Overview of the Sector

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Bangladesh’s healthcare sector is open to 100 percent Foreign Direct Investment (FDI) and offers enticing incentives for new entrants, including tax holidays for eligible hospitals. This supportive environment has laid the groundwork for a thriving healthcare ecosystem. It’s worth noting that tertiary healthcare facilities, medical college hospitals, specialized institutes, and maternity hospitals are strategically located across different regions, ensuring comprehensive healthcare coverage. The secondary healthcare sector comprises district hospitals and general hospitals, while primary healthcare is delivered through Upazila Health Complexes, TB Clinics, and other facilities. Moreover, the rapid expansion of daycare facilities such as Upazila Sub-centers and Community Clinics bolsters access to essential healthcare services.

These developments are underpinned by robust market dynamics, including a large and increasingly affluent domestic market. Around 30 to 40 million people are forecasted to transition to the middle-income class by 2025, driving healthcare demand. Despite a low per capita healthcare spending, of $50, there’s a clear growth trajectory, with spending on healthcare rising steadily. The recent surge in telemedicine usage, driven by increased internet penetration and the COVID-19 pandemic, is reshaping how healthcare services are accessed and delivered. Bangladesh’s aging population, changing disease patterns with a growing burden of non-communicable diseases (NCDs), and the government’s commitment to universal healthcare coverage by 2032 underscore the sector’s significance.

In summary, the healthcare sector in Bangladesh is characterized by favorable government policies, a burgeoning middle-class population with increasing affordability, and a shifting healthcare landscape driven by technological advancements and changing demographics. These factors collectively make Bangladesh an attractive destination for investors looking to contribute to the nation’s healthcare development while capitalizing on significant growth opportunities.

Key Factors Driving the Healthcare Industry

1. Large Domestic Market: Bangladesh has a growing middle-income class, with 30-40 million people expected to graduate to this class by 2025. This increased affordability drives the demand for healthcare services.
2. Increasing Healthcare Spending: Per capita healthcare spending ($50), in spite of being lower than its peers (India, Vietnam) has been growing at a Compound Annual Growth Rate (CAGR) of 9% since 2013. As incomes rise, there is potential for rapid growth in healthcare spending.
3. Telemedicine: The proliferation of internet users (126 million) and the accelerated growth of telemedicine during the COVID-19 pandemic indicate increasing acceptability and demand for digital healthcare services.
4. Aging Population: Bangladesh is experiencing an aging population, with an increasing number of people aged 60 and above. This demographic shift necessitates demand for more recurring healthcare services.
5. Changing Disease Profile: Non-communicable diseases (NCDs) now account for 67% of all deaths, emphasizing the need for healthcare services related to NCDs.
6. Increasing Insurance Coverage: The government plans to provide universal healthcare coverage by 2032, which is expected to boost the demand for healthcare services.

Market Dynamics

In Bangladesh’s healthcare scene by the end of 2019, there’s a striking divide between public and private healthcare. The Directorate General of Health Services (DGHS) oversaw 255 public hospitals, 5,054 private hospitals and clinics, and 9,529 diagnostic centers, totaling a substantial 143,394 hospital beds. However, the usage patterns differ significantly. 

Public hospitals, offering heavily subsidized prices to make healthcare accessible to lower-income folks, often struggle with overcrowding and somewhat lower hygiene and management standards. Consequently, those who can afford it tend to opt for private hospitals, known for their better quality of care and superior facilities. This dual healthcare system, catering to a variety of needs and financial situations, defines the healthcare market dynamics in Bangladesh.

In a significant move, an American investment firm has recently acquired control of Apollo Hospitals, the country’s sole Joint Commission International (JCI) accredited hospital, representing a substantial investment of around USD 100 million. This acquisition reinforces international investors to be a part of the commitment to elevating healthcare services in Bangladesh.

Government Support & Policy Incentives

• The government offers tax holidays for healthcare service providers, subject to specific conditions and location.
• Tax incentives are also extended to medical equipment manufacturers and exporters.
• The National Digital Health Strategy aims to enhance accessibility and affordability through digital technology.

Challenges, Trends, and Opportunities

Challenges:

• Import Dependency: Approximately 85% of medical equipment is imported, making the sector vulnerable to supply chain disruptions and currency fluctuations.
• Infrastructure and Access: Ensuring adequate healthcare facilities and skilled professionals in remote areas is essential for equitable healthcare access.
• Quality and Skilled Labor: Maintaining high healthcare service quality and ensuring a skilled workforce are ongoing challenges for the sector.

Opportunities:

• Healthcare Outflows: Many Bangladeshis seek treatment abroad if they can afford to,  due to the shortage of quality medical services, resulting in significant healthcare expenditures (estimated 3.5 billion USD annually) leaving the country. The availability of higher-quality healthcare services can cater to this demography.
• Demand-Supply Gaps: The availability of hospital beds per 1,000 population is below global standards, indicating a need for investment in tertiary and secondary healthcare facilities.