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Solidiance's Latest White Paper: China's Healthcare Reforms, Who Will Survive?

22:00 EST 22 Feb 2017 | PR.com

Shanghai, China, February 23, 2017 --(PR.com)-- China’s healthcare market in 2014 was USD 350 million and is projected to surpass USD 1 trillion in 2020 with a Compound Annual Growth Rate (CAGR) of over 19%, showing great growth potential. However, the country’s rapidly aging population is expected to cause significant strain on government budget as healthcare costs continue to rise. To lessen the financial burden, the Chinese government has enforced a series of healthcare reforms aimed at reducing healthcare expenditure.

“China’s healthcare reforms: Who will survive?” is the latest white paper released by Solidiance to give business players an outline of the Chinese healthcare reforms as well as to assess possible impacts on pharmaceuticals, medical devices, and healthcare service providers in China. The key finding of the study suggests that healthcare service providers will gain the most opportunities out of these reforms.

Goal of China’s healthcare reforms

Future healthcare costs resulted by a rapidly aging population will put enormous stress on state budget. To ensure future sustainability and significantly reduce healthcare expenditure in the next 10 years, the government has decided to initiate several healthcare reforms. The ultimate goal of the reforms is to:

1. Establish a decentralized healthcare system by lowering the utilization of level 3 public hospitals through a hierarchical structure. Patients who are looking to get treatment in level 3 hospitals will not be permitted before seeing GP clinics and level 1/level 2 hospitals initially.

2. Boost the development of private facilities. In the coming years, private facilities would be specialized and fill the needs that the public healthcare hospitals currently do not accommodate i.e. post-op care and rehab.

3. Promote the use and future development of GP clinics that are underutilized today.

Impacts of reforms on healthcare players in China

The pharmaceutical industry in China accounts for 40% of total healthcare spending, meaning that this segment will feel the biggest impact of the government’s cost-cutting pressure. The two-invoice policy (fapiao invoicing) set to start in early 2017 will present significant challenges as price cuts will eliminate the mark-up charged by smaller tier 2 and tier 3 distributors, making it difficult to enter hospitals’ drug selection process.

Medical device manufacturers will also feel the same price cutting initiatives given to Pharma companies, although not as significant. The government is pursuing a policy of supporting local companies to strengthen technical capabilities in the high-end device sectors with the goal of ending the monopoly of foreign firms in large medical devices.

With the Chinese government aiming to establish a decentralized and hierarchical healthcare system in the few years, Healthcare service providers are expected to gain the most opportunities in the face of these reforms. Given the high utilization rate in large level 3 public hospitals, the reform pushes to encourage patients to go to General Practitioner’s or level 1/level 2 public hospitals before being referred to level 3 public hospitals.

To download the white paper, copy-paste the URL into the search bar: http://bit.ly/2m2OnvI

Contact Information:
Solidiance
Nadhira Ananta
+62 21 7919 2615
Contact via Email
www.solidiance.com

Read the full story here: http://www.pr.com/press-release/706270

Press Release Distributed by PR.com

Original Article: Solidiance's Latest White Paper: China's Healthcare Reforms, Who Will Survive?

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