When you enter the Beijing hospital “General Hospital of the People’s Liberation Army”, you will not be welcomed by hospital personnel but by robots manufactured by Xiaomi. If you live in a more rural region of China or if you need a doctor at a late hour, digital consultation hours can be held via apps or digital hospitals in which initial diagnoses and electronic prescriptions can be made.
After a diagnosis – via telemedicine or in hospital – you receive social media feeds that not only provide individualized advertising for suitable dietary supplements or insurance offers, but also health-related fitness and nutrition tips. The latter services are made possible by the Health Tech Unicorn WeDoctor. This start-up was founded in 2010 by AI expert Jerry Liao in Xiaoshan, Zhejiang, and was valued at 5.5 billion US dollars in 2018. The company, of which one of the shareholders being Tencent aims to bring the state, hospitals, doctors, pharmaceutical companies and financial institutions together in order to offer the Chinese population innovative and holistic health care.
Tech giants push innovative healthcare solutions
In addition to the traditional players in the health care market such as insurance companies, medical technology companies, and hospitals, the following examples illustrate how start-ups and digital companies such as Alibaba and Tencent are increasingly influencing health care in China. A further example: Online platforms such as JD.com can sell medicines faster and have a greater reach than traditional pharmacies due to the existing comprehensive logistics network and thus enable faster distribution of medicines. Digital health services and the use of robotics and artificial intelligence in patient-care is already more widespread in China than in Europe or the USA. This increasing digitalization of the Chinese health care market and the openness of nearly 1.4 billion strong Chinese population to e-health solutions with data processing also represents an opportunity for German companies in this rapidly developing market.
According to the World Bank, the Chinese population reached an average life expectancy of 76.2 years in 2016 upon birth, compared with 43.7 years in 1960. Whereas in 2005 only 50 percent of the population had health insurance, by 2016 the figure had already reached 95 percent. With this rapid race to catch up in health care, the health care sector is also experiencing double-digit growth. According to the national figures, the Chinese health care market will reach a total of 1200 billion US dollars by 2020.
Strong Government spendings and harmonisation of standards
Such rapid development is being driven by various government programs, including the Chinese government’s spending of 124 billion US dollars on the 2009 programs (“Extending Insurance Coverage”, “Establishing a National List of Drugs”, “Improving Primary Care”, “Promoting Equal Access to Care and Piloting Reform Programs for Public Hospitals”).
The figures speak for the success of these programs: According to national statistics, China’s total expenditure on health care quadrupled between 2007 and 2017 (2007: USD 172.3 billion, 2017: USD 782.9 billion). The share of government spending increased from 22 percent to 42 percent. Although this led to a reduction in private spending on health care from 44 percent to 29 percent (2017), many patients still cannot afford comprehensive health care. The scope of health insurance services is still loss-making. For a large number of drugs, such as cancer drugs, the costs still have to be borne by the patients themselves.
According to the World Health Organization, 89 percent of deaths in China are due to non-communicable diseases such as cancer, diabetes, and obesity, making this a horrendous challenge for the Chinese population. In October 2015, President Xi Jinping launched the “Healthy China 2030” strategy to combat these problems and further promote health care in China. The strategy aims to improve national health care by 2030, control major health risk factors, expand the capacity of health services and the reach of the health industry, and reform the health system in general.
In March 2018, the National Health Commission was established as an important institution for the implementation of the Healthy China 2030 Strategy. Concrete measures being driven by the Commission include promoting the innovative power of Chinese companies, developing a multi-level, integrated health care system, reforming hospital management, standardizing billing procedures, accelerating approval processes, strengthening quality management and monitoring systems, to name but a few. The funding provided under these programs thus increases the attractiveness of the market for foreign companies.
High demand for high-tech innovations from the West
Although China is now the second largest pharmaceutical producer in the world after Japan, German exports of medical products grew by 8 percent in 2017 (GTAI 2018). The high demand for foreign preparations has prompted the state to completely waive customs duties on imported pharmaceuticals since 2018. In addition, particularly innovative and important medical devices for China can be registered by express approval (duration: on average 8.5 days). The import of devices for imaging diagnostics, vascular intervention, rehabilitation, and in-vitro diagnostics as well as orthopaedic materials are still very popular as no competitive products are yet available on the Chinese market. There is also a great need on the Chinese market to do better in the area of training and further education of medical specialists – and thus a great opportunity for German-Chinese cooperation.
Thanks to German expertise and experience, qualified doctors and nurses are being trained in China using modern technologies and high-quality educational programs. The German government is currently already promoting the training of specialists in geriatric care with private and state partners in China as part of the “Sino-German-Eldercare-Project”. With the upgrading of the digitization sector in the Federal Ministry of Health, closer cooperation with China has also come to a step closer. Germany, for example, could learn from China how to implement a country’s collective interest with digital technologies in the course of the soon nationwide introduction of health records and health cards. Furthermore, the Chinese and German health care systems face similar challenges, such as the treatment of chronic diseases such as cancer and diabetes or demographic change with an aging society. If the expertise from Germany and China are combined together, adequate solutions to these challenges could be found quickly.
Translated into the English language. The original article can be found here.