VietNamNet Bridge - Some years ago, private investors, recognizing that state-owned hospitals were getting overloaded, rushed to build hospitals. However, the profits they have gained remain modest. 

The demand for healthcare service is increasing

Trieu An Hospital, a well-known private hospital in HCMC, owned by the businessman Tram Be, has released its H1 business report, showing modest net profit of VND28 billion. 

The figure represented a 28 percent growth rate over the last year, but the ROE (return on equity) was very low at 4.9 percent because of huge investment capital.

Financial experts think that if counting all types of expenses, Trieu An’s profits would be even lower. Its investments in some subsidiaries are bringing losses, while Trieu An did not make provisions for investment items.

Phuc An Khang, a hospital worth VND2.5 trillion, operated for several years before it had to shut down last year as the low number of patients did not allow to cover operation costs. A part of the hospital’s assets was kept by the Vietnam Asset Management Company (VAMC).

The same situation is happening with the Transport Hospital, which was a state-owned hospital and is now a private one after equitization. 

Analysts believe that the hospital will prosper after falling into the hands of Do Quang Hien, president of T&T Group. However, the hospital continued reporting the loss of VND16 billion in H1, raising the total accumulative loss to VND74 billion.

Hien has recently asked the State to buy back all the shares sold before to T&T at VND149 billion.

Nevertheless, despite the closure and difficult operation of private hospitals, analysts still say that the potential of the healthcare sector is great in the long term. 

With a large population and increasingly high spending on healthcare services, Vietnam is among the countries with the highest growth rates in this field in Southeast Asia.

Analysts also say that the development of private hospitals is needed. The State is calling for investment from different sectors, while it is divesting from state-owned hospitals.

However, they warn that there are many big challenges for hospital developers. State-owned hospitals are still the top choice for patients. 

Vietnam lacks qualified physicians and surgeons. The State may tighten control over the healthcare service fee increases, which will affect the operation of private hospitals.

Private hospitals now hold 13.7 percent of market share, and the figure is believed to increase in the future when the state accelerates equitization and divestment.

According to KPMG Vietnam, the government wants private hospitals to provide 20 percent of total beds by 2020 instead of 5 percent in 2016.

In the latest news, the Hoan My Medical Group has taken over Hanh Phuc Hospital, after taking over Van Phuc and Vinh International Hospitals.

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