Two decades ago, the healthcare system of Myanmar was best described as comatose. It had been in declining condition since independence from Britain in the late 1940s. Envisioned as offering free primary healthcare, the system failed to do so in practice and languished because of a lack of investment as the country grew increasingly isolated under Ne Win and subsequent military leaders. In 2000, the World Health Organization (WHO) ranked the healthcare system in Myanmar 190th out of 191 countries.
It's been a long and winding road, but the opening of the country starting in 2011 began to attract more investment from abroad in health services. Before then, Myanmar was spending between 0.5% and 3% of gross domestic product on healthcare, consistently ranking among the lowest in the world.
But in 2012, the government doubled the healthcare budget to around US$4 per head and set a goal to have universal healthcare by 2030, according to report released in 2015 by Oxford Business Group, a London-based business consultancy with expertise in emerging markets.
The world community and medical professionals are closely watching Myanmar's progress. Indeed, the issue now goes beyond simply providing medical care to people; it is a big test for the National League for Democracy (NLD) to show whether a civilian government and democracy can make a real difference in terms of improving the quality of living.
After formally assuming power in May last year, the government increased the healthcare expenditure budget for the 2015-16 fiscal year by 7% and is pushing forward with healthcare liberalisation.
The fact is, Myanmar was an emerging market for the healthcare industry, albeit serving a privileged niche, even when the military junta was in power. Affluent patients from Myanmar have long been travelling to Bangkok and Singapore to receive medical treatment that was not available at home.
Bangkok is the preferred destination given the cultural similarities and more affordable cost of living. For Bangkok Dusit Medical Services (BDMS), Thailand's largest hospital chain, patients from Myanmar are its third largest foreign client group, following those from the United Arab Emirates and Qatar.
"Myanmar people know what quality healthcare is and they are willing to pay to acquire quality services," Narongrid Galaputh, chief executive of National Healthcare System Co Ltd (N Health), a non-hospital business unit of BDMS, told Asia Focus during a visit to Yangon last month. He and other executives of BDMS were there to open the group's clinical laboratory.
BDMS, with 36 hospitals in Thailand under five brands and two facilities abroad, is positioning itself to be a leading healthcare investor in Myanmar. Liberalisation has allowed foreign investors to hold shares in healthcare ventures of up to 70%, and the rest must be owned by local partners.
Myanmar is becoming a new frontier for healthcare investment in the region, according to "Investing in Asean 2017", a report released this year by the Asean Secretariat. For example, Samitivej -- a high-end hospital under BDMS -- has operated an international clinic at Parami Hospital in Yangon for two years and plans to open a new clinic in the city.
Thonburi Hospital Group from Thailand is joining with Myanmar's Ga Mone Pwint Company to build a private hospital in Myanmar. Indonesia's Lippo Group is seeking to build up to 20 hospitals in Myanmar by 2025, in a joint venture with Serge Pun & Associates Group and First Myanmar Investment (FMI).
The investments also extend to related healthcare service. Singapore-based AsiaMedic has joined with a local partner, Five Oceans Service, to operate diagnostic scanners for two hospitals in Mandalay. Last but not least, BDMS has formed a partnership with two local businesses -- Bahosi Hospital and Sea Lion Company, a medical equipment supplier -- to open the first government-licensed clinical laboratory in Yangon, which opened last month.
The new lab, operated by N Health Myanmar, aims to support large hospitals by offering high-end genetic tests, allergy tests and evaluations for tuberculosis, malaria and dengue fever. It also aims to provide standard analytical services including medical checkups for small and medium-sized hospitals as well as walk-in customers.
"When we talk about healthcare in Myanmar, we are talking about a market of 52 million people, consumers who highly value quality healthcare service," Mr Narongrid told Asia Focus.
"This is a market that is promising because it continues to grow. Myanmar is on the upswing. The country has opened itself up and become a democratically open society. And in a democratic society, it means public policy will focus on providing public welfare."
Despite increasingly fierce competition, Mr Narongrid believes Thai healthcare providers will still have the upper hand in their neighbouring country.
"Singaporean and Malaysian investment might appear more advanced," he said. "But Thai healthcare service is appealing to Myanmar people who prefer cultural similarity, shared Buddhist culture and Thai-style polite hospitality.
"Besides, the cost of Thai healthcare is much more affordable when you think in terms of value for money. Myanmar people, like Cambodian people, have great trust in Thai healthcare quality."
Dr Win Zaw Aung, managing director of Sea Lion Group, agrees that the outlook for the medical sector had grown much brighter.
"We expect to see growth rise in leaps and bounds in the next three to five years, driven by policy changes. Since the civilian government started in 2011, health expenditures have risen over 10 times and this is just the beginning," he said at the opening of the Yangon laboratory in which his company is a partner.
Though Myanmar is still a very poor country, it is interesting to note that people are willing to pay to afford good healthcare service. According to a World Bank survey in 2012, healthcare costs in Myanmar are mainly paid out of pocket (OOP) by the general public.
The report showed that OOP payment accounted for 92.7% of total healthcare expenditure. The ratio in Vietnam -- a country with relatively higher incomes -- is 93.3%, Cambodia was at 73.4% and Laos 78.2%. The figure for Thailand was 55.8%, reflecting the presence of state-provided universal healthcare for those who cannot afford private providers or health insurance. At the same time, Myanmar spent the lowest proportion of its budget on healthcare in Asean.
Myanmar also has fewer doctors per capita than other countries in the region. According to the World Health Organization (WHO), there are 6.1 doctors per 10,000 people in the country, compared with 11.9 in Vietnam, 19.5 in Singapore and 23 in Japan.
The government has committed to training 5,600 medical professionals and 1,300 nurses. Though it is not stated explicitly, foreign companies investing in Myanmar usually need to meet demands from Myanmar authorities that require foreign investors to hire local staff and transfer technology.
The liberalisation of healthcare is not without problems. For a start, Mr Narongrid says, investors need to prepare to deal with kyat exchange-rate risk, as regulations require the investment must be in the local currency.
Investors also need to prepare to spend a lot of time documenting procedures and regulations because a coherent national administration is still a work in progress in a country where five decades of military rule left the civil service in tatters. Many investment rules and regulations are still just policies, without clear enabling laws.
"Investors need to understand. Myanmar is just opening. They are trying new things," said Mr Narongrid. "We just need to be patient and work together. Of course, there are hiccups. But they are just small hurdles and they are not deal-breakers."