?The China Opportunity
China has developed at an astonishing rate over the last 30 years however the implementation of effective healthcare delivery across the country has struggled to keep pace with other reforms. As a result, China’s healthcare sector is now facing a wide range of challenges, amongst them: ongoing urban and rural disparity, an ageing population, restricted resources, and out-dated technologies.
The Chinese government recognises these challenges and is firmly committed to upgrading and developing the country’s fragmented healthcare system. In October 2016 the State Council of China issued the Healthy China 2030 report which set out the goal to provide affordable and equitable basic healthcare for all by 2020.
As living standards continue to improve, a rise in household disposable income will also drive growth in China’s healthcare sector. McKinsey & Company predicts that healthcare spending by consumers in China will reach GBP 769.2 billion (USD 1 trillion) by 2020; whilst the Chinese government predicts that spending in the sector will top GBP 1 trillion (USD 1.3 trillion) within the same timeframe. However, even at that level healthcare spending will be a third of that of the United States and will only come to GBP 769.2 (USD 1,000) per person, (compared to GBP 6,858 (USD 8,915) per person in the United States).
These challenges, in combination with increased growth in spending on China’s healthcare and life sciences sector, provide many opportunities for UK companies operating within this area which are seeking to grow their business in China.
Key Challenges to China’s Healthcare Sector
Rapid industrialisation, urbanisation, and an ageing population are contributing to the rise in cases of acute conditions. The treatment burden for heart attacks, strokes, diabetes, and obstructive pulmonary diseases is anticipated to rise by 50% from 2010 to 2030, according to China’s health data analysis. Certain areas of China’s healthcare sector require accelerated development and the government is spending accordingly. In particular, the prevention and control of chronic diseases - such as diabetes, cancer, and asthma – form one of the top seven priorities of China’s healthcare reform by 2020.
The World Health Organisation (WHO) reported in 2012 that China accounted for over 3 million newly diagnosed cases of cancer (almost 22% of the global total) and 2.2 million cancer deaths (27% of the world’s total). In addition, the WHO estimates that around 230 million Chinese currently suffer from cardiovascular disease, and that annual cardiovascular cases will increase by 50% between 2010 and 2030 based on population aging and growth alone. The incidence of diabetes tells a similar story - almost one-in-three global diabetes sufferers today is in China, with approximately 114 million adults afflicted by the disease.
China has around 180 million people aged 60 or over – approximately 13% of the population. By 2042, over-60s are predicted to comprise 30% of China’s population. However services for this growing elderly population are in short supply: the number of beds in nursing homes is estimated to only cover 1.8% of China’s elderly population. In comparison, in many Western countries available nursing home beds generally cover 5%-7% of the elderly population.
In order to prevent and combat these issues, many of China’s 22,000 hospitals need to be upgraded or replaced in the coming years. In addition, the Chinese government is looking at foreign-owned hospitals - the ownership of which was previously restricted or forbidden - as a means to introduce more advanced treatment technology.
Medical Technology: Bridging Urban and Rural Disparities
Despite the swift growth and technological advancement of a number of Chinese companies, China is still widely reliant on foreign countries to supply medical devices, such as X-ray or ultrasound equipment. Meanwhile, the government has pledged to improve healthcare facilities in rural areas by constructing or upgrading 3,700 community hospitals and 11,000 village clinics.
This emerging market provides opportunities rarely present in the developed world. China’s advanced telecommunications sector has facilitated the spread of mHealth, which utilises mobile phones and tablet computers to provide instant access to health services and information – something particularly useful for remote regions. PwC reports that 59% of patients in emerging markets use at least one mHealth application or service, compared to 35% in the developed world.
Opportunities in the Pharmaceutical Sector
In the pharmaceutical sector, obstacles exist for new players. All drugs sold in China have to be registered at the National Medical Products Administration (NMPA) (previously named the China Food and Drug Administration (CFDA), its name was changed on 1st September 2018), and it can take years of testing before a foreign company can promote and sell its products in China. However, there are increasing opportunities for foreign companies to collaborate with Chinese counterparts. The Chinese government is seeking to promote “indigenous innovation”: the encouragement of deals for foreign companies to transfer technology and information to Chinese companies; cooperation in Research and Development; and deals in technology transfer or ‘knowledge exchange’.
The State Council of China’s issuing of the Healthy China 2030 report has entailed the undertaking of healthcare reforms and spending with a focus on five key areas: service delivery; identifying essential medicines; public health; insurance; and public hospital reform.
There have been significant achievements - billions have been invested in infrastructure, equipment, and training. Mark-ups on drugs dispensed at primary care facilities have been banned. An approved National Essentials Medicines list, including price ceilings, has been introduced at state-run primary care facilities with the aim of reducing the prescription of unnecessary drugs and there are plans to roll out the scheme to private providers and hospitals.
Equal access to healthcare has increased. However, China still faces challenges. Chinese citizens continue to risk paying very high health bills. Although insurance coverage is now widespread, it does not cover all costs, and rates of reimbursement remain inconsistent, differing from province to province.
The challenges facing the healthcare sector in China provide many potential opportunities for UK organisations: The UK’s capabilities in healthcare-related goods and services provide an ideal match for China’s national healthcare objectives. It is for this reason that, in recent years, UK-China collaboration in healthcare has received unprecedented coverage by both governments.
The UK has a strong reputation in China for its 70-year experience of running the National Health Service, as well as a reputation for clinical excellence and strong private sector expertise.
Driven by support at a national level, 澳门赌钱网, DIT, and Healthcare UK teams throughout China are progressively identifying opportunities for British organisations across the country, working with open and forward-thinking regions, provinces, and cities to establish frameworks for collaboration.
Healthy China 2030
- , Shanghai, 22-24th June 2020?
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- The report can be found :