Apr. 04, 2019
Investment in Malaysian Managed Care Service Companies
Sumitomo Corporation (Head Office: Chiyoda-ku, Tokyo; Representative Director, President and Chief Executive Officer: Masayuki Hyodo) has invested in Health Connect Holdings Sdn Bhd and in PMCare Sdn Bhd, both major Managed Care service companies, which are also called Third Party Medical Claims Administrators (TPA), in Malaysia (hereinafter, “the Investment”).
TPA service companies specialize in management and administration of medical benefits for company employees or insured individuals on behalf of corporations and insurance companies. They work to hold down corporations’ and insurance companies’ medical costs and to make more advanced healthcare services available by screening medical care billing details, ensuring that dosages and hospital stays/visits are appropriate, supporting continued application of medical adherence/medication, and providing appropriate information on medical institutions.
The aging of Malaysia’s population, the increase in lifestyle-related diseases, and advances in medical technology have all caused medical costs to climb in recent years, imposing excessive burdens on patients, corporations and insurance companies. The supply of quality medical services have not kept pace with rising demand for medical care, and people being unable to receive suitable medical services or having to wait for extended periods to be seen by a physician are among the issues that have surfaced.
Malaysia’s TPA market continues to expand as the healthcare market grows and as corporations and private-sector insurance companies face an increasing need to hold down medical costs, and Health Connect Holdings and PMCare combined hold the largest market share in Malaysia in this TPA sector. The Investment will enable Sumitomo Corporation as a go-between for corporations/insurance firms and medical providers in Malaysia, with the view of introducing advanced medical technology/service, to ensure higher-quality and more efficient medical services and to promote improved health management for individuals.
With an eye to the future, Sumitomo Corporation will also be giving consideration to developing a platform for Asian healthcare markets to bring greater sophistication to the managed care (Note 1) business, thereby contributing to local and industry development and laying the foundations for comfortable and exciting living. Sumitomo Corporation aims to introduce Japanese medical and nursing technology/service on this platform utilizing the network of Sumitomo Corporation Group, and contribute to further improvement of Japanese medical service making use of knowledge and knowhow obtained in the Investment.
Sumitomo Corporation’s Medium-Term Management Plan 2020 calls for making greater use of platform businesses and digital transformation (DX) as well as enhancing existing businesses, and for creating businesses that will serve as new primary sources of revenue for the next generation. Having considered the megatrends of the future, Sumitomo Corporation has identified three growth sectors in which it can leverage its strengths to advantage – technology x innovation, healthcare, and social infrastructure – and it will henceforth be actively allocating management resources to these sectors from a future-oriented perspective.
(Note 1) Managed care
Managed care is a system for providing medical care that has spread to countries with relatively small public healthcare systems. Medical services are provided through tripartite collaboration among private insurance companies, TPA services, and medical providers. This scheme aims to promote inexpensive and better-quality medical care as well as to improve individuals’ health management.
■Sumitomo Corporation’s Material Issues
Sumitomo Corporation Group positions “Six Material Issues to Achieve Sustainable Growth with Society” as an important factor in developing business strategies and in the decision-making process for individual businesses. Going forward, we will pursue sustainable growth by resolving these issues through our business activities. This project especially contributes to “Contributing to the Development of Local Communities and Industries” and “Establishing a Foundation for Comfortable and Enriching Lifestyles”.