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China’s Covid Wave drives consumer interest in health insurance

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Chuiyangliu Pictured in hospital January 2023 BeijingAccording to official estimates, there has been a six-fold increase of daily patents from 4,000 per day to 5,000 per day over the past few years.CNBC

Yin Hon Chow | CNBC

BEIJING — At For anyone in their late 20s and beyond, this is the best place to shop. China It is all about health, sport and well-being. That’s According to an Oliver Wyman Survey taken in the second half of last year China Finally, it was over. Covid controls.

For 47% of respondents said they planned to spend more on this health category. December They intend to spend more money on health insurance. That’s As high as 32% OctoberThe report stated that.

“There’s a much higher health concern after this latest wave, but after the entire pandemic the health consciousness of the Chinese consumer has increased a lot,” Kenneth ChowPrincipal at Oliver Wyman.

Even The survey revealed that health is the second most important factor for young adults in their twenties. The The study ranked each category based on the percentage respondents said they planned to spend more money on each item and the percentage that respondents intended to spend less.

The Hospitals around the globe were affected by the pandemic. But China’s situation — especially since Covid The number of cases has risen in December — revealed the gap between the local public health system and the country’s global economic heft as second only to the U.S.

The The U.S. ranks #1 in the world for health expenditure per capita at $10.921 in 2019, according the U.S. Health Information System. World Bank. For ChinaThe same number was $535, which is similar to the of Mexico.

Households In China also pay for a higher share of their health care — 35.2% versus 11.3% for Americans, World Bank These data were available.

Extreme pressure on public hospitals — including lack of capacity — drove many new patients for Covid Non-invasive and invasiveCovid Care to be provided by United Family Healthcare In China”, said the founder Roberta Lipson. She said her company has 11 international-standard hospitals and more than 20 clinics in major Chinese cities.

“Growth in awareness of the importance of assured access to health care, as well as UFH as an alternative provider, is driving increased demand for our services from patients that can afford self-pay care,” She said.

“This experience is also driving increased interest in commercial health insurance which could cover access to premium private providers,” Lipson said. “We are helping patients to understand the benefits of commercial insurance. This will have a lasting impact on demand volume for private healthcare services.”

New Frontier HealthThere are many. Lipson Vice chair acquired United Family Healthcare TPG 2019

In Early December, the mainland China It abruptly ended its stringent Covid Contact tracing agents. Infections Hospitalizations soared to a national peak of 1.6million. Jan. 5, according to official data.

Between Dec. 8 Jan. 12, Chinese Nearly 60,000 patients were treated in hospitals Covid-related deaths — mostly of senior citizens, according to Chinese Health authorities By Jan. 23. The total surpassed 74,000 CNBC estimates are based on official data.

Although New deaths per day have dropped sharply since the peak, but the numbers don’t include Covid Patients who have lost their lives at home Anecdotes Imagine a public healthcare system overloaded with people during the peak of the wave and long waiting times for ambulances. Doctors Hospitals sometimes had overtime nurses. They were also sick.

Health Insurance

Most Of the 1.4 billion people in China You can have social insurance which covers you for access to public hospitals as well as reimbursement for any medicine on a state-approved medical list. Employers Each member of staff and the government contributes regular payments.

The penetration of other health insurance — including commercial plans — was only 0.8% as of the third quarter of 2022, according to S&P Global Ratings.

CNBC Health & Science

Read CNBC’s global health coverage is up:

Analyst WenWen Chen Expect commercial insurance to expand quickly this year as well as next. “Following Covid, we do see people’s risk awareness rising. For [health insurance] agents, it’s easier for them to establish conversations with clients.”

Some These are the players China’s In the insurance industry, there is a health insurance market Ping An, PICC AIA. Local Authorities are also testing a low cost insurance product called Huimin Bao.

Oliver Wyman’s Survey in December It was found that 62% (non-policyholders) planned to purchase health insurance and 44% (existing policyholders) were looking into increasing their coverage.

Over In the 15-years preceding, Chinese The country’s government has committed political and financial resources to the development of its public health system. The The entire topic was covered in this section. Chinese President Xi Jinping’s Report at a major political gathering October.

Hospital Funding

Read More about China CNBC Pro

For comparison, HCA HealthcareThe largest U.S. hospital operator, he said More than half its revenues comes from managed care — often company-subsidized plans that have a network of health providers — and other insurers. Most HCA receives a significant portion of its other revenue from government-related sources Medicare Medicaid Health insurance plans

In China, United Family Healthcare’s Lipson The company claimed it could react faster because it was privately owned. “We finance our own growth and can acquire talent and expertise by offering competitive pay packages, so we can also flex beds to the level of care that is needed.”

“Having observed the course that pandemic surges took in other countries, and because our patients are private pay, we were able to order sufficient supplies of medication, PPE etc, as we began to see the numbers of Covid cases grow in China,” She said.

Her Company had an excess capacity because it opened four hospitals in two years. Lipson It was noted that the public system had added 80,000 beds to intensive care units over the last three-years, but failed to meet the surge in demand. Covid cases.

There is a shortage of specialists doctors

UltimatelyThe pandemic’s shock presents an opportunity to make wider industry changes.

The The health care payment system does not have any direct impact on China’s Because most hospitals are under direct government supervision, they were named George Jiang, consulting director at Frost&Sullivan.

But He said that macro events could drive systemic changes such as tripling the ICU capacity in one month.

China’s Tiered medical systems had made it difficult for doctors to compete in the most advanced intensive care units in large cities. This resulted in a shortage of ICU physicians and beds. Jiang said. He said recent changes mean smaller cities now have the capacity to hire such specialized doctors — a situation China Hasn’t seen for 15 years.

Now He expects to see more ICU beds. China This level of care will require more doctors to be trained.

There There are many other factors that can be attributed to these issues. China’s The importance of health care development and the reasons why many locals travel to abroad for treatment.

But Jiang Notable is the increased use of the internet to pay for services and payments China Comparing the U.S. means Asian A country can be the most advanced market in medical digitalization.

Chinese JD is among the many companies in the space. Health WeDoctor.

— CNBC’s Dan Mangan This report was contributed by you.

Correction: This Story has been updated to reflect this. Roberta Lipson Is the founder of United Family Healthcare Vice chair of the parent company New Frontier Health.

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