In providing healthcare to China's vast population, medical services and their supporting administrations are confronting several layers of complexity, folded into one
Demography heightens demand relentlessly with 10 million additional people entering the key population segment of age 40 and above, every year
Better informed patients and development of higher quality medicine feeds higher expectations - and potential criticism for any failure
While economic growth has lifted millions out of poverty, inequality within the newly empowered middle-class cuts deeply in living conditions and access to health services - stressing Chinese society in confrontations between urban life and rural life, between middle-class 'have's and those that 'have-not'
Witnessing the sharp increase in public health spending, statistical evidence supports real public commitment to engage
According to Global Demographics, total health expenditure (private and governmental) reaches 5.3% of total GDP ($683 billion) in 2018, representing $490 per person, up from $194 per person in 2008
However, the 'long tail' of chronic domestic diseases will weigh on the Chinese health system for years to come, which leaves in doubt a projected stabilization of the standard of care
A marginal increase to 5.9% of GDP by 2028 according to Global Demographics may prove optimistic
Bold experiments, integrating Internet applications and medical support, streamlining the healthcare ecosystem in a more efficient and more responsible format, are being rolled out with urgency
In China, an ageing population more prone to health conditions, steadily improving access to health service allowing for better diagnostics and lifestyle changes heightening expectations combine as a major public policy challenge to meet the demands of the growing – and wealthier – middle class and to provide impoverished families with the health services they need
No ifs or buts
Demography in China sets the scene decades in advance and the June 2019 study of Global Demographics, referred to in this note, provides an outline of the challenge
The age group of 40-to-64 is the pivot in coming to grips with health service demands
Mostly ignored by the generally healthy young people, medical conditions tend to build up after 40 and over the following 15 years, before exploding to very high levels
This is also why the 40 to 64 age group is viewed as critical by private insurers, called upon to play a crucial role in addressing China’s healthcare needs
As of 2019, this age group count is approx. 165 million and will grow to 245 million by 2028, before plateauing and sloping downward to 220 million (2033)
The point is, however, that, during the same time span, the 65+ age group is on a relentless growth path, from 106 million (2019) to 167 million (2028) and 225 million by 2033
As understood by the Chinese health services, the population over 40 years of age, potentially exposed to critical disease, will increase by 10 million a year, year after year for the next decade
The greying of China’s population may be a well-known fact of demography, an unbalance visualized in stark terms on the dynamic UN - DESA Population Division chart for the next decades
The numbers remain awesome and the projected statistics of grave diseases (oncology and chronic) no less dramatic
Quoting from the Global Demographics study,
Just focusing on the urban population and the 8 most common cancers the total number of such cases presenting for treatment each year would increase from 1.56 million to 2.6 million between 2018 and 2028. Assuming a survival rate of 5 years this means ongoing cancer treatments would increase from 4.6 million cases per annum to 7.56 million per annum by 2028.
For chronic conditions the number of reported cases for 5 common ones (diabetes, hypertension, asthma and chronic obstructive lung disease, stroke) are projected to increase from 209 million to 336 million. By 2028 there will be 989 million urban persons and assuming those that have at least one chronic condition have 2 (they tend to be less healthy) then 1 in 6 persons will be dealing with 2 or more conditions. That translates into 168 million patients
While the statistical projections might not be final, the trend and the timeline are beyond doubt and governmental policy has been set out accordingly in ‘Major Tasks’, updated most recently in June ‘19
Tackling the healthcare system
Under the title of ‘Deepening the Medical and Healthcare System Reform’, the Tasks focus on
- eliminating the difficulty in getting medical treatment – by more effective allocation of medical resources, a goal which may ultimately assign a large responsibility to the private sector and to Internet-based coordination of services
- lowering the cost of the medical treatments – combining standard policies of centralized procurement and priority given to generics with reform of the medical insurance payment method, which could be understood as encouragement for private insurance schemes as well as streamlining the public fund allocations
- enhancing management of hospitals – the inclusion of performance appraisal signals support for the architecture of cloud-based applications streamlining the demand of the patients with the delivery of health services
At face value, implementation of the ‘Tasks’ is clearly understood to be a long slog involving structural reorganization of the governmental agencies in charge, cost control and alignment of the public service with medical demand
All of which sounds familiar in most developed countries struggling to provide effective – and affordable – coverage to aging population
In China, it can be argued that the challenge takes on a distinct qualitative dimension
Fine-tuning a healthcare system with marginal adjustments would be off-mark, considering the sizable challenge
China’s middle class of well-educated city dwellers, likely to be the most vocal group and the most demanding in terms on health coverage, is growing much faster than the population is aging
According to World Bank statistics, quoted by China Power, China’s urban population has skyrocketed from 19% in 1980 to 58% in 2017 and wages have average an 11% increase year-on-year since 2001
The trend has sharpened revenue inequalities between the great cities of the Eastern coast (with per capita income of $30 000 in Beijing, Tianjin or Shanghai) and landlocked rural provinces ($4 000) with wide disparity between these extremes
Still in the lower band of income on average, China’s middle-class was estimated by the World Bank at 39% of total population (531 million people) in 2013 but, with living standards and incomes wide apart, health coverage by a mix of basic public health insurance and direct billing by private health services is hardly uniform
Taking a decade-long view, the race to address fast growing demand for health care in China cannot be won on the public purse alone
A policy mix, combining free health services to address the most dire suffering with private insurance schemes and strong support for digital health experiments, is gaining momentum
An approach which may inspire health care policies internationally...