Understanding The Key Drivers Behind Healthcare Growth in Vietnam

Bijay Singh, Head of Healthcare Business Unit at DKSH, shares key developments driving this promising market with insights from a recent research paper in collaboration with the independent business intelligence firm FrontierView.

Government Efforts in Accelerating Healthcare Access
Vietnam's healthcare sector is evolving through public-private partnerships, decentralization plans, policy reforms, and efforts to improve infrastructure and expand access to specialized care.

Since 2019, we have witnessed 336 strategic public-private partnerships (PPPs) contracts, totaling USD 72 billion mobilized, where healthcare infrastructure and pharmaceutical development represent significant focus areas. The Gia An 115 Hospital in Ho Chi Minh City exemplifies successful PPP implementation - a 367-bed facility offering specialized treatment in cardiology, neuroscience, and cancer care. Provincial hospitals have implemented 3,000 new medical devices, from CT scanning to advanced diagnostics, benefiting 42,000 residents through 4,800 trained local doctors. These centers have significantly improved access to advanced medical services, particularly in oncology and cardiology care, prompting plans for similar initiatives across other provinces.

The central government is also amid a decentralization push to improve healthcare efficiency and management. With plan to transfer management of six central hospitals to provincial governments or to other hospitals by 2030, healthcare management efficiency is expected to improve as provincial governments and lower-level facilities are empowered to have more responsibility in management, which enabling targeted local solutions. The Ministry of Health also have plans to decentralize care with the success of its July 2024 pilot program, allowing Ho Chi Minh City to independently import specialized and rare medications for disease prevention. Through multiple decentralization plan, healthcare standard is expected to improve significantly as persistent challenges including staffing shortages, infrastructure project delays, and procurement bottlenecks are to be addressed

Recent amendments to the Law on Health Insurance are also one of the government’s efforts to improve healthcare access while addressing the Vietnam Social Security’s financial challenges in the market. Effective July 1, 2025, the amendments will enhance funding by covering at least 50% of outpatient costs and shifting funding from the administrative budget to the medical examination and treatment budget.

Private Sector Contributes to Healthcare Enhancement
Vietnam has attracted USD 38 billion in foreign direct investment in 2024, demonstrating remarkable potential as one of the few markets showing year-over-year FDI growth in Southeast Asia.

In healthcare specifically, the government has been encouraging more private sector participation. Numerous international players have entered the market in the past 18 months, including Singapore-based healthcare providers Thomson Medical Group and Raffles Medical Group, alongside private equity firms KKR and Warburg Pincus. Private healthcare facilities have also been investing significantly to increase their presences and service capabilities. These include specialty departments equipped with advanced diagnostic technologies, standardized treatment protocols aligned with international standards, and integrated patient care systems connecting primary and specialized care. With such investment from the private sector, Vietnam has seen a remarkable 30% growth in private patient volume from 2019 to 2023, significantly outpacing other SEA markets' growth rates. The government's target to increase private hospital beds from 10% in 2025 to 25% by 2050 further supports this trajectory.

Healthcare retail is also undergoing major expansion, contributing significantly to enhance healthcare access. Chain drug stores nationwide have reached 3,246 as of March 2024 - a sixfold increase since 2019. Leading pharmacy chains are expanding beyond urban centers into second-tier cities, improving access to quality medicines across urban and rural areas. Long Chau's expansion from 22 outlets in 2018 to 1,706 outlets by June 2024 exemplifies this trend. The market has witnessed significant investment from both local and foreign investors, including Masan Group's investment in Phano Pharma and Dr Win, and Dongwha Pharm's 51% acquisition of Trung Son Pharma in 2023.

Leading domestic private healthcare providers are transforming Vietnam's healthcare delivery through systematic developments. Established networks like Hoan My Medical Corporation, operating 14 hospitals across nine provinces, and Vinmec's JCI-accredited international hospitals demonstrate this evolution. Together with facilities like Tam Anh and FV Hospital, these providers are establishing centers of excellence for specialized treatments in major cities, implementing standardized quality management systems, and developing integrated care models that connect primary clinics with specialty treatment centers. Market intelligence suggests Vietnam will follow regional trends, with patients increasingly seeking private care and healthcare professionals expanding their presence in private facilities.

A Promising Outlook Driven By Innovation and Expertise
To establish itself as a regional healthcare hub, Vietnam must complement the government efforts and private sector investments with workforce expertise enhancement and health tech innovations.

Training programs are essential to ensuring physicians and nurses receive proper education, a key priority for the Vietnamese government. In recent years, multiple MoUs have been signed between the government and healthcare companies like AstraZeneca, Sandoz, and Medtronic to support workforce training. Additionally, expanding the role of pharmacies in providing care is seen as an effective solution to improving healthcare access. Technology transfer agreements and international partnerships, particularly in the manufacturing and distribution of medical products, are also essential for enhancing local production capabilities and tackling healthcare supply chain challenges in Southeast Asia.

Health tech is also another focus area, play a crutial role in enhacing healthcare accessibility efficiently. Vietnam's health-tech startup ecosystem is growing exponentially but have yet to come to its maturation. Led by companies like VinBrain, Annalise.ai, Viettel, and FPT, innovations like AI-assisted diagnostics and patient monitoring systems have been introduced. The sector's dynamism is evidenced by a 391% year-over-year surge in capital flow to healthcare tech startups in 2023. These innovations support decentralization efforts, enabling remote consultations and improving healthcare access in underserved areas.

The market's evolution demonstrates tremendous effort in building an accessible, quality, and sustainable healthcare system in Vietnam. The combination of regulatory reform, private sector investment, and innovation creates a compelling environment for healthcare progress, contributing to the region's broader healthcare transformation journey.

With 160 years of experience being strategic healthcare business partner for healthcare brands and companies, we are optimistic that Vietnam is on its path setting new standards for healthcare development in emerging Southeast Asian markets. With deep local insights and broad industrial knowledge, DKSH does not only offer comprehensive and tailor made solutions that fit business needs, but also goes above and beyond by providing strategic consultation to ensure sustainable growth for our partners in the markets. With the patient centric approach, as we connect healthcare providers, professionals, retailers and other stakeholders within the healthcare ecosystem, DKSH greatly contributes to enhance healthcare access, ultimately enrich people’s lives by providing healthcare for all in Vietnam and beyond.