HEALTHCARE SCENARIO IN CHINA
China is one of the developing countries, with the second-best economy in the world after USA. It is one among the countries, in progress to rapid advancement in their healthcare sector, in line with the rest of their major industries. Are you looking into investing into the Chinese Healthcare sector? Do you want to know the healthcare status in China?
Through this article, Hospaccx Healthcare Consultancy brings to you the key facts about China’s Healthcare sector and its current scenario.
OVERVIEW OF THE COUNTRY
China, also known as the ‘People’s Republic of China’, is one of the largest Asian countries. In terms of area, China’s land covers at an extent of approximately 9.6 million square kilometers (3,700,000 sq mi), making it the world’s fourth largest country, after Russia, Canada and Europe. It is located on Eastern side of Asia. The country is bounded by Mongolia, Russia and North Korea to the north; the Yellow Sea and the East China Sea to the east; Vietnam, Laos, Myanmar (Burma), India, Bhutan, Nepal and Pakistan to the south; and Afghanistan, Tajikistan, Kyrgyzstan, and Kazakhstan to the west.
China has 33 administrative units directly under the central government. These consist of 22 provinces, 5 autonomous regions, 4 municipalities (Chongqing, Beijing, Shanghai, and Tianjin), and 2 special administrative regions (Hong Kong and Macau).
Beijing (Peking), the capital of the People’s Republic, is also the cultural, economic, and communications Centre of the country. Shanghai is the main industrial city and also the largest city in China. Whereas, Hong Kong is the leading commercial Centre and port.
The Chinese citizen commonly speak the Standard Chinese language. Other languages spoken in China are Mongolian, Tibetan, Zhuang and Uyghur.
DEMOGRAPHIC DETAILS
In 800 BCE, China was inhabited with the largest population in the world, with 13.7 million people. Today as of 2022, China is still ranked as the most populous country in the world, with 1,449,220,680 billion people, based on Worldometer elaboration of the latest United Nations data. The growth rate in the population is estimated to an increase by 0.23% from previous population count of 1,439,323,776 billion.
The country has been in a constant struggle to control the population growth since the 1950’s, when the first line of control measure was implemented, which was a birth control drive. On failure of the first measure, the second line of control measure was taken in the 1960’s, which was the promotion of late marriages and use of contraceptives. Finally in the 1970’s, after the failure of the second attempt, the third and final control measure for population growth, which was more stringent was implemented, which was the ‘One Child Policy’, wherein every family were only allowed to have one child. Since then, the rate of population growth has been consistently lower in comparison to other developing countries like India at 0.95%, Afghanistan at 2.3% and many others.
The Chinese population is equivalent to 18.47% of the total world population, out of which 60.8% of the population live in the urban regions.
HEALTHCARE SCENARIO OF CHINA
The People’s Republic of China has made great achievements in improving health status over the past six decades, mainly due to the government’s commitment to health, provision of cost effective public health programmes, growing coverage of health financial protection mechanisms and investments in an extensive health-care delivery network.
The demographic and epidemiological patterns have transitioned from high birth rate, high death rate, and infectious diseases to low birth rate, low death rate, and chronic diseases. Chronic diseases contribute to 85% of the approximately 10.3 million deaths of all causes each year, accounting for 70% of the total burden of disease in China.
Continuous government input in basic public health services has greatly improved accessibility to public health services. In recent years, China has increased government investments in health and established basic medical insurance to reduce out-of-pocket (OOP) health payments and to raise the accessibility and equity of health services.
However, despite the overall improvement, inequity in health and health care still exists, with gaps between urban and rural areas, between regions of different economic development levels, and between different groups of people, in terms of health care utilization, prenatal care, and catastrophic health expenditure. Consolidating the social health insurance schemes, integrating health providers, reforming the public hospital sector, adopting strategic purchasing mechanisms, and improving the quality of health care are the major current health system reforms in China.
KEY HEALTH INDICATORS OF CHINA
According to the United Nations- World Population Prospects, there has been improvement in the health indicators of the Chinese population, except in the Mean Mortality rate.
- Total Fertility Rate: China’s fertility rate has been inconsistently increasing & decreasing until late 1960’s- 1970’s. After a steep decline in the fertility rate, since 2000, there has been a gradual increase in the fertility rate. In 2022, the fertility rate is at 1.702 births per women, which is a 0.18% increase from the fertility rate in 2021 at 1.699 births per women.
- Infant Mortality Rate: Since 1960’s, the infant mortality rate has been steadily declining. Currently in 2022, China has an infant mortality rate of 8.69 deaths per live births, which is a 3.33% decline from the infant mortality rate of 8.99 deaths per 1000 live births.
