Date：2018-01-27
CHINESE SOCIETY USHERS IN A NEW ERA
The outline of the 19th CPC National Congress and the "Healthy China" 2030 plan has increased the emphasis on people's health, and has also pushed the medical service industry into a new era. China's medical and health sector has undergone medical reform in the past dozen years, and has made great progress in accessibility and cost rationalization. The next stage of medical reform will focus on improving the quality and efficiency of medical treatment. The past ten years have also been actively explored by the society in running medicine. With the encouragement of policies and capital support, the total number of hospitals run by society has exceeded half of the total, and the growth rate is much higher than that of public hospitals. However, from the business indicators such as the number of beds and the number of patients, the proportion of private hospitals is still low (see the figure below). We believe that the growth of socially-run hospitals in the next stage can no longer rely solely on the increase in "quantity", but also requires a "qualitative" breakthrough.
In the past, socially-run hospitals often used higher quality services as their selling point, focusing mainly on specialized fields with low medical technology requirements. Therefore, in the previous round of rapid development, many socially-run hospitals paid insufficient attention to medical quality. In the absence of industry quality standards and effective supervision, the whole society is also facing a certain crisis of integrity.
At the same time, new forces are changing China's medical service industry, and the five major trends of policy, capital, payments, talents and technology are continuing to profoundly affect the development of social medical services. China's social medical treatment will usher in a new era, and the overall outlook of social medical treatment in the next ten years will undergo significant improvements.
Social medical policy and practice coexist, and the trend of value medical treatment is emerging: the pattern of diversified medical treatment has taken shape, and the global value medical treatment trend has also brought opportunities for differentiated development of Chinese social medical institutions and promoted "quantitative change" The transition to qualitative change.
The influx of diversified social capital has helped the expansion and integration of socially-run medical institutions: Since 2012, China ’s capital market has seen unprecedented growth in investment in private and public hospitals, with a compound annual growth rate of 80% in transaction value, an increase of approximately 50 times. Especially during the period of 2015-2016, the number of transactions continued to reach a record high, with 31 M & A transactions in 2016 alone, achieving a transaction size of USD 2 billion (see the figure below). Investment institutions, pharmaceutical groups, insurance funds, and pharmaceutical-related industry chain companies constitute a diversified capital structure, which has become the core driving force for the sustainable development of socially-run medical institutions.
The rise of multi-point practice and doctor groups promotes the marketization of doctor resources: The multi-point practice of doctors and the rapid rise of doctor groups provide opportunities for rapid development of social medical institutions.
Encourage the development of commercial insurance and form diversified payer cooperation: With the promotion of medical reform, the future model of medical insurance integration will become a major trend. Social medical institutions have begun to explore diversified forms of cooperation with medical service providers.
Leading technology and digitalization drive the upgrade of diagnosis and treatment services: Social medical institutions should take advantage of digital and mobile medical care and apply innovative medical technology to bring differentiated competitive advantages.
NEW PATTERN OF CHINA'S SOCIAL MEDICAL INSTITUTIONS
In the new era environment of policy guidance, capital support, marketization of doctors' resources, improvement of payment capacity, technology and digitalization, social medical institutions are also responding to, absorbing, and utilizing these environmental factors, and the industrial structure has gradually changed.
From the perspective of the types of medical institutions (see the figure below), in the past, social medical practice was often concentrated in small clinics, small general hospitals, and some specialty areas with low technical requirements. The overall medical service capabilities and quality were insufficient, leading the industry to face integrity crisis. Among all socially-run medical institutions, ~ 90% come from a large number of small clinics. Most of these clinics are self-employed, of poor quality and limited scale. There are only a few middle- and high-end general practice clinics in the first and second-tier cities. The supplement of primary medical services by medical institutions has not yet been able to meet demand. Of the more than 16,000 private hospitals, most of them are small or first-tier hospitals with limited overall scale and service capabilities. Among the specialized hospitals, the number of more complicated specialized hospitals is very small, such as oncology, cardiovascular, etc., and the medical services provided by most of these specialized hospitals are relatively simple. For example, private oncology hospitals usually only have oncology departments, some have radiotherapy departments, and very few have oncology surgery. Other specialty hospitals are mainly those with low technical requirements and relatively mature business models, such as oral, ophthalmology, plastic surgery and obstetrics and gynecology.
The focus of medical treatment in society is developing towards "technicalization" and "scale". Successful general hospitals clearly define their own positioning and development characteristics to achieve differentiation. Based on basic medical insurance, develop hybrid payments and leverage public hospital partner resources to accelerate business development. More complex specialized hospitals have begun to emerge and have achieved many successes. In cases, there is often a clear focus on specialists; attracting patients with strong clinical capabilities and excellent curative effects created by full-time clinical leaders; attaching great importance to patient drainage and setting reasonable price standards; other service-oriented specialist hospitals such as obstetrics and gynecology Ophthalmology and orthopedics can cultivate a relatively standardized operating model after rapid development in the early stage. It is highly reproducible and has the best synergies in regional large-scale development. Although the clinics are mainly low-quality small clinics, However, chain clinics that are booming along with tiered diagnosis and treatment have been rapidly developed, gradually focusing on one city / region, and gradually developing to other regions.
Participants in social medical treatment are also constructing a new pattern. BCG observed several major changes: the "Big Four" represented by China Resources Medical, Fosun Pharma, Peking University Medical, and CITIC Medical, and the rise of emerging medical groups; specialist chain leaders represented by Aier Ophthalmology have gradually formed; various Forms of participation by international medical institutions, such as the strategic cooperation reached between Massachusetts General Hospital and Shanghai Jiahui International Hospital; and the emergence of diversified market participants, including new entrants to the industry, insurance companies and medical groups.
Looking ahead, China's social medical service industry is at an exciting industry turning point. There are many future development paths, but from the global trend point of view, only those companies that can continuously promote the improvement of efficacy, effectively improve the health and quality of life of patients, and create real value for patients can continue to grow. We eagerly hope that a number of such outstanding companies can emerge from Chinese social medical service organizations as soon as possible, and make greater contributions to meeting the diverse medical and health needs of the Chinese people.
