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Healthcare in China and opportunities for Finnish technologies

03.07.2017

The healthcare sector in China has faced rapid transformation; however, some unsolved challenges remain on the market. The government has set a target of registering every household with a family doctor by 2020 due to the shortage of general practitioners in China. Also, the distribution of medical and healthcare solutions is uneven – 80% on health resources are concentrated in big or mid-sized cities. The healthcare in rural areas is relatively undeveloped and hard to access. The two emerging consumer groups, the millennials and the elderly, are looking for rather diverse healthcare solutions.

 

 

Rapidly ageing society

China's population of 60+ year olds reached 230.9 million in 2016, setting a huge strain on the healthcare sector. The amount of elderly is expected to grow up to 329 million by 2050. 70% of the elderly suffer from at least one chronic disease requiring more healthcare than they are currently receiving but there is no acute need for visiting a hospital.

Traditionally, younger family members have taken care of their parents but today more Chinese accept elderly homes. The current system still encounters a shortage of aged care facilities, despite a total of 28,000 institutions at the end of 2016. There are only 26 beds in elderly homes per 1,000 seniors, meaning a shortage of 3.2 million beds according to the current demand in China. The Chinese government encourages social funding to dedicate more resources to the ageing care sector and supports the establishment of joint ventures and partnerships.

Growing middle class and millennial spending

China's upper middle-income group will expand from 7.1% of the population in 2015 to 19.7% in 2030. High-income individuals (above €28,000) will account for 14,5% of population in 2030. Rising disposable income and an expanding middle class will see a greater expenditure on healthcare, in particular on specialty care. Expected healthcare spending reaches ¥8 trillion in 2020 and ¥16 trillion in 2030.

The changing lifestyles have led to new kinds of health crises in China. Around 28% of Chinese children will be overweight or obese by 2030, and there are approximately 500 million pre-diabetic Chinese people. Consequently, the health and wellness industry is booming and it is expected to reach a market share of €61 billion by 2020.

China's healthcare market is expected to expand to €96.4billion by 2020 due to digital healthcare solutions. The majority of internet users (95.1%) use smartphones to access digital services. Tech adoption is most prevalent among China's youth; 76.6% of internet users are 39 years old or younger.

Opportunities for Finnish companies

Uncertainty about doctors' expertise, quality of treatments, the system's efficiencies and time spent for healthcare have made Chinese patients discontent. Integrated digital solutions are likely to improve the service level, enhance trust among patients and facilitate communication among professionals for diagnosis and consultation. Private hospitals are seeing an abundance of investment – combined with the increased willingness to embrace foreign tech, the lower bureaucratic barriers, ability to spend and diversified offerings, private hospitals offer great B2B opportunities. China's tech companies involved in health such as Alibaba and Tencent are suitable targets for Finnish companies as they typically have large cash reserves and they are more open to foreign technologies.

Telemedicine platforms have contributed to the accessibility and efficiency of China's healthcare but there are still significant opportunities in digital health. Precise diagnosis and personalized healthcare through big data are likely to become more prominent in the future, as three digital national databases will be established by 2020. Sharing records and information across China's tiered healthcare system still needs to be fully developed, and assistance from experienced companies is welcome.

Elderly-focused products and services targeting hospitals, health service providers or professionals (B2B) are more likely to show higher adoption. As elderly care homes are becoming more accepted, there is need for trained care professionals and efficient processes and tech solutions in care homes. Technologies are appealing to millennials who are willing to try out new healthcare solutions.

 

Contact Info

 

Sari Arho Havren

Consul, Innovation

Hong Kong

+85 26 895 5221

sari.arhohavren@tekes.fi

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