View
8
Download
0
Category
Tags:
Preview:
DESCRIPTION
AEC Healthcare Jakarta1
Citation preview
© Oliver Wyman Group
ASEAN Integration: Framework for considering benefits and costs
7 May 2014
Dr. Jeremy Lim
MBBS, MPH, MRCS (Edin), MMed (Surg), FAMS
Head of Health and Life Sciences, Asia Pacific
CONFIDENTIALITY
Our clients’ industries are extremely competitive. The confidentiality of companies' plans and data is obviously critical. Oliver
Wyman Group will protect the confidentiality of all such client information.
Similarly, management consulting is a competitive business. We view our approaches and insights as proprietary and therefore
look to our clients to protect Oliver Wyman Group's interests in our presentations, methodologies and analytical techniques.
Under no circumstances should this material be shared with any third party without the written consent of Oliver Wyman Group.
Copyright © Oliver Wyman Group
2 2 © Oliver Wyman Group
Brand Strategy
Consulting
Economic
Consulting
HR and
Investment
Consulting
Risk and
Insurance
Risk and
Reinsurance
Strategic
consulting
Oliver Wyman is a member of Marsh & McLennan Companies group, a US$11 BN company with more than 54,000 staff in over 100 countries
Strategy
consulting
3 3 © Oliver Wyman Group
Oliver Wyman office
Americas
Atlanta
Bermuda
Boston
Calgary
Chicago
Columbus
Dallas
Detroit
Houston
Lisle
Los Angeles
Melville
Mexico City
MMC Group office (not exhaustive)
Significant Oliver Wyman case work
Milwaukee
Montréal
New York
Ottawa
Philadelphia
Pittsburgh
Portland
Princeton
Reston
San Francisco
São Paulo
Toronto
Washington
Europe, Middle
East, and Africa
Barcelona
Dubai
Dusseldorf
Frankfurt
Hamburg
Istanbul
Leatherhead
London
Madrid
Milan
Moscow
Munich
Paris
Stockholm
Wilmslow
Zurich
Asia-Pacific
Beijing
Hong Kong
New Delhi
Seoul
Shanghai
Singapore
Sydney
Oliver Wyman has over 40 branches in the major cities of the world
4 4 © Oliver Wyman Group
Greetings from Singapore!
5 5 © Oliver Wyman Group
EVOLUTION OF AEC
ASEAN Vision 2020 “a stable, prosperous, and highly competitive region with equitable economic development, and reduced poverty and
socio-economic disparities”.
Year Key Milestones
1997 ASEAN Vision 2020
2003 Declaration of the ASEAN Concord II (Bali)
2007 Jan Accelerate establishment of AEC to 2015
2007 Nov AEC Blueprint
2013 “I think (ASEAN) have come to the realization that
we are not going to be as ready as we might have
thought in 2003 by the end of 2015" Gita Wirjawan,
Indonesian Minister of Trade
6 6 © Oliver Wyman Group
“Member states of the Association of Southeast Asian Nations (ASEAN) are struggling to get ready for full economic
integration by 2015, and most of their 600 million people are unaware of the changes
that will take place.” Reuters 6 June 2013
ASEAN people unaware of 2015 economic integration
7 7 © Oliver Wyman Group
External pressures (such as the formation of the European Union Single Market and the North American Free Trade Area) pressured ASEAN to form a free trade area (FTA) in 1992… The AEC Blueprint outlines actions and measures and time lines for completion by the 2015 deadline. However, by end-2011 only an implementation rate of 67.5% had been achieved. While tariff elimination had largely been on schedule, there were difficulties with removal of non-tariff barriers (NTBs) and services and investment liberalization.