- Maternal Mortality Rate: The Maternal Mortality rate has been in a steady decline since the year 2000. In 2020, the maternal mortality rate is at 16.9 per 100,000 live births, which indicates that there is great difference in decline from the previous rate at 29 deaths per 100,000 live births.
- Mean Mortality Rate: From the 1960’s, there was a consistent decline in the mortality rate, but only till the 1980’s. Since 1983 onwards, the Mean Mortality rate has been gradually increasing. In 2022, the mortality rate is at 7.68 deaths per 1,000 population, which is at 1.87% increase from the mortality rate of 2021 which was 7.54 deaths per 1000 population.
- Life Expectancy Age: There has been a steady increase in the life expectancy age of the Chinese population. As of 2022, the life expectancy age is at an average of 77.30 years, i.e males at 72.7 years & females at 76.9 years. This indicates a 0.22% increase from the 2021 life expectancy age at 77.13 years.
THE HEALTHCARE SYSTEM IN CHINA
The country with centuries-long strong practices of their Traditional medicine, today, the Chinese healthcare system is predominately established through the practice of the Western Medicine, which was introduced for over 2000 years, with the robust implementation of the medical theory & practice in the 19th & 20th Centuries. China has a three-tiered system for healthcare delivery in both rural & urban areas:
- In the rural areas, it comprises of health organizations, mainly primary care centres, that operate at county, township, and village levels.
- In the urban areas, healthcare establishments such as clinics, hospitals and health centres are found at municipal, district, and community levels.
According to a survey by Statista, the physician’s and nurse’s density in China has been increasing gradually in the past decade. In 2020, China’s physicians’ density had amounted to 2.9 physicians per thousand inhabitants, while the nurse’s density is 3.35 nurses per 1,000 population. The hospital bed density was around 6.46 beds per thousand population.
There are now about 26,000 hospitals in China, more than in any other country. 60 per cent are public and 40 percent are in the private sector. According to a Health statistics survey by National Health Commission, in 2017, 82% of inpatient care was provided by public hospitals. Thereby indicating that the public health sector is the main healthcare provider.
TOP HOSPITALS IN CHINA
According to a report on “WHAT’S ON WEIBO?”, the following are the top few hospitals across China: –
1) Peking Union Medical College Hospital
This hospital was founded in 1921 by the Rockfeller Foundation. It is affiliated to the Peking Union Medical College and the Chinese Academy of Medical Sciences. It is a 2000 bedded hospital, with more than 4000 employees and 57 clinical and medical departments. Recently, the hospital launched its online services, which includes consultation, medicine prescription and electronic medical records documentation.
2) West China Hospital Sichuan university
It was founded in 1872, with a capacity of 4300 beds and 46 clinical departments. This hospital is ranked as the world’s second largest hospital.
3) People’s Liberation Army General Hospital
Also known as the 301 Hospital, was founded in 1953. This is the largest general hospital, with a capacity of 4000 beds.
4) Ruijin Hospital
This was founded in the year 1907. It is officially known as Guangci Hospital. It has a capacity of 1774 beds, with around 3300 employees and 34 clinical departments.
5) Zhongshan Hospital Fudan University
This hospital was opened in 1937. It is one of the leading general hospitals, known for their treatment services in Heart and Kidney, along with cancer. It has a capacity of 1900 beds with 4000 hospital staff.
According to a report by Asian Hospital & Healthcare Management, China has about 10,000 private hospitals which are operational. Six out of every ten private hospitals provide specialized care. As a result, the private sector is very important when it comes to delivering specialized care such as Traditional Chinese Medicine, maternity services and orthopaedic treatment. There are also hundreds of specialized eye hospitals, dental hospitals, plastic surgery hospitals and rehabilitation hospitals around the country, among others. Several hundred are opening or being upgraded from clinics to hospital status every year.
HEALTH INSURANCE SECTOR IN CHINA
Health insurance in China in 2019 was the fastest-growing category in the insurance industry in China. Health premiums rose by 23% in the first 10 months of 2018. It is expected that health premiums will reach an all-time high of CN¥539 billion (US$81.47 billion) for the year.
China is known for their Public Medical insurance schemes, that can be broken down into three subcategories:
1) Basic cover for urban enterprise employees,
2) Basic cover for other urban residents,
3) and Rural cooperative medical insurance for the farming population.
