Vietnam's elderly care sector is experiencing remarkable growth, driven by an aging population and rising demand for quality care services. By exploring the potential of Vietnam's nursing home market, government initiatives, and the role of private investment in meeting the increasing need for elderly care, the Vietnamese elderly care market is posed to grow in the next 5-10 years.
Vietnam has the third largest older population in ASEAN
The elder population in Vietnam is expected to accelerate, and by 2035-2038, approximately one-fifth of Vietnam's population will be elderly. This corresponds to around 21 million people, with one out of every five inhabitants being old. Since 2015, Vietnam has officially entered the "aging society" category. By 2035, it will be an aged society, with the older population accounting for nearly 20% of the total population, which makes Vietnam one of the fastest-aging countries globally, according to World Bank.
In the ASEAN region, Vietnam has the third largest older population. Since 2000, Vietnam has consistently ranked third in terms of the proportion of older persons, following Singapore and Thailand.
The "Population aging and older persons in Vietnam" report conducted by the General Statistics Office reveals that older persons in Vietnam are now living more independently without their children, especially the older individuals with higher education and experience. The proportion of older persons not residing with their children has increased from 9.68% in 2009 to 13.74% in 2019, and this trend is observed in both urban and rural areas.
Currently, people's attitudes towards nursing homes have changed. Placing parents in nursing homes does not imply a lack of love from their children. In fact, parents also desire to live in communities with old friends and receive daily health monitoring from doctors and nurses.
As a result, there is an increasing demand for long-term care for the elderly in the coming years.
Time to invest in Vietnam nursing homes
The nursing home market in Vietnam is experiencing significant growth potential, as indicated by reports and surveys. Experts assert that the nursing service industry in Vietnam is a promising investment field, given the rising market demand. In 2021, there were approximately 80 private care facilities for the elderly, with only 32 out of 63 provinces and cities having nursing homes, primarily operated by the private sector. The promising future of the nursing home real estate market is driven by the increasing aging population and the relatively low investor interest in this housing segment.
Currently, Hanoi has nearly 20 private nursing homes, while Ho Chi Minh City has fewer than 10. Monthly charges for these facilities range from VND7-8 million ($330-$380) to VND15 million (nearly $700) per person. Upscale nursing homes offer luxurious amenities, private rooms, comprehensive daily care, specialized medical attention, and even funeral services. However, these high-end facilities are not affordable for most Vietnamese individuals. As a result, elderly care is primarily provided at home or through volunteer caregivers, according to Vietnamnet.
Government incentives and challenges in meeting elderly care needs
The Vietnamese government has recognized the need for investment and individual participation in providing caregiving services and tailored goods for the elderly. The Law on Aging 2009 encourages investment from various sources and promotes the production and trade of products specifically designed for the elderly.
By 2025, the government plans to focus on investing in medical equipment, assistive devices for the elderly, smart healthcare, and standardization of healthcare services. To attract foreign investors and enhance the local healthcare and medical industry, the government offers benefits such as income tax exemption for investments in new hospitals, loan benefits, priority land offerings, and financial assistance or land use fee waivers, said Hua Phu Doan, Permanent Vice Chairman of HCMC Medical Equipment Association, in an interview with sourcingcares.
Despite government benefits, Ngoc from Thien Duc Nursing Home talked to Vietnam Investment Review (VIR) highlights the challenge of negotiating rental fees and lease durations. Ngoc explains that although investors are interested in renting land at public nursing centers to enhance their services, these centers are prohibited from leasing land to private investors.
Do Tran Ho Thang, CEO of Dien Hong, the largest nursing home in Hanoi with over 400 beds in 4 centers, echoed the sentiments in talking to sourcingcares, stating that while there are theoretical incentives, especially for land, electricity, and water, implementing land projects in Vietnam is a slow process.
State-run homes for the elderly exist in each of the fifty-eight provinces, primarily accommodating abandoned individuals or seniors in need of financial support.
To encourage the development of nursing home properties, Vietnam needs to establish more regulations that align with the actual situation. The vision of policymakers is crucial, especially considering that the country's population is expected to age rapidly in the future.
The government aims to have at least one nursing home in each province and city by 2025. However, the demand for "housing with care" options, which include various residential formats with integrated care services for older people, remains.
