ShortCut: China Detox

SHORT CUT CHINA DETOX How western healthcare systems can slim down according to the Chinese role model Improving healthcare and increasing life expectancy without the costs skyrocketing: China is currently pursuing this goal. The Western healthcare sector should not only take a look at how the Chinese are approaching this task; it would do well to actively participate in the development. This experience can be used to modernize its own, often dogmatic systems and business models and, at the same time, exploit market opportunities in China. High life expectancy without spiraling costs: Is that even possible? Industrial countries in the West have demonstrated how not to reach the healthcare sector’s major goal: The life expectancy in these countries has only increased in very small steps since 2010 – by 0.2 years in the United States and 0.6 years in Germany. In contrast, the health care costs per capita have exploded by around 20 percent over the same period. (see exhibit) with a lack of capabilities on China’s part. In fact, on several occasions, China has adapted and used technological devel-opments at a rapid pace, both to bring about change in its own country and to independently create added value in combination with global marketing. This effect can be observed across many industries: In the area of electromobility, for example, the Chinese manufacturer BYD sold 30 percent more e-cars than Tesla in 2016. With regard to mobile payment systems, an area dominated by Alipay and WeChat Pay, China has reached a transaction volume of 5.5 trillion U.S. dollars – almost 50 times as high as in the United States. And the healthcare sector also shows: China is not just catching up, but rather introducing promising new approaches that could lead the way to the right formula for Western players, too. Novel approaches in medical technology and treatment methods in China question the efficiency of Western healthcare systems while offering opportunities for leaner and healthier structures. And there is no end in sight. Western healthcare systems are still strongly insisting on their established treatment and reimbursement methods. At the same time, the aging process of our society is progressing and the extra cost for the treatment of chronic and multimorbid patients is on the rise. China’s healthcare sector, meanwhile, is facing other challenges: It wants to increase the overall life expectancy, which is currently at 76 years, by a considerable amount through better healthcare provision – despite the fact that typical lifestyle diseases like type 2 diabetes, hypertension and arteriosclerosis are becoming increasingly common and have only been treated to a limited extent thus far. Early treatment is a must have However, Western industrial nations should not equate these supposed deficits COST FEVER IN WESTERN HEALTHCARE SYSTEMS Review 2010-15: Only small gains in life expectancy while enormous increase in healthcare cost/capita. Not any longer a satisfactory model for the aging populations in Europe and North America. HEALTH EXPENDITURE PER CAPITA (€) 8.000 7.000 6.000 5.000 4.000 3.000 2.000 1.000 0 1995 75 76 1995 2015 2000 1995 2005 2000 2000 2010 2015 2005 2005 77 78 79 80 81 82 83 Ø LIFE EXPECTANCY (in years) 2010 2010 2015 2015