TOKYO -- Japanese trading house Sumitomo Corp. will invest in a major health care intermediary in Vietnam, looking to launch new digital services in a region facing rising costs and uneven access to doctors.
Sumitomo is expected to invest tens of millions of dollars in Insmart, part of the region's growing managed-care industry.
Private health insurance is the norm in Southeast Asian countries where publicly funded health care systems lack scale. Managed-care companies serve as intermediaries between insurers and medical institutions as well as provide services to patients. Insmart holds a 60% share of Vietnam's managed-care market, with 1.5 million customers.
As Southeast Asia's population grows, demand for managed-care services to help tamp down ballooning medical costs is expected to rise rapidly. The market is forecast to expand by an average of more than 20% annually in Vietnam and over 10% in Malaysia.
Managed-care businesses handle tasks for insurers such as assessing whether medical expenses are appropriate, along with processing claims and payouts.
On top of this, Insmart offers a range of services to consumers, including online prescriptions as well as referrals to health care providers and access to medical records and medication information via its app.
Sumitomo plans to further expand the app's services to include telemedicine along with medication counseling and drug shipping.
The trading house will use the expertise gained since its 2019 investment in Malaysian insurance administrators Health Connect Holdings and PMCare, which together have about 3 million customers. Sumitomo turned both companies into wholly owned subsidiaries this past March, and added telemedicine and drug prescriptions to their apps.
Sumitomo plans to buy shares both from Insmart's founder and a placement of new stock, and will consider eventually converting the company from an affiliate into a subsidiary.
While telemedicine has failed to catch on in Japan, partly because of privacy concerns, countries elsewhere in Asia have been quicker to adopt online doctor visits. Japanese trading house see such overseas markets as promising places to roll out new services and gain know-how.
Mitsui & Co. jumped into managed care in Malaysia this year with an investment in startup MiCare HealthTEC Holdings, one of the country's two main players, which also operates in Thailand and the Philippines.
Mitsui -- already the top shareholder in IHH Healthcare, Asia's largest private hospital group -- plans to use big data analysis to improve the profitability of its medical operations. The trading house looks to double the segment's earnings before interest, tax, depreciation and amortization from fiscal 2020 levels to 110 billion yen ($1 billion) by fiscal 2025.
Toyota Tsusho in March announced an investment in startup Cross Sync, which is developing a system that uses artificial intelligence to help monitor patients in intensive care units around the clock, looking to bring the technology to a hospital it operates in India and other countries.