Presented at the 4th National Predictive Modeling Summit in September, 2010

1. Predictive Analytics in the People’s
Republic of China
Rong Yi, PhD
Senior Consultant
Rong.Yi@milliman.com
Tel: 781.213.6200
4th National Predictive Modeling Summit
Arlington, VA
September 15-16, 2010

2. AGENDA
– Basic statistics about China
– Overview of China’s current health care system
– Demand for predictive analytics in China
– Data sources and coding conventions
– Current research and development
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3. Basic Statistics about China
– Rank 2nd in GDP, at $4.99 trillion
• US is first at $14.3 trillion
– Rank 97th in GDP per capita, at $3,677
• US is $46,442, rank 6th using PPP, or 17th using nominal
GDP
– Exchange rate $1 ~ 6.8 yuan
– Annual GDP growth 9%
Source: CIA World Fact Book
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4. Basic Statistics about China’s Health Care
Life Expectancy: 73
Infant Mortality: 14.9
per 1,000
22% world’s
population, 2%
world’s health care
resources.
China’s health care
spending is 4.7% of
GDP.
2/3 of the population
are in the rural area,
supported by only
20% of health care
resources.
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5. 5 September 9, 2010

6. Chronic Disease Prevalence
– Chronic conditions account for 80% of deaths in China
– Hypertension: 18.1% of population (160 mil), increased by 33% in 10
years.
– CVD: 16% (230 mil)
– Diabetes: 9.7% (92 mil) adult diabetes, 15.5% (148 mil) prediabetes.
– Overweight and Obesity: 8.1% children age 7-17, 22.4% adults
– Liver: 15% nonalcoholic fatty liver
Source: NEJM 2010, 2007 China’s National Health and Nutrition Survey, 2009
China’s Cardiovascular Disease Report
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7. 7 September 9, 2010

8. Challenges in China’s Healthcare System
– Demand side:
• aging population
• industrialization, urbanization, changes in natural
environment
changes in lifestyle and social values
changes in disease profile and prevalence in the
population
– Supply side:
• Inequality in resource allocation by geography
• Focus on treatment instead of prevention
• Perverse incentives due to physicians’ compensation
structure
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9. 9 September 9, 2010

10. Healthcare Policymaking
– 14 different ministries and commissions are involved
in China’s public health and healthcare policymaking.
– Key organizations are:
• Ministry of Health
– Rural healthcare, New Cooperative Medical System
• Ministry of Human Resources and Social Security
– Medical insurance for urban workers and residents
• Ministry of Finance
– budget
• National Development and Reform Commission
– Reform initiatives and policy oversight
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11. Healthcare Coverage Types
– Rural: New Cooperative Medical System
• Started in 2003, 100% reach at village level as of 2010
• Voluntary, county level, multiple sources of funding (central + local)
• Basic coverage
– Urban: workers medical insurance and residents medical
insurance
• Workers medical insurance started in 1998
• Residents medical insurance started in 2007
– Private insurance
• Chinese insurers dominant, foreign insurers 5% in market share
• Starting in 2011 foreign insurers are allowed to enter the China
market for individual and group health insurance
– Medical assistance (free care)
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12. China’s Current Health Reform
– Improving the healthcare system is a high national
priority.
• State Council 4/2009 “Notice about Deepening Health
Care System Reform”
– Social welfare, inequality, affordability, healthcare system
insufficiency and inefficiency, resource allocation,
– $124 billion initial investment between 2009 and 2011
– Basic coverage for 90% of the population by the end of
2011.
– More comprehensive coverage by 2020
> MoH “Roadmap to Healthy China 2020”
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13. China’s Current Health Reform
– Reform highlights:
• Investment in
– public hospitals: 2,000 new in 2009-2012
– community health: 3,700 new community health services centers, 11,000
new community health services stations
– traditional Chinese medicine
• private sector allowed to invest in public hospitals or take over the
management
• commercial health insurance supplement basic coverage provided
by the government.
• National drug directory and drug price reform
• Provide coverage for seniors, children and disabled through urban
residents’ medical insurance
• Medical informatics
• Payment reform – DRG, capitation, P4P
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14. Coding and Data Collection
Rural New Cooperative Medical System:
– Ministry of Health, 2005 “Guidelines for NCMS
Information Systems”
• Software development guidelines
• Information Security
• Coding , formatting, data fields
– MoH’s coding of diseases, specialties, provider types, procedure
codes, hospital discharge status, etc.
– All in Chinese. Possible to crosswalk in some categories.
• As basis for reporting and establishing Information
Exchanges
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15. Coding and Data Collection
Urban workers medical insurance
Urban resident medical insurance
Migrant workers medical insurance
– Ministry of Human Resources and Social Security
• Inpatient discharge data with diagnosis codes
• Weak outpatient data. Diagnosis codes often not required.
• Big variations in file layout and detail level by geography
• Defer to local governments on benefits, allowed medical devices
and diagnostic tests
• National Drug List, defer to local governments on additional drugs to
cover and level of benefits
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16. Demand for Better Analytics
Rural NCMS
– Fixed contribution for all age/sex; county level risk pools
Deficit in case of catastrophic events, rare diseases, high-cost patients
Need risk assessment and risk adjustment to set reasonable budget, and
perhaps merge risk pools
Urban Healthcare
– Under utilization of primary care and community health centers;
overcrowding at hospitals for nonurgent care
Reform primary care and community health centers: staffing,
communication with patients, case management, referral, care
integration, capitation
Need risk-based physician payment systems and predictive analytics for
medical management
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17. Demand for Better Analytics (cont.)
Urban Healthcare
– Hospital reform: management & compensation
• DRG pilots in a few hospitals; high priority
– ICD-10 codes.
– weak in claims audit and chart review
– serious concerns about upcoding.
• Contracting with private entities in hospital management
• Private investment and takeovers of public hospitals
– Suqian hospital reform 2000-2006
Need to recalibrate DRGs to China’s data
Need independent quality accreditation
Need best-practice guidelines
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18. Demand for Better Analytics (cont.)
– Chronic disease specific
• Hypertension management and intervention has 50+ years of history in
China
• Identification of early stage or pre-condition population
– HRA tools since 2003 (SARS)
– Comprehensive physical exams
• Disease management or community based chronic disease
management ?
– Public sector: prefers using community health centers for chronic disease
management
– Private insurers: fierce price competition, low margins; interested in pilots and
performance guarantees.
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19. Predictive Analytics Applications
No claim-based predictive modeling at the present time.
Commercial use of scoring methods and HRA tools:
– HRA research committee under China’s CDC
– Proprietary HRA tools developed on China’s data
– Specific scoring tools, e.g., ICU scoring systems, disease-specific scoring
Disease risk prediction models based on health screening data on large
populations
– long range prediction
– Divide factors into short-term and long-term groups, and model short-term
risks first
– Long term risks are modified using long-term factors such as lifestyle and
behavioral factors (smoking, exercise)
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20. Predictive Analytics Applications
Small scale research studies , not yet commercialized:
– DRG feasibility studies
• Based on the Australian & German DRG systems
• Code set modified, but weights are not
• Validated on data from hospitals in Beijing
– Predictions of health care spending using survey data and
regression techniques
• Limited to specific geographic area and demographics
– Neural Network models for predicting medical errors and
malpractice.
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