As China emerges from the coronavirus crisis, important steps must be taken both within the healthcare sector and by the authorities more generally to strengthen systems for prevention and cure.
Some of those will review the specifics of on-the-spot decisions taken in and around Wuhan to determine what else could or should have been done there. But in parallel, we can also expect an ongoing and comprehensive reappraisal of measures needed to improve overall standards of healthcare across the country, with a renewed commitment to investment, training, and extensive use of the latest technology.
“The lessons learned from Covid-19 will make public health one of Beijing’s top concerns and priorities going forward,” says John Woods, chief investment officer, Asia Pacific, for leading international bank Credit Suisse. “It will be a key theme in the coming years. China has the capacity to substantially increase investment, and I think they will focus their spending on therapeutics and medical advances especially for conditions like arthritis, heart disease and Alzheimer’s, which are all growing concerns with an ageing population.”
Woods notes that the recent crisis has shown that, in terms of the adequacy of healthcare infrastructure and expertise, there is still a meaningful gap between China and developed economies. Prior to the outbreak, Wuhan was considered one of the better equipped Chinese cities, with 7.5 hospital beds per 1,000 people against 6 beds per thousand in other parts of China. But the city was still overwhelmed by the virus.
The coordinated response, which saw healthcare professionals supported by clear policy directives, big data and surveillance, did prove effective. However, things could clearly have been much worse in a city without Wuhan’s capabilities, and that knowledge has been a spur to planning and action on a wider scale.
According to Woods, there are five major “takeaways” which highlight where improvements must be made. First is the basic need to increase the provision of public medicine with significant extra investment. Also essential is the expansion of facilities for intensive care, with statistics showing that China currently has 3.8 ICU beds per 100,000 people while the average in G7 countries is 16.6.
Important too is the need to raise domestic production of high-end medical equipment – everything from lab equipment and advanced testing devices to ventilators - thereby reducing dependence on short-notice imports. Another requirement is to increase the number of doctors and other health professionals through enhanced training. In China there are presently 2 doctors per 1,000 people, while the G7 average at 3.7 is approaching twice as many, so by this measure alone there is clearly some way to go.
And, with the help of breakthroughs in technology, there is now tremendous scope to make medical services more broadly available online for early diagnosis, routine consultations, and follow-ups.
“These are all areas China will be focusing on for improvement,” Woods says.
While wary of making an “apples and pears” comparison, he notes that China’s total national health expenditure as a proportion of GDP was 6.6 per cent in 2018. In Germany and Japan, both rich countries with rapidly ageing populations, it was 11 per cent, almost double,
“My point is that China has the capacity to substantially increase investment,” he says. “More broadly, there is a confluence of investment between healthcare, infrastructure, urbanisation and technology that I think will manifest in China in the next few years. I would also highlight that rising longevity will create a developing market for health and life insurance and potentially for some improvement in retirement provision.”
With this mind, Credit Suisse has identified a number of investable themes or “supertrends” linked to China’s healthcare sector and the so-called “silver economy”. These recognise current initiatives plus the spending power and priorities of the over-60s, giving clients a choice of actively managed options with exposure to specific areas.
“Essentially, we are seeing a move in the population pyramid,” Woods says. “In a recent survey, we found that almost 40 per cent of those born in China in the 1960s plan to increase their spending on healthcare. This will feed the demand for improved, higher-end services and insurance, as well as for both public and private investment in related AI, big data and robotics.”
Indeed, in some aspects of “health tech”, China now seems to be leading the way. AI applications are proving a potential game changer in helping to address the shortage of doctors, misdiagnosis rates, and the early detection of chronic diseases and cancers. Hospitals have been quick to adopt a range of AI-assisted products. And traditional healthcare companies, IT heavyweights and start-ups have been investing in groundbreaking ideas and opportunities.
“We should look at health tech as an area gaining momentum post-Covid,” Woods says. “There seems to be a united and unified commitment to offer support. It is still in a test and rollout phase, but the results are encouraging and, in the next five to 10 years, we could see AI applications in healthcare quickly and ubiquitously distributed across the country.”