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Study: Healthcare Market in Indonesia Where Are the Opportunities and Risks?

| Editor: Manja Wühr

Indonesia wants to whip its healthcare into shape: 267 million Indonesians will need to be fully insured by 2019, when the universal public healthcare system is established. A Roland Beger study concludes that there are many opportunities for foreign healthcare providers considering entry into the market and highlights key market entry strategies.

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Roland Berger Studie: Indonesischer Gesundheitsmarkt bietet ausländischen Investoren große Chancen, aber auch viele Hürden
Roland Berger Studie: Indonesischer Gesundheitsmarkt bietet ausländischen Investoren große Chancen, aber auch viele Hürden
(Bild: Michael Jarmoluk; CC0; / BY 1.0)

München – As Indonesia's infrastructure becomes increasingly robust, the country is improving healthcare provision by developing a universal healthcare system for all citizens. By 2019, the fully developed system aims to insure 267 million Indonesians and by 2025, expenditure is expected to reach USD 363 billion, up multifold from USD 20 billion in 2010. This staggering CAGR of more than 20% is attracting many foreign healthcare providers, interested in acquiring a share of the growth. The many positive aspects of this fast-growing market are the subject of an in-depth study produced by Roland Berger, entitled: Capturing the business of health – Opportunities and challenges for international healthcare providers in Indonesia.

The study concludes that there are many opportunities for foreign healthcare providers considering entry into the market and highlights key market entry strategies. These include defining specific target customers and segments, building credibility with local stakeholders and identifying key niches to serve, from a medical or geographical perspective. But while this is the conclusion, the study highlights extensive challenges for foreign healthcare providers, which they must consider carefully, before making a decision to enter the Southeast Asia growth economy.

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Cautions on market entry

"Market diversity is one of most daunting aspects, when it comes to operating in Indonesia. The market is highly segmented with considerable differentiation within the regions. It is therefore unlikely that one single player will dominate a single subsector in the country's healthcare industry," said Yoshihiro Suwa, Principal in Roland Berger's Jakarta office and author of the study.

Currently, public healthcare known as Badan Penyelenggara Jaminan Sosial (BPJS), consists of a number of disparate systems, with major differences in how the system and medical care are accessed, depending on profession and income levels. While the Indonesian government aims to merge all schemes into one single scheme in the future by 2019, this is one of the current major disparities in Indonesia, where those with premium subscriptions enjoy a better range of services and a higher level of more care.

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