Closing Asia's USD 1.8 trillion health protection gap

05 Oct 2018

Swiss Re Institute's latest Expertise Publication examines the health protection gap in Asia, which stands at an estimated USD 1.8 trillion. The health protection gap is the sum of two components: (1) the level of "stress" that spending has on household finances; and (2) the incidence of people not seeking treatment due to affordability. To estimate Asia's health protection gap, Swiss Re Institute surveyed more than 16 000 consumers in 12 Asian markets (China, Hong Kong, India, Indonesia, Japan, Malaysia, Philippines, Singapore, Republic of Korea, Taiwan, Thailand and Vietnam).

China has the region's largest health protection gap
Most of the estimated gap – USD 1.4 trillion – originates from emerging Asia (ie, China, India, Indonesia, Malaysia, the Philippines, Thailand and Vietnam). This is driven by the large population, low disposable incomes, high out-of-pocket medical expenses and low health insurance ownership levels in these markets. Out-of-pocket spending on healthcare in emerging Asia constituted almost 18% of net household income and, according to the responses to the survey, more than half of that spending was a source of financial stress.

See Asia's health protection gap in illustration

By country, the health protection gap is the largest in China (USD 805 billion), followed by India (USD 369 billion) and Japan (USD 218 billion). Their large populations and lower aggregate income levels drive the gaps in China and India. In Japan, the Republic of Korea and the region's other mature markets, the gaps are explained by population size and the higher costs of healthcare. The gap is the lowest in Thailand, where provision of healthcare through a subsidised universal healthcare system has resulted in the country having one of the lowest out-of-pocket medical expenses in the region.

Estimated healthcare protection gap in Asia by country, USD billion 2017


Source: Swiss Re Institute

Absent remedial action, we expect the health protection gap across all Asia to widen in the coming years given the aging societies in many markets, and high growth of medical inflation relative to average incomes.

To learn more, download a summary version presenting the key findings of the study.

Swiss Re clients can request a print copy of the full study undertaken by the Swiss Re Institute, called Asia’s health protection gap: insights for building greater resilience, by contacting Sohila Kwan at solutions_Asia@swissre.com.