China to Inject Billions in Health Care by 2020

Kenneth Jarrett is chairman of APCO Worldwide’s Greater China region and former U.S. consul general in Shanghai.

This post originally appeared in Healthscope Asia.

Exciting news arrived for China’s health care system with the recent release of the “Healthy China 2020” report. The report, which took 400 experts over three years to develop, was led by China’s Ministry of Health (MOH) and provides a roadmap for China to overcome some of the key health challenges facing the country. Goals to be achieved by 2020 include, for example, establishing a system that ensures basic health care for all; improving key health indicators such as life expectancy (increase to 77 years); and curbing factors that lead to chronic diseases.

While China has made exceptional strides in healthcare (in the early 1970s, life expectancy was less than 62 years — today, life expectancy is near 75 years and rising), challenges remain. Access to good health care is difficult, with underpaid doctors, high drug costs and long lines at hospitals. In addition, as China develops, lifestyle-related diseases are increasing, with 17 million new chronic disease patients each year. China’s rapidly aging population presents another key challenge as the share of the population aged 65 years and older will increase from 8 percent today to about 14 percent in 2025.

The “Healthy China” report outlines a total of RMB 400 billion (USD 63 billion) in funding to be allocated across seven key health care projects, including infrastructure, supplies, training, technology, and more:

The report also calls for increasing health sector expenditures to 6.5%-7% of China’s Gross Domestic Product (GDP). While national statistics show that public health expenditures increased to more than 5% of GDP by 2009 (from less than 2.5 percent of GDP in the early 1970s), this number fell to 4.71% in 2011, and remains far behind the of 8.1% average of developed economies.

Yet, with regards to the highly-publicized RMB 400 billion figure, outreach by APCO’s health care team leads us to the conclusion that the figure is only speculative and based upon adding up each of the individual requests made within the seven key projects. Regardless, the report is likely to provide a much-needed blueprint for China’s central, provincial, and municipal decision makers for developing and executing specific policies across the health care spectrum.