China s rising needs and opportunities. George Liu La Trobe University

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1 China s rising needs and opportunities George Liu La Trobe University

2 Healthcare market in China Consumer demands Service capacity Governmental control

3 Healthcare demands Ageing population 122 million 223 million by 2030 People living with chronic conditions (15.7%) Leading cause of death: cancer, heart and cerebrovascular diseases 100+ million diabetes 1.38 million virus hepatitis (2012) Ability to pay Increased wealth Middle class from 29% urban households in 2005 to 75% in 2020 Universal coverage of health insurance Data source: Ministry of Health Franck Le Deu, Rajesh Parekh, Fangning Zhang, and Gaobo Zhou. Health care in China: Entering uncharted waters.

4 Service capacity Primary care Hospital care Aged care

5 0.8 Hospital share in healthcare services Hospitals in outpatient visits Hospitals in inpatient care Data source: Ministry of Health

6 Governmental strategies to meet demands Expanding service capacity Innovation in technologies Cost containments

7 Aged care 33 million needed aged care (2010) Aged care facilities (2010) facilities 3.15 million beds day care centre 450 billion RMB aged care market in 2015 Government scheme covers a small percentage for those without family support Data source: Ministry of Civil Affair

8 Expanding private sector

9 Eligibility of insurance coverage for private providers Depending on local policies, because of devolvement of financial and administrative functions of governments Provincial Municipality County

10 6 5 Health workforce (per 1000 population) Total (per 1000 population) Physician (per 1000 population) Nurse (per 1000 population) 4 3 Doctors in Australia Data source: Ministry of Health

11 Mobility of health workers Doctors may now practice at multiple facilities, including private hospitals, making the best doctors more mobile and easier to recruit.

12 Commercial insurance for catastrophic diseases Purchased by social health insurance schemes is anticipated to pay 50% expenses for catastrophic diseases in the coming years

13 Private Hospitals (doubled in five years) Percentage of private hospitals 27% in % in 2014 Service capacity of private hospitals remains low Data source: Ministry of Health

14 Growth of private health services 0.14 Private/Public Ratio in Hospital Services Data source: Ministry of Health Private/public outpatient Private/public inpatient

15 100 Hospital Bed Occupancy Rate (%) private public Data source: Ministry of Health

16 Opportunities Largest market in the world Fastest growing Doubled in five years Still low in proportion to GDP (5%) Quick endorsement of new technologies High demands for both bio-medicine and CAM $71 billion RMB pharmaceuticals (2011) $13 billion RMB TCM (2011) Data source: Franck Le Deu, Rajesh Parekh, Fangning Zhang, and Gaobo Zhou. Health care in China: Entering uncharted waters. h_care_in_china_entering_uncharted_waters

17 Uncertainties Primary care Low share in market Strong intervention from government Hospitals Strong public band Profit seeking behaviour of public hospitals Aged care Early stage Government low end Private high end

18 Challenges Cost containments may be detrimental to capital and pharmaceutical investments, but it brings opportunities to Information system development Research opportunities Governance and management capacity building Supplementary health insurance

19 Common approach to enter into Chinese market Team up with locals Public private partnership Late entrance may struggle Contribution of top 10 multinational pharmaceuticals in China: 10/70 billion (2011) Data source: Franck Le Deu, Rajesh Parekh, Fangning Zhang, and Gaobo Zhou. Health care in China: Entering uncharted waters. h_care_in_china_entering_uncharted_waters

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