8 8 © Oliver Wyman Group
“It is highly unlikely that ASEAN would be able to meet all its integration goals by the year
2015. On the other hand, one needs to
see the ASEAN economic integration as an ongoing process
for which the leaders have laid down the initial foundation”-
Sanchita Basu Das, Institute of Southeast Asian Studies
9 9 © Oliver Wyman Group
ASEAN ECONOMIC COMMUNITY 2015: HEALTHCARE
Core
Element
Principal Considerations
Free flow of goods Zero tariff and removal of Non-tariff Barriers; Single licensing
with harmonization of standards; Differential pricing of
pharmaceuticals and medical devices across ASEAN nations
Free flow of services Legal status of Cross-border health services; information flow;
issues related to mutual recognition
Free flow of
investment; Free
flow of capital
Impact of private investment on public healthcare services-
manpower egress, ‘demonstration effect’; consequences of
consolidation and ‘mega-healthcare services groups’;
acceptability of healthcare services providers under foreign
ownership
Free flow of skilled
labor (including
Mutual Recognition
Agreements)
Impact of manpower flows; Harmonization of Standards
10 10 © Oliver Wyman Group
Key Stakeholders
Stakeholder General Position
Policy Maker/
Politician
Deeply entrenched local interest groups to pay attention to;
Intellectually aware of arguments for and imperative of
AEC
Payer Lowest defensible price, highest perceived value
Provider-
Institutional (Service
and Products)
Maintain market ‘protection’ and position; Some see
economic opportunities in expansion
Provider-
Professional Group
Largely insular and localized perspectives; Sees itself as
protector of public interest and professional standards
Provider- Individual Heterogeneous but generally localized perspective
Patient Good value for money
Public Good value for money until economic impact felt- jobs,
earnings
11 © Oliver Wyman Group 11
Discussion Issue 1- Investments within and across ASEAN
• ASEAN losing FDI share (both stock and flow) o Never recovered since Asian financial crisis o Competition from China and India
12 © Oliver Wyman Group 12
Investments within and across ASEAN
• Bite-sized regional integration demonstrating synergies and benefits
– Iskandar Project
– Greater Mekong Subregion
• Increased physical connectivity
– Planned high speed rail between Singapore and KL
• “Strong country factors in each ASEAN nation complemented by solid ASEAN agreements
could make the ASEAN region an FDI magnet again”- Manu Bhaskaran, Centennial Asian
Advisors
13 13 © Oliver Wyman Group
Investments within and across ASEAN
Stakeholder Position
Policy Maker Encourage private investment to ‘offload’ government
financing; concerns over cannibalization of public sector
and uncontrolled private sector expansion
Payers Lowest price, highest value; politically defensible
Providers- Services New funding to expand/ improve services; economies of
scale and synergy regionally; fear of competition
Providers- Products New funding to expand/ improve services; economies of
scale and synergy regionally; fear of competition and
pricing pressures
Professionals Potentially higher remuneration; Competition for power and
influence
Patients Lowest price, highest value
Public Lowest price, highest value; some nationalistic sentiments
14 © Oliver Wyman Group 14
Discussion Issue 2- Mutual Recognition Agreements and “free flow of skilled labor”
• Why?