China’s Health Insurance Market is characterized by two conflicting attributes- nearly Universal Coverage by Public Insurance yet widespread concern about the burden of Medical expenses to individual Patients. Acknowledging the challenges, the Government is increasingly looking beyond Public Insurance for ways to improve the Provision of Medical Insurance.
Expanding the coverage of Public Health Insurance has been among the most striking achievements of China’s Healthcare Reforms. Within less than 10 years approximately 900 million people were enrolled in various Public Health Insurance schemes, extending coverage to more than 95% of Chinese citizens.
Unfortunately, problems remain as China’s rapidly aging population is experiencing the dual burden of a rising rates in Chronic diseases and climbing costs for Healthcare. Although Healthcare is increasingly accessible and sophisticated, its high cost has compelled China’s citizens to hoard cash in their savings account in order to protect themselves and their families against health related emergencies.
DIAGNOSTIC SECTOR IN CHINA
The Chinese In-vitro diagnostics (IVD) Market is central to the provision of healthcare globally, and is estimated to be US$ 18.9 billion in 2027. Besides, China is the largest clinical laboratory market in Asia and one of the world’s fastest-growing medical realms.
The major growth drivers for China’s IVD industry are increasing demand from the middle class for high-quality healthcare products, and rising incidences of lifestyle diseases. In China, there has been massive expenditure in every healthcare segment in the areas of pharmaceuticals, medical devices, and traditional Chinese medicines. The significant barriers for China’s IVD industry is the lagging by local manufacturers in the adoption of advanced technology.
COVID-19 has further accelerated the growth of In-vitro diagnostics industry in China. As China has maintained the zero COVID policy, so in order to achieve that large number of PCR testing and Rapid Antigen tests needs to be performed. Due to COVID variants like Alpha, Beta, Gamma Delta, Delta Plus, and recently Omnicorn, the PCR test and Rapid Antigen tests will keep on happening in huge numbers. According to the publisher, the China In-Vitro Diagnostics Market Size was US$ 7.4 Billion in 2021.
PHARMACEUTICAL SECTOR IN CHINA
The pharmaceutical industry in China has experienced rapid progress since entering the World Trade Organization. The rapid rise of China’s healthcare industry has allowed it to begin the transition from being a pharmaceutical manufacturing base to a strategic R&D hub. As a result, China has positioned itself as a strategic player in the global pharmaceutical market, both as a consumer country and as a platform for establishing greater R&D.
Chinese pharmaceutical manufacturers have largely concentrated on the production of basic chemicals, intermediates and active pharmaceutical ingredients (APIs). In a relatively short period of time, China has become the leading global supplier of APIs in terms of volume.
More recently, Chinese manufacturers have become focused on the development and production of finished pharmaceutical products (FPPs), primarily to serve the domestic market, but with increasing attention to export markets. Chinese pharmaceutical companies are mostly engaged in the production of generics, therapeutic medicines, active pharmaceutical ingredients, and traditional Chinese medicine.
China’s pharmaceutical market comprises of approximately 5,000 manufacturers, a majority of which are small and medium-size companies. For Chinese companies, this fragmentation has kept R&D spending to as low as 5% of sales on average. Although highly fragmented, global pharma and biopharmaceutical players such as Novartis, Novo Nordisk, and AstraZeneca, have a significant hold capturing at least 8-10% of the market. The market is highly dependent on its distributor networks, leading pharma players including Sinopharm and Shanghai Pharmaceuticals have strong control over these networks.
ARTIFICIAL INTELLIGENCE IN HEALTHCARE
According to a report by Omnia Health, China health systems are facing significant challenges to meet the drastically growing medical demand driven by an aging population and growing patient expectation alongside limited medical resources. Lack of high-quality healthcare professionals is another point.
The average misdiagnosis rate in China stands at 30%, and can be as high as 40% for difficult and complicated cases, especially at more basic medical facilities. The application of AI can alleviate daily administrative tasks for healthcare professionals and support them in clinical decisions, improving the patient outcome. All these factors provide an opportunity for AI application in China healthcare.
In July 2017, The State Council of China released the New Generation Artificial Intelligence Development Plan. This policy outlines China’s strategy to build an AI industry worth more than 62 billion US dollars, driving related industry value worth more than 774 billion US dollars by 2025.
CONCLUSION
With the largest population in the world, China strives to improve the efficiency and feasibility of their healthcare systems through healthcare reforms that facilitate increased healthcare financing by the government, create opportunities for public-private partnerships through increased privatization of hospitals, pharmaceutical industries, Insurance companies and the upcoming adaptation for Artificial Intelligence in Healthcare.
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