Which means more out-of-pocket spending for Singaporeans.
According to the latest study of Swiss Re, Singapore healthcare costs are expected to balloon to $18.1billion by 2020.
"The market could face a potential shortfall in healthcare financing of USD600 million in 2020, which will require additional fiscal spending or higher out-of-pocket funding by individuals," it added.
Swiss Re noted that in response to what could be more indvidual spending for healthcare, Singaporeans could look to private insurance plans which have "strong value propositions to support individuals to better manage their future healthcare financing needs."
Panning out to the great Asia region, Swiss Re noted that In 2010, more than half of the regional governments had to bear over 40% of the total healthcare expenditure, with Japan covering the highest proportion (83%). The other main funding source was out-of-pocket expenses, which ranged from a low of 14% (Thailand) to 61% (India) of total healthcare expenditure.
It also noted that private prepaid plans contributed less than 10% of the total healthcare expenditure for all the markets covered in this report, with the exception of Taiwan which came in at 19%. The total healthcare costs in Asia-Pacific are projected to increase to USD2.7 trillion by 2020, from USD1.2 trillion in 2010. While the total healthcare costs in Singapore will reach USD18.1 billion by 2020 from USD8.5 billion in 2010.
"This figure is based on projections of economic growth, medical inflation and population growth in the 13 Asia-Pacific markets covered. However, there will be faster growth in emerging markets, which currently have lower healthcare expenditure as a percentage of GDP," Swiss Re said.
Based on Swiss Re's projections, the average real GDP growth rate from 2014 to 2020 for Asia-Pacific will be about 5%. Robust economic growth, especially in the emerging Asian countries, will bring additional demand to the health and medical industry.
"People and countries tend to spend more on health and medical as they get wealthier. With economic growth in Asia-Pacific, especially in emerging markets, rising household income will lead to higher spending on health and medical care," says Clarence Wong, Head of Economic Research & Consulting, Asia-Pacific, Swiss Re.
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