– Encourage Foreign Direct Investment (FDI)
– Meet short-term skill shortages
– Facilitate upgrading of local population
– Meet international commitments under GATS/ FTA
• But
– “Recognition of qualifications is not enough to ensure market access in ASEAN”-
Chia SY, Singapore Institute of International Affairs 2012
– Policies and regulatory frameworks affecting mobility
15 15 © Oliver Wyman Group
“Free flow of skilled labor”
Stakeholder Position
Policy Maker (Health) Overcome skills gap, reduce wage costs; concerns
over uncontrolled private sector expansion, quality
standards, protection of local enterprises
Payers Lowest price, highest value; politically defensible
Providers- Services New labor source to expand/ improve services;
economies of scale and synergy regionally; increased
competition for labor
Providers- Products Perhaps easier operations
Professionals Potentially higher remuneration (South to North); fear
of competition and pricing pressures (North to South)
Patients Lowest price, highest value
Public Lowest price, highest value; some nationalistic
sentiments
16 16 © Oliver Wyman Group
"Please do not expect a big bang event in 2015 where everything is going to happen overnight when the ASEAN Economic Community comes into being. We've made progress in some areas and unfortunately regressed in some areas. But over time and following the ASEAN pace, gradually the ASEAN Economic Community will come to be and by the end of the decade, whatever the vision was, if it's not done by 2015 it will be done by 2020." Kishore Mahbubani, Dean of the Lee Kuan Yew School of Public Policy
The Greater Mekong Sub-Region designates a development project formed by the Asian Development Bank in 1992 that brought together the six states of the Mekong River basin, namely Cambodia, Laos, Myanmar, Thailand, Vietnam, and Yunnan Province, China. Regional Cooperation Operations Business Plan: 2012-2014: In December 2011, GMS leaders endorsed a strategic framework for 2012-2022 that calls for a range of new measures to strengthen regional cooperation.
19 19 © Oliver Wyman Group
What can be done to improve the odds of success for ASEAN integration?
20 20 © Oliver Wyman Group
The Diversity of ASEAN
21 21 © Oliver Wyman Group
Conflict Resolution within ASEAN
22 © Oliver Wyman Group 22
ASEAN Business Club
• “We have come together to form ASEAN Business Club at a critical
moment in economic history. A new global order is coming into being
centered around Asia, in our own backyard. This new order is
dominated by large economic entities. Individually, we are dwarfed by
these economies and have little more than a marginal role on the global
stage. Together, however, we are a market of 600 million and have a
GDP of over US$2 trillion.”
• “The governments have laid out ambitious plans for an ASEAN
Community as a “a single market and production base”. These plans
need the support and partnership of businesses.
• “Businesses need to provide this support and ensure that we are there to tap the value of
economic integration. We need to grow cross-border trade and investment, create more
ASEAN enterprises and build regional capability in our organizations.”
23 © Oliver Wyman Group 23
ASEAN University Network
• Established in November 1995
–Signing of Charter by the Ministers responsible for Higher Education from
ASEAN countries
–Signing of the Agreement on the Establishment of the AUN by the
presidents/rectors/vice-chancellors of participating universities
–Formation of AUN Board of Trustees and a Secretariat headed by an
Executive Director
• Strengthen the existing network of co-operation among leading universities
in ASEAN
–Promoting co-operation and solidarity among ASEAN scholars and
academicians, developing academic and professional human resource,
and promoting information dissemination among ASEAN academic
community.
24 © Oliver Wyman Group 24
A friendship founded on business is a good deal better than a business founded on friendship. ~John D. Rockefeller
QUALIFICATIONS,
ASSUMPTIONS AND LIMITING
CONDITIONS
This report is for the exclusive use of the Oliver Wyman Group client named herein. This report is not intended for general
circulation or publication, nor is it to be reproduced, quoted or distributed for any purpose without the prior written permission of
Oliver Wyman Group. There are no third party beneficiaries with respect to this report, and Oliver Wyman Group does not accept
any liability to any third party.
Information furnished by others, upon which all or portions of this report are based, is believed to be reliable but has not been
independently verified, unless otherwise expressly indicated. Public information and industry and statistical data are from sources
we deem to be reliable; however, we make no representation as to the accuracy or completeness of such information. The
findings contained in this report may contain predictions based on current data and historical trends. Any such predictions are
subject to inherent risks and uncertainties. Oliver Wyman Group accepts no responsibility for actual results or future events.
The opinions expressed in this report are valid only for the purpose stated herein and as of the date of this report. No obligation
is assumed to revise this report to reflect changes, events or conditions, which occur subsequent to the date hereof.
All decisions in connection with the implementation or use of advice or recommendations contained in this report are the sole
responsibility of the client. This report does not represent investment advice nor does it provide an opinion regarding the fairness
of any transaction to any and all parties.
Recommended