Lankan private health sector poised for strong sustainable growth: Fitch

29 September 2015 02:44 am - 0 - {{hitsCtrl.values.hits}}

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Sri Lanka’s private health sector is poised for strong sustainable growth for the foreseeable future, international ratings agency Fitch Ratings said.
“Favourable demographic trends have created a sustainable growth environment for Sri Lanka’s private-sector hospitals in the medium term,” a report said.
It said that Sri Lanka is home to one of the world’s fastest growing ageing populations, with 9 percent of the population over 65 in 2014, which is likely to double by 2030.

Further, it said that 71 percent of deaths in the country in 2012 were through chronic non-communicable diseases and that 25 percent of the adult population is already suffering from hypertension and 50 percent of the population will suffer from diabetes by 2050.

Coupled with the booming medical tourism, Fitch said that these factors would create long hospital stays and advanced procedures.

The report noted that the free public sector, which still dominates the hospital industry with 73 percent of the hospitals, 93 percent of beds and over 90 percent of market share, will be inadequate to service the growing demand, creating an opportunity for greater private sector participation.

“The favourable demand outlook, strong operating cash flow generation and modest margins in the sector promote continued investment by leading private-sector hospitals, which have strong to moderate credit profiles,” it added.
However, it said that the lack of skilled professionals and concerns about negligence and poor quality of care stifled the growth, which should be addressed with laws and regulations.
Fitch added that low health insurance penetration will also act as an impediment.
“Only 4 percent of the private healthcare spend was attributable to insurance in 2013. A meaningful increase in medical insurance coverage would result in more patients opting for paid healthcare by shifting away from state-run hospitals,” it said.
Fitch said that Sri Lanka spent just 3.24 percent of gross domestic product (GDP) in healthcare in 2013 as opposed to 4.25 percent in other lower-middle income countries, 6.28 in high-middle income countries and 9.94 percent globally. It said that Sri Lanka will become a higher-middle income country in a few years.
“The per capita healthcare spend of US $ 102 is significantly below the average per capita for higher-middle-income countries at US $ 465, highlighting the growth potential in the medium term,” it said.

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Lankan private health sector poised for strong sustainable growth: Fitch

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