Insights from the World’s Largest Healthcare Market
New columnist, Jeffrey Frick shares insights on the Chinese healthcare market.
Let me start by welcoming you to my new column. Having been operationally focused for the first half of my career and in global strategic functions for the second half of it, I learned that in order to truly understand local market dynamics, you need to experience it first hand by getting into the lives and behavior of key, local stakeholders.
In my introductory column, I will briefly overview why China is my focus and introduce topics to be explored in future articles. My commentary will be based upon my many years of healthcare experience, ongoing discussions with China stakeholders and direct work on the ground with HAVAS Life clients in China. HAVAS Life is a strategic, healthcare communication agency and part of a unique JV in China. Our JV relationship affords us relationships with KOLs, associations and government agencies that put us on the front-line of China’s healthcare evolution.
So Why China?
An obvious answer if you just consider the size of China’s aging population and the prevalence of chronic diseases. China is still often lumped into the emerging markets category. China is well beyond emerging and is now struggling just like Europe and US to control spiralling healthcare expenditures. China continues to learn from mistakes made by the west as it slowly evolves to improve its own healthcare delivery system.
Healthcare is delivered predominantly through hospitals and funded by the government via a massive social service system. Employers contribute a percentage of an employee’s income to pay for healthcare. Contribution costs differ by province and flexible spending accounts are now possible. Higher paid employees and /or ex-pats are typically offered coverage that allows access to private healthcare providers. Service organizations are emerging to work with employers on expanding employee benefits, including healthcare.
Long hours of waiting to see a doctor for just a few minutes each month with no follow-up outside of the hospital does not provide an optimum environment for care or patient compliance to therapy.
As China struggles to maintain its GDP growth at over 7%, it must also figure out how to pay for the escalating healthcare costs of its citizens. HCPs are significantly underpaid by western standards, with many HCPs income being supplemented by arrangements with pharma companies. China is cracking down on these relationships (the GSK scandal was the most visible) to ensure money being spent will improve patient care and not just the profits of big pharma. These very public investigations and crackdowns have impacted the relationships [pharma has with HCPs and also created patient distrust of HCPs], in particular when it comes to the prescribing of medications.
HCPs are dealing with limited resources to treat patients by rationalizing the care they provide. What may appear as limited understanding of western treatment guidelines is many times a conscious decision by providers to manage care within financial constraints.
From a patient perspective, pursuing the best care for a chronic disease is an emotional, frustrating and many times unsuccessful journey. Long hours of waiting to see a doctor for just a few minutes each month with no follow-up outside of the hospital does not provide an optimum environment for care or patient compliance to therapy.
Digital and social media is emerging as a potential fix to some of these issues facing China’s healthcare market. The digital environment in China is unlike any other market in the world in two areas. The Chinese use of smart phones and the internet for information/ knowledge (including healthcare) and purchases is exploding. One example with respect to purchasing is Singles Day (November 11). Alibaba set yet another new record with over $9 billion dollars in sales (with over 250 million packages to be shipped) on a single day.
On the social media side, the Chinese population acts much more as a collective than other countries in terms of sharing information together whether it is WeChat, Weibo or newer sites. Social media can be a very powerful tool for companies offering unique services of products, but can also be devastating for lower quality products, during missteps or crises. The recent food quality issues with fast food chains and the earlier baby formula scares are just two examples of the power of social media in China.
What next?
In my future columns, topics we will be exploring in greater detail include:
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Patient management outside of the hospital. With very limited government funding for patient disease management or home healthcare, China patients are forced to fend for themselves. We will explore a unique patient management program by a well-known Beijing University hospital that has been developed to overcome the lack of funds for patient management programs.
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Approaches to chronic diseases and expensive therapies. The recent European and US Payer/Government push-backs on the costs of Gilead’s new hepatitis C treatment is an everyday dilemma faced by HCPs in China for more basic treatments; treatments that are considered standard of care in western markets. We will discuss key factors that pharma needs to consider when marketing new treatments in China.
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We will explore various opportunities for pharma MNC companies to work with KOLs, Hospitals, Associations and Government within China to help improve the quality and cost effectiveness of healthcare delivered within China.
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The emergence of private service companies working directly with employers and the Chinese government to help improve the quality of healthcare is yet another topic of discussion. These service companies will become new potential partners for pharma companies in China.
In addition to sharing insights on the China healthcare market, another goal of this column is to generate discussion and knowledge exchange between providers and suppliers of healthcare services and products in China. Please reach out to me and share your experiences and feedback on my column. Also, suggest other topic areas for discussion as well. You can reach me via email at jeffrey.frick@havasww.com.cn
Jeffrey Frick is the General Manager of HAVAS Life of China. With over 25 years of global experience within pharma, biotech start-ups and healthcare consulting, Jeff’s column will provide unique insights from China, comparing and contrasting China’s healthcare infrastructure and delivery to practices in the west - learnings and considerations that will help pharma refine its strategy for success in the future.