Health Care in China – Expected to Grow a Lot in the Future
Expenditure on health care in China is growing rapidly. A 2015 report by Deloitte said that the yearly expenditure of China is estimated to grow at an average rate of 11.8% per year between 2014 and 2018, reaching $892 billion by 2018. This increased expenditure will mainly be driven by the rapidly growing income of consumers and the public health care reforms by the government.
In spite of these big figures, the health care expenditure of China, at an expected 5.4% of GDP (gross domestic product) in 2013, is much lower than that of OECD countries. China also has a big gap in health care demand because of an aging population, increasing lifestyle diseases, growing urbanization, advancement of universal health care insurance and quickly increasing consumer wealth. While all these components are bringing about overall expansion of health care market, continued growth cannot go further without strong support and heavy investment from the Chinese government.
Therefore, according to MarketinginChina, there is a huge scope for businesses in the health care market in China.
The country experienced a quick economic growth in the last couple of decades after the economic reforms that initiated in 1978. This growth benefited several sectors of the economy. However, this growth was not reflected in the health care system. On the contrary, transition from a central economy to a market-based economy has created problems in the public health sector.
The Chinese government through decades of efforts has created three systems for both rural and urban areas that can provide coverage for over 90% of the population. The basic aim of this universal coverage is to provide effective, safe, affordable and convenient basic medical services to all rural as well as urban residents. Insurance is one of the most important elements of universal coverage. There are three main health insurance schemes, as follows:
The Basic Medical Insurance for Urban Employees
The Urban Employees’ Basic Medical Insurance System was established in 1998. It was the first measure taken for re-establishing health insurance system for urban areas. The UEBMI (Urban Employees Basic Medical Insurance) has been made compulsory depending on employment. It offers medical insurance for urban employees in public as well as private sectors. Local governments, especially municipalities, decide the level of deductibles, reimbursement caps and copayments based on the local economic levels. Finance to the UEBMI is provided by premiums for both employees and employers.
The Basic Medical Insurance for Urban Residents
The URBMI or Urban Residents Basic Medical Insurance covers students of primary and secondary schools (and students in vocational medical schools, professional senior high schools and technical schools) that are not covered by UEBMI, young children and other urban residents that are unemployed.
The New Rural Cooperative Medical Insurance
The NRCM was established in 2003 by the State Council to improve rural health care system. It covered the rural residents on a voluntary basis so as to prevent impoverishment resulted from huge expenses on endemic and infectious diseases.
Technology in Health Care in China
Some really groundbreaking and innovative ideas can make China’s health care system emerge.
One such area to be watched is the online sale of prescriptions though there are a lot of questions regarding this including monitoring and how distribution channels between consumers and businesses will be supervised.
Alibaba has invested a lot in China’s health care sector including the purchase of CITIC 21CN, a drug data establishment, so as to develop an app that allows users to scan barcodes to confirm the authenticity of their drugs. Also the “Future Hospital” plan of Alibaba is an initiative to make hospitals more efficient using cloud computing platform and Alipay.
All in all, the health care sector of China is looking forward to grow a lot in the future. If you are interested in investing in it, learn more about it on MarketinginChina and take an educated decision.