Healthcare Services

Integration in ASEAN
Nurul Imlati Haddad
ASEAN Secretariat

Bogor, 5 October 2012

ASEAN Economic Community

Blueprint endorsed by Economic Ministers in November 2007. To
achieve ASEAN Economic Community by 2015.
Goal: integrate through:

Single Market and Production Base

Free flow of goods

Free flow of services
Free flow of investment
Freer flow of capital
Free flow of skilled labour

Competitive Economic Region

Equitable Economic Development
Integration into Global Economy

ASEAN Integration
ASEAN-Russia

ASEAN-Canada
ASEAN-China FTA

ASEAN-EU

ASEAN-Korea FTA

ASEAN-US TIFA

ASEAN-Japan CEP
ASEAN-GCC
ASEAN-Pakistan

ASEANIndia FTA

ASEAN-AustraliaNew Zealand FTA

ASEANMERCOSUR

Benefit of Integration

General benefits:
1. Strengthen domestic regulations
2. Mobility of resources (balancing supply and demand)
Consumer side:
1. More choices of service suppliers
2. Better quality of service
Supplier side:
1. Transfer of knowledge and technology
2. Better access to foreign markets

Service Suppliers

Sector
Professional
Services

Health services

Services

Main Suppliers

Bookkeeping;
document
management;
architectural design;
etc.*

India; Singapore and

others

Laboratory testing;
tele-diagnosis and
consultation
services;
interpretation of
computer
tomography scans*

China; India; Mexico;

Philippines and
others

Source: UNCTAD, World Investment Report 2004

How to Integrate?
Commitments in AFAS

Remove/minimise restriction for the supply of services by

foreigners
8 Packages committed since 1995

Mutual Recognition Arrangements

Nursing and Midwifery (2006)
Medical Practitioners (2009)
Dental Practitioners (2009)

Agreement on MNP (to be signed in November 2012)

Supersede Mode 4 commitments under AFAS

ASEAN Framework
Agreement on Services
(AFAS)

AFAS Liberalisation

Commitments in AFAS
11 Sectors, 155 subsectors to be liberalised (5
healthcare subsectors):

Medical and Dental

Veterinary
Nursing, Midwifery
Hospital Services
Other Human Health Services (ambulance, morphological, chemical
pathology)

4 Modes of Supply:

Mode 1
Mode 2
Mode 3
Mode 4

Cross-border supply
Consumption abroad
Commercial presence
Presence of nat. persons

Mode 1 Cross-border trade

Supply of a service from the territory of one Member into the

territory of any other Member

Example:
Tele-diagnosis of a patient
in Jakarta by a doctor in
Singapore

Mode 2 - Consumption abroad

Supply of a service in the territory of one
member to the service consumer of any other
Member

Example:
An Indonesian patient flies
to Singapore to get
hospital treatment in
Mount Elizabeth
(Singapore)

Mode 3 Commercial presence

Supply of a service by a service supplier of one Member,
through commercial presence, in the territory of any
other Member
Example:
Gleneagles Hospital
(Singapore) establishes its
subsidiary in Indonesia

Mode 4 Presence of natural

persons

The supply of a service by:

A service supplier of one Member, through presence of
natural persons of a Member in the territory of any other
Member

In their own capacity as service providers, professors,

doctors, nurses and other skilled and professional
workers are allowed for movement.
Example:
A Singaporean doctor open
a practice in Jakarta

How the AFAS commitments look?

Schedules specify the extent of liberalisation a Member
guarantees in designated sectors. They are based on the
positive listing approach
Any limitations must be inscribed in Schedules under the
relevant mode(s).
Sector and
sub-sector

I.

Limitations on
market access

HORIZONTAL COMMITMENTS (applies to all subsectors)

3)
4)

II.

Limitations on
national treatment

3)
4)

SPECIFIC COMMITMENTS (applies to all corresponding subsectors)

1)
2)
3)
4)

1)
2)
3)
4)

1)
2)
3)
4)

1)
2)
3)
4)

Additional
commitments

Types of Limitations

MARKET ACCESS:
Limiting foreign service suppliers to enter the local market
- Minimum number of beds in the hospitals
- Maximum number of foreign doctors that can practice in the host country
- Obligation to form a joint-venture with local hospital

NATIONAL TREATMENT
After entering the market, any regulations that treat foreign service suppliers
differently from local service suppliers
- Proficiency of Bahasa Indonesia
- Higher income tax for foreign nurses
- Must reside in Indonesia for at least 5 years
- Can only practice in eastern part of Indonesia

Any limitations must be inscribed in Schedules under the relevant mode(s).

Unbound

= no commitment (full policy discretion) TOTALLY CLOSED

None

= no limitation (full commitment) TOTALLY OPENED

15

Sector description Example 1

Sector or subsector

Limitations on
market access

Limitations on
national treatment

A. Professional
Services

1) None

1) None

2) None

2) None

Clinic of
3) Joint venture with
specialised
foreign equity
medical services
participation up to 70%,
except in Makasar and
Manado up to 51%

3) As indicated in the Horizontal

Section and General
Conditions
The health professionals shall
be Indonesian
Establishment limited to the
capital of provinces in East
Indonesia region

4) Unbound, except as
indicated in Horizontal
Commitments

4) Unbound, except as indicated

in Horizontal Commitments

Sector description Example 2

Sector or
subsector

Limitations on
market access

Limitations on
national treatment

Nursing services
(only for
specialistic care)
(CPC 93191)

