By Jared Ferrie
YANGON, Dec 3 (Reuters) - Yangon General Hospital was once the jewel in the crown of one of Southeast Asia's best healthcare systems.
These days, hundreds of patients are forced to sleep in corridors of the hulking, colonial-era red-brick building, dogs doze on the floor of the emergency ward and garbage is piled in corners.
It is a scene that Myanmar's reformist government hopes to change as it ratchets up spending on the sector and seeks foreign investment to revive one of Asia's sickest healthcare systems.
Several leading regional healthcare companies are already operating in Myanmar and others plan to enter soon, seeing huge potential in the country's underserved population of about 60 million people.
Attracting foreign investment is part of an overhaul of the healthcare system by the quasi-civilian government that took over from the army in 2011. The administration of President Thein Sein has cut military spending and raised healthcare funding to 3 percent of government spending this fiscal year to March 31, from 1 percent the previous year.
As with many sectors, however, private firms say they are being held back by uncertainty over rules for foreign investors.
The health ministry is drawing up regulations for foreign hospital operators to open facilities in Myanmar independently or through joint ventures, said a senior ministry official, who requested anonymity as he was not authorised to speak to media.
Bangkok Dusit Medical Services Pcl, Thailand's largest private hospital group, sees Myanmar as the company's "first priority for foreign investment", said Chief Operating Officer Chatree Duangnet.
But Duangnet added that the company was waiting for the government to make the investment laws clearer.
Amiruddin Abdul Satar, president of Kuala Lumpur-listed hospitals operator KPJ Healthcare Bhd, told Reuters his company was involved in the management of one hospital already and the government had invited them to expand. The company declined to give further details or reveal the amount of its planned investment.
Singapore healthcare provider AsiaMedic Ltd said in a June statement it had signed an initial joint venture agreement with Five Oceans Service Co Ltd, a Myanmar company, to invest at least $3 million to set up diagnostic scanners in two hospitals in the northern city of Mandalay.
Patients in Myanmar currently have to travel to cities such as Bangkok and Singapore for scans.
A spokesperson for AsiaMedic told Reuters on Nov. 5 that the companies had yet to sign a definitive agreement.
The role private companies will play in the healthcare system remains to be determined, said Hnin Hnin Pyne, a senior human development specialist with the World Bank who is working with the government on healthcare reform.
"How is this going to benefit the poor? For me that is a massive question," she said, adding that the government has set a goal to provide health coverage to all citizens by 2030.
At a Nov. 25 meeting in the capital, Naypyitaw, Health Minister Pe Thet Khin said cooperation between the government and private sector would be key in achieving universal coverage, the state-run New Light of Myanmar newspaper reported.
Hnin Hnin Pyne said the government was still deciding whether healthcare will be free or subsidized.
The healthcare system wasted away during decades of neglect under military rule, so that currently the high price is beyond the means of many in one of Asia's poorest countries, while those who can afford it often seek treatment overseas.
When Aung Myint, 67, was diagnosed with liver cancer in 2005, he went to Thailand rather than be operated on in Myanmar, where a family member had died of tetanus after undergoing a minor operation.
"It was my two sons, both of them doctors, who insisted I shouldn't receive the treatments here," he said.
In 2000, during the dark days of dictatorship, the World Health Organization ranked Myanmar second-last out of 191 countries surveyed for "overall health system performance".
By the 2009/2010 fiscal year, patients in Myanmar had to cover 81 percent of their healthcare costs themselves, the highest of any country in Asia, according to World Bank data. That compared with 56 percent in Vietnam, 40 percent in Laos, 14 percent in Thailand and 35 percent in China.
"Now, because public spending has gone up, out-of-pocket is around 60 percent," said Hnin Hnin Pyne. "That doesn't mean it's not a problem."
Tha Hla Shwe, who became president of the Myanmar Red Cross Society in 2004 after working in the public health system since 1966, said the increased spending was already paying dividends. "Lately, I would say it's improving quite drastically," he said.
Aung Myint Lwin, the senior administrator of Yankin Children's Hospital in Yangon, said increased funding has meant his 550-bed hospital can now supply drugs free of charge to patients who can't afford to pay.
He said he hoped the hospital would one day be able to provide free medical care to every child who visits the hospital.
"That is our dream," said Aung Myint Lwin. "In the near future I believe the dream will become true." (Additional reporting by Minzayar Oo and Aung Hla Tun in YANGON, Yantoultra Ngui in KUALA LUMPUR, Eveline Danubrata in SINGAPORE, Manunphattr Dhanananphorn in BANGKOK; Editing by Alex Richardson)