“When we brought the ultrasound scan technology to Beijing, allowing pregnant moms-to-be in Beijing to see their baby’s heartbeat on an ultrasound, our doctors were so ecstatic that they teared up.” – Roberta Lipson
Ms. Roberta Lipson, Founder and CEO of United Family Healthcare (UFH), took a walk down memory lane and talked about her ideal healthcare scenario where doctors are passionate about improving patient experience.
However, when we get excited about epoch-making medical innovations, it should be pointed out commercial insurance, which plays a catalyst role in the healthcare market, is equally important for patients.
Compared to health insurance, medical innovations tend to bring more benefits to healthcare facilities. For example, hospitals often see investment in new devices as a means to attract patients and increase revenue. At present, health insurance providers and healthcare facilities are considered more competitors than partners, with the latter striving for more revenue while the former tries to propel the latter to control medical fees.
Is it possible for the two to become partners?
On the first day of June 2019, the 10th Guangzhou Medical Forum (GZMF) was held in Guangzhou United Family Hospital (GZU). GZMF was started by Dr. Kelly Xia, Chief Medical Officer of GZU. Dr. Xia set the forum theme for this year as Healthcare Facilities + Health Insurance: Working Together to Shape an Integrated Service Model to Control Medical Expenses.
Dr. Kelly Xia, CMO of GZU
This forum invited Lai Xiaohui, Vice President of Fosun United Health Insurance, and Xie Junhao, COO of GZU, as guest speakers.
Customers with a health insurance plan account for a high proportion of GZU’s customer base. GZU is also at the forefront of exploration of new health insurance products. Therefore, it is a suitable host for a health insurance-themed event.
Dr. Xia articulated the vision, mission, and core values of UFH as well as its evolution over the past 40 years. She pointed out that compliance with local regulations, emphasis on medical safety, and continuous quality improvement are the primary driving forces of UFH.
According to Dr. Xia, the General Manager of GZU Dr. Kate Gaynor, was unable to attend the meeting because she was invited to share insights on the Chinese healthcare market at an international conference in the United States. A year ago, also according to Dr. Xia, Dr. Gaynor was invited to Israel to share insights on the Chinese healthcare market as more and more foreign medical brands and global investors are eyeing the Chinese market.
Xie Junhao delivered a speech on emerging medical trends – ways to use resources more efficiently to reduce medical expenses, sharing information on global healthcare trends, the development of commercial health insurance in China, and United Family Healthcare’s service model.
Picture / Xie Junhao, COO of GZU
Despite the many challenges faced by the global healthcare sector, Asia is still the world’s fastest-growing healthcare market, with its growth rate of total healthcare spending well above the global average growth rate (0.7%).
A clear trend linking quality and value to price has emerged in the healthcare sector. The industry is transitioning from a pay-per-use compensation model to a payment model based on quality and value.
The increase in medical costs and the operation of healthcare facilities have also brought more and more challenges to health insurance companies. From an insurance perspective, the Asian market has failed to adopt an effective approach to control medical costs, one that involves more than one lever.
Since 1999, UFH has been working with its global payment partners and commercial insurance companies to employ different methods (deductibles, pre-authorization, bundled pricing, etc.) to manage costs.
For example, UFH has joined hands with insurance companies to explore the Healthcare + Insurance model and adopted the bundled/packaged pricing method, which is an increasingly popular payment method in the United States. This method has been shown to be effective in cutting medical costs and reducing the average length of stay in hospitals (ALOS).
Bundled/packaged pricing allows patients to know costs beforehand and avoid unnecessary procedures, thus is conducive to cost control without undermining service quality.
Since 2014, UFH has begun to promote bundled/packaged pricing. As commercial health insurance is yet to take off in China, bundled/packaged pricing is well-received among people without health insurance. With standardized cost structure and service procedures, this method can help patients without health insurance to effectively control medical costs and customize a treatment plan for themselves.
According to Dr. Xia, thanks to their fee control efforts, the price of appendicitis surgery in GZU is basically the same level as tertiary A-rated hospitals in Guangzhou
Lai Xiaohui delivered a speech on the integration of insurance and healthcare and the challenges faced by the health insurance sectors.
Lai Xiaohui, Vice President of Fosun United Health Insurance
“Cliff (Mr. Xie Junhao) has just shared his views on how to reduce medical costs. I am very glad. It shows that insurance companies and medical institutions have reached a consensus – we should actively control medical costs under the premise that the quality of medical services is not undermined,” Mr. Lai said.
Lai Xiaohui, who entered the insurance industry in 2005, said humbly, “I am not a senior expert in insurance, but I have plenty of experience in health insurance.”
Mr. Lai has been in the insurance industry for 15 years, but the Chinese health insurance industry did not see real developments until recent years. In 2013, premium revenues the Chinese health insurance industry were around 100 billion rising to 544.813 billion yuan in 2018. However, per capita health insurance premiums in China remain less than 400 yuan. By contrast, Germany’s per capita health insurance premium stands at 3,071 yuan while per capita health insurance premiums in the United States reaches as high as 16,800 yuan.
Fosun United Health Insurance promotes itself as a company specializing in alternative health insurance products. Although it also sells conventional products, it focuses more on integrating health insurance and healthcare delivery which can not only improve patient experience and improve the health of the insured but also effectively control medical costs.
Fosun United Health Insurance has done some exploration in insurance products that target a specific disease or a group of population. Xiao Xin Gang, Yao Sheng Yi Hao, Xiao Xin Ai, and Yi Bao Tong are some examples of the products it has launched. It is integrating health insurance and healthcare delivery based on the managed healthcare model. Win-win results for customers, hospitals, and insurance companies are its ultimate goal.
Of course, the company still face many challenges in promoting such a virtuous ecosystem. For example, there are still obstacles on the fronts of resource allocation, regulatory environment, and assessment mechanisms. It also lacks a cost-effective solution.
However, Mr. Lai said that, confidence in the growth potential of the Healthcare + Insurance model, Fosun Group has invested in many healthcare facilities and eight domestic and foreign insurance companies. Health insurance holds great promise for the future, but the demand of patients will lead to increased specialization in health insurance.
Wang Rifei, Founder of the GZMF
The GZMF is a platform built by mainstream medical facilities in Guangzhou with the view of integrating resources in local healthcare, insurance, and internet industries. Its members include representatives from UFH, Innate Care, Douanquan Healthcare, Imperial Springs Health, Caring Medical, Evergrande Health, Yuetai Health, Yiheni, Noah Medical, iSmart Clinic, Baishide, Amber, Mingyihui, Zisun, iKang, MJ Health Care, Rich Healthcare, Deyue Ciai Medical Group, Renbo Health, Shiyi Medical Group, Rophe, Bupa, Baikang Clinic, Zhongshan Yidedian, Fosun United Health Insurance, Ping An Health Insurance, MSH, AON, Evergrande Life, Sunshine Health, Tencent Trusted Doctors, ehuzhu, Gangyouhui, Renren Medical, and Shenzhen Annet Information System Co., Ltd.
Image Highlights of the Guangzhou Medical Forum 2019