As complaints about the American fitnesscare formula increase due to its high level of capita costs, poor physical fitness outcomes of the population (life expectancy, infant mortality, etc. ), and its limited access, the comparison of our formula with those of other evolved countries has become increasingly common. become more and more frequent.
In recent years many attempts have been made to classify the fitness systems of countries, but the most notable effects are that these classifications do not agree even on the maximum vital measures, much less on which countries have the fitness systems. more productive physics.
To the extent that there is agreement on which national fitness systems are preferable, many ratings point to systems located in much smaller countries with more homogeneous populations than the United States (which is not among the top 10 most sensible in either country). . and stands out basically for its height, complexity and load and, on the positive side, for its demonstrated ability to innovate).
For example, Ezekiel Emanuel’s very clever 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 has led me to wonder how the American formula compares with those of countries as giant and heterogeneous as our nation. It made me think of China because it largely fits that description and because those two countries are the world’s leading political and economic leaders. powers.
In addition, the last company I led as CEO, FastMed, had a joint venture partner that has opened clinics in China initially modeled on the urgent care format we used in the U.S., so I have had the opportunity to learn about healthcare in China from our partner’s direct experience, as well as from other reliable sources.
I’ll return to the “FastMed China” experience shortly, but first here’s a brief review of the Chinese healthcare formula as I understood it.
It is important to acknowledge at the outset that the challenge of providing healthcare to a country with a population of 1.4 billion is nothing short of monumental. To meet this challenge, China’s healthcare system has evolved significantly over the past 50 years to the point that roughly 95 percent of the population is covered by government-sponsored health insurance in a form generally referred to as single-payer (vs. roughly 92 percent of U.S. citizens currently covered by private and public health insurance).
That said, there are significant gaps in healthcare in China, specifically in rural and inland spaces 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 in determining policy scope, reimbursement rates, and patient obligations, and gaps in policies are rarely covered through personal insurance, which is supported by less than five percent of the population. In addition, the most productive physicians 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 Chinese public fitness insurance, adding to the lack of policies for dental and vision care, intellectual fitness situations (which are highly stigmatized), and care in the long term.
Long-term care is also not covered by public insurance in China. While they are also not covered in the U. S. 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 without enough children for themselves. Fund the physical care formula or offer seniors the kind of family-centered home care that was typical in the past.
The good news here is that China’s older citizens sometimes appear to be fitter than similar cohorts in the United States. This is, at least in part, because (I believe) older Chinese citizens were not 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 appears that the physical fitness of middle-aged Chinese citizens is negatively affected, as the arrival of Western food materials and the adoption of their eating behavior has 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.
Additionally, because healthcare in hospitals costs more than in outpatient settings, China does not have a particularly effective delivery formula (although China spends about 6% of its GDP on healthcare, compared to about 18% in the USA). . with now comparable rates of life expectancy and infant mortality).
This is not a strain on government budgets, but has also led to Chinese citizens having to supplement the “single payer” formula with significant out-of-pocket expenses (reportedly representing 30% or more of the cost of care). through maximum deductibles. copay and coinsurance, as well as policy limits above which patients must pay all charges.
Another striking feature is that the formula is riddled with corruption; It appears that the government’s recent repressive measures have reduced its incidence. Most doctors are poorly paid (with a base salary of around $30,000 a year), and it is not unusual for Chinese providers to supplement their source of income by accepting bribes from patients to access them and from pharmaceutical corporations to prescribe certain medications.
The result of this endemic corruption is that there is a significant distrust of physicians, and violence against them has not been uncommon. Exacerbating the distrust of providers is a distrust of the healthcare system generally due to the government’s well-publicized determination to collect health data on all its citizens — which may be counter-balancing much of the population health benefits that analysis of such a large data set should enable.
In addition, Traditional Chinese Medicine (“TCM”) continues to be frequently prescribed, particularly at the village level, and World Health Organization reports claim that it is involved in 30-50 percent of all healthcare in China. While the efficacy of these treatments — including acupuncture, herbal remedies, and cupping — is backed in some cases by thousands of years of experience, very few of them have been subjected to the kinds of scientific rigor and large-scale clinical trials that are required of prescription drugs and other treatment modalities in the U.S.
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 CEO of FastMed in 2017, I was intrigued to see that the company had recently signed a joint venture with an Austin, Texas-based company to open and operate urgent care clinics in China along the lines of American FastMed 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 glad to be informed that the joint venture spouse (Pacific Springboard) was run by an old friend, former colleague and prominent businessman named Frank Krasovec, who had abundant and successful business experience in ChinaArray.
I was also encouraged by the fact that the company’s leadership team included a highly capable former FastMed operations manager, Cindy Stefanko, whom I contacted early in my tenure for data on FastMed’s competitive expansion into Texas. Due to the resulting trust in our partner, we decided to continue the joint venture, but in new situations where FastMed would convey many facets of its operating style in exchange 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 have replaced his clinic’s call in 2024 from FastMed to avoid the stigma to an American brand, and that they now work 4 clinics in Shanghai and Guangzhou, and two more clinics will open in 2025.
While this is great news, it begs the obvious question of why it has taken so long. The answer says volumes about the challenges of innovating in China, as well as the willingness of government authorities to evolve their system to achieve the four pillars of “Healthy China 2030”: Equitable access and outcomes; Healthcare systems transformation; Technology and innovation; and Environmental Sustainability.
As it pertains to Family First Medical, Smith reports that the early and repeated delays in opening FastMed clinics were related to the difficulty of securing government licenses and the requirement that all clinics operated by foreign entities had to have a Chinese partner.
Behind those obstacles was the government’s concern that foreign-owned entities would divert doctors and other fitness staff (already in short supply) from the public fitness formula and thus exacerbate its well-known access disorders. and quality. Although the requirement for a national spouse still made it possible to download licenses, the influence it gave to Chinese spouses made it more difficult for foreign entities to be financially successful.
However, Smith says authorities, sensing a desire to expand non-hospital primary care provision, have recently removed the requirement for a Chinese spouse and are now actively encouraging companies that operate outpatient clinics like Family First Medical to open them. . through the granting of licenses. in just two months.
He reports that patient volumes are generally strong, though Chinese citizens have yet to completely overcome their longstanding bias towards hospital-based care, and that most of their patients must pay cash because public insurance reimbursements are too low for ambulatory care providers to depend upon. However, Smith also states that while in the early years, 60 percent of their patients were foreign visitors and ex-pats, today 90 percent are Chinese citizens.
Most of this progress appears to be progress, and it’s a credit to Chinese government regulators who have identified the need for more outpatient care and FastMed China investors who have stayed the course long enough to start making a return. of the 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 most remarkable thing about the Chinese formula is the progress that has been made. When Mao and the Communist Party came into force in 1949, life expectancy was 35 to 40 years. Today, its maximum has doubled to 77 years, which is comparable to life expectancy in the United States.
Additionally, there are signs that China’s fitness formula continues 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 United States, however, present not unusual problems, such as aging populations affected by chronic diseases, as well as significantly demanding situations when it comes to financing expensive new remedies and long-term care.
In this regard, our two countries are in the same boat and our respective leaders will have to adapt to meet the growing desires for physical attention and the growing expectations of their citizens.