As criticism of the U.S. healthcare system continues to mount due to its high per capita costs, relatively poor population health outcomes (life expectancy, infant mortality, etc.), and restricted access, comparison of our system to those of other developed countries has become increasingly common.
There have been many attempts in recent years to rank countries’ health systems, but the most notable findings are that these rankings generally don’t even agree about which measures are most important, much less which countries have the best healthcare systems.
To the extent that there is agreement on preferable national fitness systems, many ratings point to systems located in countries much smaller and with more homogeneous populations than the United States (which only ranks among the 10 most sensible of any country). primary assessments and stands out basically for its height of complexity and burden and, on the positive side, for its demonstrated capacity to innovate).
For example, Ezekiel Emanuel’s very intelligent 2020 (pre-pandemic) book, What Country Has the Best Health Care in the World, concluded that the 4 systems are those of Germany, the Netherlands, Norway and Taiwan.
This made me wonder how the American formula compares to those of countries as giant and varied as our nation. This made me think of China because it largely fits this description and because those two countries are the world’s leading political and economic powers.
Additionally, the last company I led as CEO, FastMed, had a joint venture partner that opened clinics in China inspired, first, by the urgent care format we use in the United States. So I had the opportunity to learn more about healthcare in China through our spouse’s first-hand experience as well as other reliable sources.
I’ll be back to the “FastMed China” experience soon, but first here’s a brief review of the Chinese healthcare formula as I understood it.
It is vital to recognize from the outset that the challenge of providing physical care to a country of 1. 4 billion people is nothing short of monumental. To meet this challenge, China’s physical care formula has evolved particularly over the past 50 years, to the point where approximately 95 percent of the population is covered by government-funded health insurance, in a so-called single-payer modality. (compared to about 92% of U. S. citizens ultimately covered by personal and public health insurance. )
That said, there are significant gaps in healthcare in China, specifically in rural and inland areas that are home to approximately 40% of the country’s population. These gaps are basically due to the fact that Chinese provinces have broad discretion to determine policy scope, reimbursement rates, and patient obligations, and policy gaps are rarely covered through personal insurance. , which are supported by less than five percent of the population. Additionally, the most productive doctors and care are provided in hospitals located in urban/coastal spaces.
However, vaccinations are now free for children, and vaccination rates have reportedly exceeded 95 percent for all citizens since 2016.
There are also notable gaps in policy coverage through China’s public fitness insurance, adding to the lack of policies for dental and vision care, intellectual fitness issues (which are highly stigmatized). and long-term care.
Long-term care is also not covered by public insurance in China. While they are also not covered in the US and many other developed countries, the lack of a policy for long-term care is especially problematic in China, as its traditional “one-child” policy has left the country with an aging population and not enough children for themselves. Fund the physical care formula or offer seniors the type of family-centered home care that was typical in the past.
The good news here is that China’s older citizens sometimes seem to be fitter than similar cohorts in the United States. This is at least partly because (I think) older Chinese citizens weren’t as exposed to the ultra-processed foods that caused this sharp increase. chronic diseases in the United States and many other evolved countries. However, it seems that the physical fitness of middle-aged Chinese citizens is negatively affected, as the arrival of Western food materials and the adoption of their gastronomic behavior have been delayed but not deterred.
One of the most obvious characteristics of China’s care delivery infrastructure is that it is extremely hospital-centric, with the vast majority of evidence-based care provided in hospitals (which are designated in three levels, with “Tier 3” hospitals being the most prestigious), and comparatively few primary and other ambulatory care sites (such as FastMed urgent care clinics). One of the effects of this is that access to quality care is restricted and thus long wait times for it are the norm.
Furthermore, because medical care in hospitals is more expensive than in outpatient centers, China does not have a particularly effective delivery formula (although China spends about 6% of its GDP on physical care, compared to about 18% of its GDP). % in the United States). (with now comparable rates of life expectancy and infant mortality).
This not only stresses government budgets, but it has also resulted in the need for Chinese citizens to augment the “single payer” system with significant out-of-pocket expenditures — reportedly 30 percent or more of the cost of care — through high deductibles, co-pays, and co-insurance, as well as through caps on coverage beyond which patients are required to pay all costs.
Another prominent characteristic is that the system has been ripe with corruption, though there is evidence that recent government crackdowns have reduced its incidence. Most physicians are poorly paid (with base pay in the $30,000 per year range), and it has not been unusual for Chinese providers to supplement their incomes by accepting bribes from patients for access and from pharmaceutical companies for prescribing certain drugs.
The result of this endemic corruption is that there is significant distrust of doctors and violence against them is not uncommon. Distrust of providers is exacerbated by distrust of the fitness formula in general, fueled by the government’s high-profile determination to collect fitness knowledge from all its citizens, which may offset much of the fitness benefits of the population that research such a giant knowledge configure enable.