Integrated Care Services for older people
In Hanoi, authorities have launched the "Taking care of the elderly in the 2017-25 period" project to improve the quality of elderly nursing care. The project involves the construction of nursing homes with diverse care services to address the needs of the aging population. The city plans to establish a geriatric hospital, geriatric departments in several hospitals, and pilot an elderly healthcare model in the community, according to Vietnamnet.
The development of the Geriatric Hospital in Hanoi will be based on the existing Dong Da Hospital. Geriatric departments will be established in other hospitals throughout the city, such as Thanh Nhan, Saint Paul, Ha Dong, Bac Thang Long, Van Dinh, and Son Tay hospitals. District-level hospitals will allocate beds specifically for elderly patients. Additionally, each district or town in Hanoi will have a daytime elderly healthcare center operated by private sector investment as part of the project, according to Vietnamnet.
Public-private partnerships (PPP) and private investment are being explored to address the growing demand for elderly care in Vietnam. Hua from the HCMC Medical Equipment Association especially suggests that companies invest in nursing homes by providing their equipment for a free trial. Subsequently, these companies can join the nursing home management system right from the start, which can provide them with a foothold in this market.
The shortage of qualified care workers is another challenge, highlighting the need to improve the skills of nursing staff and learn from foreign models. The legal framework also needs to be strengthened to attract investors and exploit the potential in the sector.
Home care market will grow
However, it is important for nursing homes to consider home-based care, as many older people prefer to be cared for in their own homes. Affordability is a significant factor, with care costs ranging from VND7 million to VND20 million per month. "The demand for elder care is high because no one can go into homes to care for the elderly; currently, only some volunteered doctors and nurses visit seniors at their homes," said Do Duc Chi, VP and Chief of Office of Vietnam Medical Devices Association in another interview with sourcingcares.
"The market for elderly care in the next 10-15 years is very big. Some products that can be used simply at home, such as physiotherapy machines and massage machines, will be very popular," said Do. "There will be many elderly people who cannot be taken care of by their families due to different reasons, but they still prefer to stay at home. Vietnam also needs more companies providing in-home care services or professional caregivers to fulfill this demand in the future."
According to Hoang Duy Cuong, Director and Owner of Cong Ty Tnhh TB CN-VTYT Duy Cuong, which operates eight branch offices throughout Vietnam, specializes in imaging analysis and laboratory equipment for testing. The company mainly sources its products from China and also invests in manufacturing X-ray scanners within Vietnam. He said the demand for healthcare products is exceptionally high in Vietnam, driven by the country's rapid economic growth. With increased income, Vietnamese individuals have more financial resources to prioritize their health. Some of the highly profitable products for his company include blood pressure monitors, blood glucose monitors, and hearing aids.
Vu Manh Tuan, Sales Director of Tan Mai Thanh Medical Equipment-Medicine Instrument, a company specializing in the sale of wound care home care products, including brands such as Molnlycke, Microlife, Omron, Aolike Care, and more, also stated, "The demand for homecare products in Vietnam is on the rise as a result of the trend towards improving social conditions. There is particularly high demand for products such as smartwatches for remote blood pressure measurement, remote respiratory measurement, and prevention of bedsores caused by prolonged bed rest."
Hong Hung Service and Trading Joint Stock Company (HTC Medical), mainly distributes equipment for physical therapy and rehabilitation, emergency resuscitation, operating room, hospital furniture, surgical instruments, home medical equipment, and more also started to pay attention to this market. Nguyen Thanh Trung, Director of HTC Medical, said, the demand for homecare in Vietnam is currently very popular. Many households with middle-aged and elderly individuals have blood pressure and diabetes monitors available at home. “We are engaged in selling these products to clinics and individuals. Additionally, we are focusing on providing rehabilitation products and aim to further enhance our expertise in this segment.”
In conclusion, Vietnam's elderly care sector presents significant opportunities for growth. By leveraging private investment, addressing workforce challenges, and focusing on home-based care, Vietnam can meet the evolving needs of its aging population and create a robust elderly care sector for the future.
sourcingcares attended Medi-Pharm 2023, Hanoi, Vietnam to conduct the 2023 Vietnam elder care market report
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