Healthcare at a crossroads: How Vietnam can unlock growth through private investments
Vietnam’s healthcare sector has made remarkable strides over the past few decades, driven by government reforms and increasing private sector involvement. A key milestone was the establishment of social health insurance (SHI) in the early 1990s, which now covers approximately 93% of the population, with the government allocating over $5 billion annually to support SHI patients. Under Resolution 20, issued by the Politburo in 2017, Vietnam has aimed for universal health coverage (UHC), ensuring equitable access to healthcare. These efforts have led to significant improvements in health outcomes, including a 36% reduction in maternal mortality and a 30.5% decline in infant mortality over the past two decades.
Healthcare infrastructure has also expanded, with 1,100 public hospitals and 11,000 health stations serving both urban and rural areas. Meanwhile, the private sector has strengthened its role, contributing nearly 300 private hospitals and over 35,000 clinics to the country’s overall healthcare capacity.
A healthcare sector under strain after years of success
However, Vietnam’s healthcare system is facing a demographic shift that requires urgent reassessment. The country is one of the fastest-aging nations in Southeast Asia, behind only Singapore and Thailand. By 2036, over 14% of the population will be aged 65 or older, a figure expected to reach 20% by 2050. This aging population is driving increased demand for healthcare services, particularly in managing non-communicable diseases (NCDs), which now account for 70% of all deaths. Urbanization and lifestyle changes have further reshaped the disease landscape, with cardiovascular diseases, diabetes, and cancer becoming more prevalent. In 2023 alone, Vietnam recorded 180,000 new cancer cases and 120,000 cancer-related deaths. This rising burden of chronic diseases is placing unprecedented pressure on the healthcare system, which remains under-resourced, with only 11.5 doctors and 11.4 nurses per 10,000 patients—figures significantly below regional averages.
To gear up to the new demands, Vietnam’s healthcare system needs to clear three key challenges:
Underutilized primary care while hospitals are overcrowded
Shortage of skilled medical professionals,
Enduring gaps in financing that leads to high out of pocket expenditures by patients (up to 40%).
Reforms on the horizon pave the way for a better organized and more inclusive healthcare
The government has put in significant efforts on different angles to improve the healthcare system and outcomes for the population. One notable achievement is the consistently expanded insurance coverage access for underserved groups such as non-office workers, ethnic minority groups; as well as accelerated process for patients with rare disease to obtain quality care at central hospitals without the need for a referral letter.
The government has also expanded coverage for children who undergo LASIK surgery and contemplate qualifying health screenings for insurance coverage to encourage disease prevention. Treatment-wise, patients can expect increased access to high-quality complex medical services at central hospitals as the government caters funds for upgrading and building second establishments (Children’s Central Hospital 2, Obstetrics Central Hospital 2) of central hospitals that are running overcapacity.
However, given the ever-increasing demands for high-quality, affordable, and accessible medical services, the government has encouraged the private sector to participate in investing and providing care services/medical supplies/drugs to the population. To illustrate, the government aims to increase the proportion of private beds from 8% (by 2022) to 15% (by 2030). This is coupled with efforts to streamline regulations and investment grounds for domestic and global private investments, such as the development of guidelines for public-private partnerships, and the expansion of FIE (foreign-invested enterprises) pharmaceutical companies in Vietnam to participate more deeply in the drug supply chain.
The role of the private sector in elevating healthcare in Vietnam
Going forward, private investors and entrepreneurs will be needed to bring Vietnamese healthcare to the next level, given both the existing shortcomings and the more conducive business environment for healthcare investments. We believe that 6 emerging investment themes will draw most of the efforts:
1. Invest in primary care networks, especially in cities where primary care options are limited, to ease the burden on public hospitals and attract high volumes of repeat outpatients (affordable screenings, examinations, and treatment of basic care packages across a wide range of most needed services and connect vertically with higher care levels to provide continuous care for patients.
2. Catering to the out-of-pocket spend of growing middle-class consumers focus on selective services that are not covered by Social Health Insurance, which traditionally only hospitals in the public sector are permitted to provide such as Lasik, Cataract, IVF, etc. This investment could be a typical roll-up thesis, focusing on players that have several branches, demonstrated strength in acquisition and management of back-office services and customer acquisition.
3. Focus on complex, expensive-to-treat-and-manage NCDs, relieving the shortages of resources in hospitals with established specialties (Oncology, Orthopedics, Cho Ray Hospital, etc.), where patients wait months to get treatment. This investment is likely going to require a partner to bring in capabilities and know-how to build scale.
4. Invest into the training of healthcare professionals, to bridge the inconsistent university standards and improve the practical training opportunities for the staff. This theme is likely to require a partner with external assets to bring the know-how, as well as local universities eager to develop their curriculum.
5. Invest to make private insurance more mainstream by further collaboration between healthcare facilities and insurance companies, such as membership programs for members in the hospital network. Additionally, bring new financing concepts (health savings account, flexible spending account, health reimbursement arrangements, lending programs, etc.) that are not existing in the Vietnam market to help cover out-of-pocket expenses.
6. Invest in Vietnam’s drug manufacturing industry, where few domestic firms have the licenses or technology to make original brand-name drugs (accounts for 30% of circulation, 54% of total pharmaceutical market value). As brand-name drugs cost 4-12 times more than the global average in Vietnam, this investment is likely to garner government support.
Vietnam’s healthcare system is undergoing rapid transformation, driven by shifting demographics, evolving policies, and increasing private sector participation. While opportunities for investment are growing, key challenges remain in accessibility, funding, and service delivery.
By Delta West research team
Want to know more? Reach out to our contacts at https://www.deltawestgroup.com/contact-1 to discuss our full report, including
✅ Demographic Trends – How aging, urbanization, and rising incomes are driving increased demand for healthcare services.
✅ Healthcare System Analysis – A detailed breakdown of Vietnam’s healthcare organization, delivery models and financing mechanism.
✅ Critical Challenges & Their Impact – An in-depth look at three major systemic challenges, their root causes, and how they affect both the population and potential market entrants.
✅ Investment Strategies & Opportunities – Actionable insights into addressing unmet needs, with real-world case studies of pioneering companies leading the way.
