THE GLOBALIZATION OF HEALTHCARE DR. BLAIR GIFFORD PROFESSOR, GLOBAL HEALTH MANAGEMENT BUSINESS SCHOOL AND THE CENTER FOR GLOBAL HEALTH UCDENVER

THE GLOBALIZATION OF HEALTHCARE DR. BLAIR GIFFORD PROFESSOR, GLOBAL HEALTH MANAGEMENT BUSINESS SCHOOL AND THE CENTER FOR GLOBAL HEALTH UCDENVER

INTERNATIONAL HEALTH International health has been seen as a side business of curiosity (medical tourism). Although medical tourism has been growing in recent years, there is more to this development than the mere growth of medical tourism That is, governments are opening their doors to foreign health services and U.S. health systems are beginning to compete on a global stage.

CASE STUDY: ONCOLOGY IN CHINA Cancer is leading cause of death in China (374.1 per 100,000 person/ year) 4.3 million new cancer cases and more than 2.8 million cancer deaths in China in 2015 13% of deaths in China were caused by malignant neoplasm Every minute 6 people in China are diagnosed with cancer 12,000 new cancer diagnoses are made every day

ONCOLOGY IN CHINA Compound Annual Growth Rates of Cancer in China

ONCOLOGY IN CHINA Mortality/ Incidence Ratio

ONCOLOGY IN CHINA 5 Year Survival Rates of Cancers in China (2015) Lung 16.1% Stomach 27.4 Liver 10.1 Esophageal 20.9 Ovarian 38.9 Melanoma 38.8 Colon 47.2 Breast 73.1 Prostrate 53.8 Leukemia 19.6 Brain 18.2 Pancreas 11.7 Overall 30.9%

CITIZENS CONCERN 80% of Chinese are concerned about the country s severe air, ground water, river, and soil pollution Less than 1% of China s 500 largest cities have an air quality level that meets World Health Organization (WHO) standards. The WHO advises that the daily value for small particulates (PM 2.5) should be 20 micrograms per cubic meter or less. The average national intensity in Chinese cities was 72 micrograms per cubic meter in 2013; levels in some areas hit 1,000 micrograms per cubic meter. It is estimated that 500,000 Chinese flew outside the country for medical care in 2016 (NYTimes, April 2016) In 2014, it is estimated that 60,000 Chinese flew to Taipei, Taiwan for medical care

CHINA S GOVERNMENTAL RESPONSE Health reform initiated by the Chinese government in 2009 Government invested tremendous money into health infrastructure development and training and began basic universal insurance coverage Government funding to the health budget increased by about 16.5%/year from 2009 to 2015 Increased spending helped but not enough to contain the cancer epidemic It is estimated that China has only about one quarter of the physical capacity and health provider capacity to manage cancer care

INSURANCE REIMBURSEMENT China has three main medical insurance models: 1. New rural cooperative medical insurance (NRCMI) 2. Urban employed basic medical insurance (BMI) 3. Urban resident BMI About 40% of China s healthcare expenditures are personal out-of-pocket expenses Cancer Care: Insurance reimburses pharmaceutical costs for inpatients, provided the drugs are included in the national or local Reimbursement Drug list (RDL) Private insurance products for cancer are just starting to develop in China

GOVERNMENTAL RESPONSE Changed policies to draw in international oncology expertise Doctors can work in various hospitals now, including private hospitals There is a new government initiative to make private hospital beds (5% of total) become 20% of all beds in China by 2020 Very welcoming to American medical centers to gain and learn from their expertise in oncology care Joint venture restrictions have been lifted for American health services, especially oncology care This welcome is partially due to human resource needs in oncology care and it is an attempt by Chinese physicians to catch up with newer cancer treatments and practices

CHINA S CLASS 2 & 3 HOSPITALS CAPTURED 80% OF CANCER PATIENTS

THE CHINA ONCOLOGY MARKET CHALLENGES AND TRENDS Anti-cancer drug: 11.5% of China market in 2015

THE CHINA ONCOLOGY MARKET CHALLENGES AND TRENDS

CANCER PATIENT CARE IN CHINA Global Differences in Cancer Drug Prices and Local Affordability: China, US, India and the UK Median price of one-month dosage of generic cancer drugs Median price of one-month dosage of patented cancer drugs Cost of generic drugs, % of GDP per capita China US $532 US $3,173 48% 288% US US $654 US $8,694 14% 192% India US $159 US $1,515 33% 313% Costs of patented cancer drugs, % of GDP per capita UK US $458 US $2,587 14% 78% American Society of Clinical Oncology Annual Meeting, 2016

THE GLOBALIZATION OF U.S. HEALTH SERVICES Demand for U.S. health care expertise is strong and growing in many regions of the world Johns Hopkins Medicine, Cleveland Clinic Foundation, Mayo Clinic and University of Pittsburgh Medical Center have lent their names to overseas partnerships. Stanford University Medical Center and Ochsner Health System have begun establishing the infrastructure to promote international consulting services

CONCORD MEDICAL SERVICES (WASHINGTON) Concord Medical Services (NYSE: CCM)first applied in January 2011 to the local Chinese government for its project in Guangzhou, approval took three years In spring 2014, Concord announced that they had received approval in only 6 months from the Chinese government for the company s new Shanghai Concord Center Hospital in Shanghai Construction started in 2015 Today has more than 140 radiotherapy and cancer diagnosis centers around China

MD ANDERSON CANCER CENTER MD Anderson Cancer Center (U. of Texas) ventured into China a few years ago Received the top Chinese science and technology award for partnership programs with Chinese institutions for training, education and patient care Collaborations have been particularly productive in cancer screening, liver and lung cancer treatment, and cooperation in clinical trials Sister institutions in China that are working with MD Anderson include the Chinese Academy of Medical Sciences Cancer Institute and Hospital (Bejing), Tianjin Medical University Cancer Institute and Hospital, Fudan University Shanghai Cancer Center, and Sir YK Pao Centre for Cancer at the Chinese University of Hong Kong

IBM IBM recently announced that they are making Watson available to 21 Chinese hospitals so that physicians can personalize cancer care IBM will be partnering with Hangzhou Cognitive Care on this development IBM s cognitive computing platform for oncology care was developed in conjunction with Memorial Sloan Kettering physicians The partnership between IBM and Hangzhou Cognitive Care is an attempt to help Chinese oncologists stay up to date about best practices in cancer treatment

CONCLUSIONS US Hospital Systems are entering global markets This isn t just for medical tourism (bariatric care, plastic surgery) and for wealty patients, but for all kinds of care including cardiovascular and oncology care. Centers of excellence like MD Anderson, Johns Hopkins International, Cleveland Clinic, and DaVita don t see these developments in China as unique, one-time events Hospitals have gone from independent local concerns to regional systems, and to global partners. This follows the pattern of other U.S. multinational corporations. Thus, this development will have implications for poorer populations in developing nations.