In addition, classical Chinese medicine (“TCM”) continues to be prescribed, specifically at the village level, with World Health Organization reports stating that this occurs in 30-50% of all cases. healthcare in China. Although the effectiveness of those remedies (adding acupuncture, herbal remedies, and cupping) is substantiated in some cases through thousands of years of experience, very few of them have been subjected to the kind of clinical rigor and large-scale clinical trials. scale that are necessary. . Prescription Drugs and Other Remedy Modalities in the United States.
Meanwhile, overprescribing of drugs is common in China, and the Chinese pharmaceutical market is the world’s second largest. However, it is still far behind the U.S., which accounts for approximately 45 percent of the world’s pharmaceutical spending with only 4 percent of its population.
To be fair, it appears that China’s National Health Commission (a government arm created to shift responsibility for healthcare away from the CCP) is making a concerted effort to perceive and address the system’s shortcomings, such as by starting to inspire more doctors to practice. in ambulatory and outpatient care settings.
However, the existing formula is limited by major structural, cultural and behavioral disruptions that obstruct innovation, and the government says it is open to privatization to stimulate innovation and investment; Until very recently, their policies have been ambivalent in this regard.
When I became FastMed’s CEO in 2017, I was intrigued to see that the company had recently entered into a joint venture with an Austin, TX-based company to open and operate urgent care clinics in China modeled after FastMed’s U.S. clinics.
Although I thought the idea had merit because of my knowledge of China’s hospital care style and the resulting long wait times for healthcare, I was concerned about the potential diversion of resources from our number one goal of developing FastMed domestically.
However, I am pleased to know that the joint venture spouse (Pacific Springboard) was led by an old friend, former colleague and entrepreneur named Frank Krasovec, who had abundant and successful experience doing business in China.
I was also encouraged that the company’s leadership team included a very able former FastMed operations executive named Cindy Stefanko, who I had contacted early on in my tenure for background on FastMed’s aggressive expansion in Texas. Because of the resulting faith in our partner, we elected to continue supporting the JV, though under new terms in which FastMed would convey many aspects of its operating model in return for equity but would not invest financially.
Now, almost 8 years later, I recently met with Family First Medical CEO Dr. Neil Smith, who reported that they had replaced their clinic’s call in 2024 from FastMed to avoid the stigma associated with an American brand, and They now have four clinics in Shanghai and Guangzhou, and two more clinics will open in 2025.
While this is wonderful news, it raises the apparent question of why it took so long. The reaction speaks volumes about situations that call for innovation in China, as well as the government’s preference for evolving its formula to achieve the 4 pillars of a “Healthy China 2030”: equity and results; Transformation of health formulas; Technology and Innovation; and environmental sustainability.
As for Family First Medical, Smith reports that early and repeated delays in opening FastMed clinics were similar to the difficulty in obtaining government licenses and the requirement that all clinics operated through foreign entities must have a Chinese partner.
Behind these obstacles was the government’s fear that foreign-owned entities would divert physicians and other healthcare workers (already in short supply) from the public health system and thus exacerbate its well-recognized issues with access and quality. While the domestic partner requirement still made it possible to secure licenses, the leverage it gave to Chinese partners made it more difficult for foreign-owned entities to succeed financially.
However, Smith says the government, sensing a desire to develop the number one non-hospital source of care, recently removed the requirement for a Chinese spouse and is now actively encouraging companies that operate walk-in clinics like Family First Medical to open them. . by granting licenses in just two months.
The number of patients is reported to be high, although Chinese citizens have not yet fully overcome their old trend towards hospital care and that most of their patients have to pay in money because public insurance reimbursements are too low for ambulatory care providers. depend on. However, Smith also says that while in the early years 60% of his patients were foreign visitors and expats, today 90% are Chinese nationals.
Most of this appears to be progress, and we have Chinese government regulators to thank for spotting the need for more outpatient care, and FastMed China investors for staying the course long enough to achieve a return on investment.
So, is China’s health formula different from ours?
By some common outcome measures it is comparable, while being considerably less expensive on a per capita basis. On the other hand, it suffers from access issues (common to many single-payer systems), quality concerns, high out-of-pocket costs, and persistent disparities in the care available to citizens who live in rural areas versus those who live in urban ones (which is also a growing problem in the U.S.).
Perhaps the maximum remarkable thing about the Chinese formula is the progress that has been made. When Mao and the Communist Party got here to force in 1949, life expectancy 35 to 40 years. Today, it has almaximum doubled to 77 years, which is comparable to life expectancy in the United States.
Additionally, there are signs that China’s fitness care formula will continue to evolve tactics that will improve the fitness of its large population for years to come.
I think our formula is yours today, but I’m betting that China will end the gap in the future, as China demonstrates in fitness care, as it has in many other areas, that it has the capacity, resources, and determination to continually improve.
China and the U.S. share common problems, though, including aging populations that are increasingly afflicted with chronic disease, as well as the significant challenges of paying for expensive new treatments and long-term care.
In this sense, our two countries are in the same boat, and our respective leaders will need to embrace change to meet the growing healthcare needs and rising expectations of their citizens.