  • March towards value – What are the ingredients for value-based care in this region? Value-based care (VBC) is an approach that aligns provider incentives with improving patient outcomes, resulting in risk-sharing and reduced overall costs to the system. While VBC is still an emerging paradigm in Asia, the rise of Universal Health Coverage (UHC), targeted interventions to select population cohorts, and capitation payment models are inevitable strides in the direction towards value. The shift from a fee-for-service model to other incentive types will have implications across the value chain, as based on adjusted patient flow and business models. While the shift to value has seen limited success across Asia Pacific, COVID-19 may shakeup the system. They key ingredients to enable a value-based world in Asia include creating targeted & holistic care models, aligning incentives, and implementing data collection and system-wide sharing. While this may seem a tremendous challenge, the region’s continued rising utilization and cost will likely force VBC as an inevitable solution, at least for some targeted populations.

Oliver Wyman and Sheares Healthcare are both committed to the dialogue on the future of healthcare and to exploring how shifts in demand and emerging technology and capabilities will create new opportunities for stakeholders to collaborate and participate in a broader and more effective health ecosystem in Asia.

For more information and to access the full series, please visit or you may contact Eva Tong.

Oliver Wyman is a global leader in management consulting. With offices in 60 cities across 31 countries, Oliver Wyman combines deep industry knowledge with specialized expertise in strategy, operations, risk management, and organization transformation. The firm has more than 5,000 professionals around the world who work with clients to optimize their business, improve their operations and risk profile, and accelerate their organizational performance to seize the most attractive opportunities. Oliver Wyman is a wholly owned subsidiary of Marsh & McLennan Companies [NYSE: MMC]. For more information, visit Follow Oliver Wyman on Twitter @OliverWyman.

Sheares Healthcare Group invests in and provides healthcare delivery services in Asia, with a focus on China, India, Vietnam, Malaysia, Indonesia and the Philippines, and in the United States. Sheares looks to build its portfolio of healthcare delivery assets by investing in healthcare companies with strong management teams and proven track records. Sheares aims to develop new healthcare delivery models and processes in the right setting by leveraging innovative technologies and operators. Sheares is wholly-owned by Temasek, a global investment company headquartered in Singapore. For more information, visit