1. None

1. None

2. None
3. In East Indonesia region (except in
Makasar and Manado) Joint venture
company with foreign equity
participation up to 49 per cent. In
Medan and Surabaya up to 51%.
4. The nursing services :
shall be provided by persons with
nursing licenses issued by Ministry of
Health of Indonesia and professional
organisation/council
has to be a part/sub-ordinate of a
hospital services
for continuing home care after
hospital treatment
has applied quality audit by Ministry
of Health of Indonesia
the nurse must has a
recommendation as a trainer from
MOH and has certification from
professionals organisation and MOH

2. None
3. As indicated in the Horizontal Section
and General Condition
The health professionals shall be
Indonesian

4. Foreign nurse professionals :

are allowed as trainer/consultant only,
and can not deliver direct nursing
services to patient
must have a valid nursing licenses
issued by Ministry of Health of
Indonesia and health organisation
are obliged to transfer nursing
knowledge and professional
capabilities to Indonesian nurse
shall have at least 2 Indonesian under
studies during hiss/her term
are allowed to work for only 2 years
and can be extended
fluent to speak Indonesian language
both spoken and written in his work

Liberalisation Commitments
No Schedule of Commitments

With Schedule of Commitments

Unbound
Limitations
None

Targets

9th Package

10th Package

Completion Target

AEM 2013

AEM 2015

Number of Subsectors

104

128

Mode 1

None

None

Mode 2

None

None

Foreign Equity

70%

70%

Mode 3 MA Limitations No limitation

Mode 3NT

No limitation

Max 3 limitations

Max 1 limitations

/subsector (including

/subsector (including

horizontal)

horizontal)

Indonesias commitments as of AFAS 8

Subsectors

Pass

Reason

1.

Medical and dental services: Clinic of specialised

Yes
medical/dental services (only for registered health
institution, with 3 sub specialist/super specialist
medical/dental care/more specific than specialist medical
care) (93122)

--

2.

Veterinary Services: Other Veterinary Services (93209)

--

3.

Services provided by midwives, nurses, physiotherapists No

and para-medical personnel: Nursing services (only for
specialistic care) (93191) Line W/120 Line

Foreign Equity only up

to 51%

4.

Y
Y
Y super specialist
Hospital services: Only for specialist
and
medical care/more specific than specialist medical care,
provided by hospital of more than 200 beds) (9311)

--

5.

Yes

Yes

Other human health service:YLimited

toY Residential health No
Y
facilities services than hospital services only (CPC 93193)

Foreign Equity only up

to 49%

ASEAN Healthcare MRAs

Mutual Recognition Arrangement

At the 7th Summit (Bandar Seri Begawan, 5 November 2001),

ASEAN Leaders mandated the start of negotiations on Mutual
Recognition Arrangement (MRA) to facilitate the flow of
professional services under AFAS
An MRA enables professional service providers registered/
certified in its signatory countries to be equally recognised in
other signatory countries
MRA does not warrant unrestricted free flow of foreign
professionals, relevant domestic regulations and market
demand still applies

22

3 Healthcare MRAs

MRA on Nursing and Midwifery Services

signed on 9 December 2006

Implementing bodies: AJCCN (ASEAN Joint Coordinating Committee on
Nursing)

MRA on Medical Practitioners

signed on 26 February 2009

Implementing bodies: AJCCM (ASEAN Joint Coordinating Committee on
Medical Practitioners)

MRA on Dental Practitioners

signed on 26 February 2009

Implementing bodies: AJCCD (ASEAN Joint Coordinating Committee on
Dental Practitioners)

How to Implement the Healthcare MRAs?

OBJECTIVES

Exchange of
Information

Compilation

Adoption of
Best
Practices

Publication
trhough
website

Standardised
Procedures

Capacity
Building

Facilitate
Mobility

Registration

PRAs Process
(Evaluation ,
Registration etc)

Visits

Conferences

AJCC Roles

Better understanding of Domestic Regulations

to develop strategy for Implementing the MRAs
Standardise Procedures /Mechanism
Exchange information
towards harmonisation in accordance with
international standards
Develop mechanism for continued exchange of
information

Exchange of Information

Qualifications (technical, ethical & legal)

Domestic Laws and regulations
Core Competencies
Code of Professional Conduct
CPD (Continuing Professional Development)

Best
Practices

Registration Process
Licensing Process
Recognition of foreign healthcare professionals

Standardised
Procedures

Recognised Institutions
Foreign Professionals Database

Facilitate Mobility

Evaluate qualifications and experience of

nominated foreign professionals
Register and grant recognition to nominated
foreign professionals
Monitor their practice
Take necessary action for any violation to
ensure high standard of practice

Capacity Building

Conferences/ Forums
Visits to healthcare facilities /institutions
Attachments programmes
Countries with developed system assist the less
developed countries through various programmes
Countries in need for capacity building can arrange
local seminars, inviting resource persons from more
developed AMS

Roadmap to Implement the MRAs

Exchange information and expertise in order to promote adoption of best
practices on standards and qualifications

Compilation of required information (Basic Qualifications and/or List of Recognised

Institutions, Domestic Laws and Regulations , Core Competencies , Code of Ethics and
Professional Conduct , CPD , Registration Policies and Procedures, Licensing Policies and
Procedures, statistics and contact details)

Publication of the compiled information through national and ASEAN website

Standardise Procedures

Facilitate Mobility of Healthcare Professionals within ASEAN

Provide opportunities for capacity building and training of healthcare
professionals

Conferences/ Forums
Visits to healthcare facilities /institutions
Attachments programmes
Assistance to other AMS
Countries in need for capacity building can arrange local seminars, inviting
resource persons from other AMS

Malpractice Insurance

Questions & Answers