James Johnstone, co-head of emerging & frontier markets at RWC Partners, looks at the four main drivers of healthcare expenditure in relation to emerging markets.
Healthcare is of fundamental importance for the economic development of emerging and frontier markets.
Since the establishment of the World Health Organisation (WHO) in 1948, governments and regulators have been working to improve the quality and efficiency of healthcare services worldwide.
Understanding the 'technological revolution in healthcare'
But we still see a great imbalance in expenditure both in absolute and relative terms.
Currently, aggregate global spending on healthcare is around 10% of GDP ($9trn), with the US alone accounting for $3.5trn.
According to the WHO, global spending on healthcare will likely increase to $24trn by 2040, with the majority of growth set to come from emerging and frontier markets.
In the early stages of development in healthcare systems, a population usually relies on its own knowledge of hygienic and preventive practices to provide remedies and cures for illness and disease.
As economies and countries develop, more complex treatments become available, leading to a greater involvement of governments and regulators.
Broadly speaking, the gallery above shows the four main drivers of global healthcare expenditure: demographics, disposable income, technology and public policy, with medical tourism also playing a role in some cases.