Rashad's Analysis of China's Healthcare Economics
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China's healthcare spending has grown faster than GDP in recent decades. However, China still spends much less than other nations on healthcare per capita. China also lags in several health outcomes compared to other countries. The fee-for-service model in China may incentivize overspending. To improve its system, China could reform payments and invest more in public health prevention.
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Rashad's Analysis of China's Healthcare Economics
- 2. Economy – Melanie Morgan Healthcare Economics – Rashad Abdul-Salaam Healthcare Policy – Nikki Giwa-Layeni Healthcare Challenges – Elizabeth Steffen Future Strategy – Sun C. Lee
- 4. Economic Resource Health Demographics Allocation Statistics • How Much Does • Where is Money • What is the China Have? Spent/What Chinese Does it Buy? Healthcare ROI?
- 5. Healthcare Expenditure per Capita (in US$), 2007 $8,000 $7,290 $7,000 $6,000 $5,000 $4,763 $3,601 $4,162 $3,895 $3,601 $4,000 $3,763 $3,588 $2,984 $3,000 $2,000 $1,000 $148 (2008) $0 Public Private Source: http://www.oecd.org/dataoecd/5/34/43800977.pdf
- 6. The Growth of NHE and GDP（1978-2004） GDP NHE 25 20 19.47 15.28 Percentage 15 9.5 10 10.57 7.6 5 0
- 7. Yip W , Hsiao W C Health Aff 2008;27:460-468 ©2008 by Project HOPE - The People-to-People Health Foundation, Inc.
- 8. Nurses and Hospital Hospitals Physicians Midwives beds China 13,119 1,862,630 1,259,240 30/10,000 US 5,010 793,648 2,927,000 31/10,000 World Health Organization 2009
- 9. % Total Health Expenditure (THE) on Pharmaceuticals Devel'd Nations Pharma Other 15% Total Pharma 85% Expenditure as %GDP China Pharma Other 40% 60% Source: OECD, 2007 and China MoH, 2007
- 10. % Population Obese, 2009 Obese Adults in millions 200 100 18 2005 2010 2015 (est.) 30x 0% 10% 20% 30% 40% OECD 2009 Health Data Report
- 11. USA: 11.1% China: 9.7% USA: 6.8% China: 2.5%
- 12. Infant Mortality (Deaths per 1,000 Births), 2010 30.00 25.00 Sing (1) 20.00 Japan (4) Germ (14) 15.00 Switz (15) 10.00 UK (31) US (44) 5.00 China (117) 0.00 2003 2004 2005 2006 2007 2008 2009 2010 Source: CIA World Factbook
- 13. Age 86 84.36 2009 Statistics 84 82.12 82 80.85 80 79.26 79.01 78.11 78 76 74 73.47 72 70 68 Macau (1) Japan (3) Switz (11) Germany (32) UK (36) US (48) China (N/A) Countries (rank of 100 total) Source: CIA World Factbook
- 14. 2002 Statistics CA Cancer J Clin 2005; 55:74-108
- 15. • Take-home Message: – China’s healthcare growth outpaces GDP growth by almost 10% annually – Fee-for-service incentives warp healthcare cost- structure, driving individual spending – China ranks very low in a number of health statistics compared to other industrialized nations – China would benefit from a change in fee- structure, and investment in public health
Editor's Notes
- -One of the lowest per capita healthcare expenditures in the world (rule of large numbers)-4 drivers of cost-inflation: 1) growing middle-class, 2) increased utilization by urbanization, 3) less exercise/higher fat diet, and 4) growing aging population ~100M in 10yrs
- -Out-of-pocket individual composition has increased ~20% to ~60% over 24 year period-Gov’t contribution has decr’d from ~25% to ~19%-80% of Gov’t health expenditures go to urban areas, even though only 45% of the population lives in these areas-Currently about 9-10% of individual income allocated to healthcare; expected to grow to 16% by 2025
- Transition: Resource Allocation-Despite China’s large population, aspects of its health-sector human capital and infrastructure are lacking in proportion-80% of Gov’t health expenditures go to urban areas, even though only 45% of the population lives in these areas
- -Due to fee-for-service incentives for China’s physicians and hospitals, out-of-pocket costs on pharmaceuticals are close to 3x that of other developed nations-<10% of hospital income comes from Gov’t, the rest comes from fees-U.S. pharma expense as %GDP ~2.1%; T.H.E. ~13%
- Transition: Health Statistics-20% of world’s obese people are Chinese-China’s obesity rate as a percent of population is about 7%, relatively low, but the rate of growth in obesity is climbing fast-The causes and correlations of obesity in China seem to be the opposite of many industrialized nations, where the poor are usually the most obese (e.g. the growing middle-class makes up the majority of growing obese in China)-Childhood obesity in China is also a major issue, as the rate has jumped 30-fold b/w 1985-2000-One-child policy leads to six pocket syndrome: 2 parents, and 4 grandparents lavishing food and amenities to 1 child
- -Rising diabetes rates go hand-in-hand with the rising obesity rates-Approximately 3,000 new Type II diabetics are said to be diagnosed per day
- -China’s infant mortality has consistently been ~10x higher than other developed nations, but it is trending downward-Very high infant mortality when compared to other industrialized nations (normalized for deaths <1 year-old/1000 births)-Clearly an area for China’s healthcare investment
- -Comparative low LE, despite China’s healthy diet and culture of physical activity-Age increase has grown the slowest of developed countries, 2nd only to the US
- -Become #1 killer since the ‘90s; Despite large population, cancer rates are not excessively high-One of highest in world in Stomach, Liver and Esophageal cancers-Breast cancer up 37% in last 10 years; estimated to reach 2.5M by 2021-Cancer rates expected to grow dramatically particularly in rural areas due to pollution, and in urban areas due to adoption of Western diet
- -The data seems to point to the need to change China’s healthcare fee-structure/system-Nikki will now explain some of the prior changes in China’s system that brought the country to this point