BMI View: As the world's most populous country gradually shifts towards universal healthcar e, many commercial players ( pharmaceutic al firms, healthcare providers and medical device manufacturers amongst others ) will benefit from healthcare reform . Despite economic slowdown, China's healthcare system will continue to be well funded both through government funds and the rise in private healthcare . Meanwhile, initiatives to mitigate the inequalities in coverage in less affluent, rural areas will also boost opportunities.
Since the start of the healthcare reform programme in 2009, China has progressively improved healthcare standards and introduced various policies to strengthen the link between healthcare, healthcare insurance and pharmaceutical provision; enhance public healthcare services; further develop medical care to benefit patients; boost the morale of medical professionals by improving working conditions, particularly in rural and remote regions; speed up public healthcare reform; further reduce foreign ownership restrictions in joint venture medical institutions; improve regulation of the pharmaceutical supply chain; and crack down on illegal activities to prevent drug price escalation.
Despite a slowdown in the country's economy, governmental commitment to medical provision will remain strong. Healthcare is a key policy area for Chinese authorities, which will see the sector being more resilient than other industries to the country's economic conditions. China's newly adopted 13th Five-Year plan for the years 2016 to 2020 will reinforce existing trends within the healthcare sector. This includes a reform in the country's health insurance sector to mitigate inequalities in coverage. Reflective of this is the government's commitment to fully integrate China's new rural cooperative medical scheme (NRCMS) with the urban residents' basic medical insurance (URBMI); a landmark move for the country's healthcare system. Cumulatively accounting for 81% of the total population with regards to health insurance coverage, a merger will see the number of reimbursable products and treatments available for the population shift. For example, under the NRCMS, only 800 pharmaceutical treatments were covered, as compared to 2,300 in the URBMI.
Similarly, Chinese authorities will continue to support the growth of the private health insurance sector. Beyond alleviating the cost burden on the government - which will only grow as chronic diseases become a bigger feature of China's epidemiology - a strong private health insurance sector can provide a greater array of products that meet the needs of the country's diverse population. In this manner, private health insurance will provide additional coverage for patients and will provide access to high-value medical services and products. Moreover, the 13th Five-Year plan is heavily focussed towards supporting the country's two-child policy. This marks a shift in China's stance and comes as government officials seek to address the rising number of dependents in the country (expected to increase from 368mn in 2015 to 553mn by 2050). Areas identified in the plan include reproductive health, women's health and child healthcare.
This healthcare plan will augment plans initiated in 2015 to improve a number of key health indicators: increase average life expectancy to 77 years, reduce the mortality rate in children under five to 13%, reduce the maternal mortality ratio to 20/10,000,000, establish a comprehensive and equitable medical and healthcare system and enhance the country's disease monitoring system. The country also aims for health expenditure to account for 6.5-7.0% of GDP by 2020.
People in more developed regions such as Beijing, Shanghai and Zhejiang enjoy better healthcare services in terms of medical staff numbers and hospital beds. In affluent coastal provinces, expatriates' higher disposable incomes also drive demand for private healthcare. In recent years, we have observed the establishment of foreign hospitals in these regions to meet increasing demand for advanced treatments. However, rising medical costs and inequitable access to healthcare services remain the leading concerns of Chinese people, more so than 'declining moral standards' and the provision of social security.
We highlight that healthcare service standards match each province's economic development. Governments try to rebalance the situation by spending relatively more money per-capita in provinces such as Tibet, Gansu, Hainan, Ningxia and Xinjiang where provincial GDPs are significantly below the national average level. Despite this, China's centralised political system has concentrated a significant amount of prime healthcare resources in areas like Beijing and Shanghai. Per-capita government spending on healthcare in direct-controlled municipalities such as Beijing, Shanghai and Tianjin is some of the highest nationally. Meanwhile provinces with large populations, such as Shandong Henan and Hebei, are worse off in terms of per-capita government healthcare spending.
In addition, large-scale pollution has become an inevitable side effect of China's rapid economic growth, and a serious threat to the population's health. Respiratory system disease is the fourth-highest cause of death in both urban and rural China, while pollution is also one contributing factor to more serious conditions such as cancer and cerebrovascular diseases. In December 2015, Beijing issued its first ever 'red alert' over the levels of air pollution, leading to the closure of some schools and factories as well as limits being placed on private car use. Despite historical reluctance to commit to carbon emission reduction targets, President Xi Jinping promised to tackle its pollution issue at the United Nations Climate Change Conference in November/December 2015. Moreover, in April 2016, China agreed to sign the historic Paris climate agreement to cut emissions. However, although the country has invested heavily in renewable energy sources, it is still reliant on over 60% of its power through coal. We therefore believe that pollution will continue to affect the health profile of the population over the short-to-medium term.
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Rich in statistics, charts and maps, this is the one report you need to fully appreciate the China’s diverse regional health environments in the context of neighbouring provinces/states/territories and the national picture.
Written in association with Business Monitor International, this unique report uses data sourced in-house, providing analysis and forecasts from our experts covering key areas such as:
- Healthcare Expenditure
- Healthcare Facilities
- Healthcare Personnel
- Economic Activity
Published by Espicom - experts in the pharmaceutical, medical devices and healthcare field for over 30 years, Espicom’s Understanding China's Regional Healthcare Markets Report brings together a range of often difficult to source information in one single, convenient and comprehensive publication.