After having successfully expanded health insurance coverage, China now faces the challenge of building an effective and efficient delivery system to serve its large and aging population. RAND researchers recommend that rather than emulate the models of Western countries, which have well-known limitations, China should create an innovative model based on population health management principles and sophisticated health information technology.

The Role of Health Care Transformation for the Chinese Dream

Powering Economic Growth, Promoting a Harmonious Society

Soeren Mattke, Harry H. Liu, Lauren E. Hunter, Kun Gu, Sydne J. Newberry

ResearchPublished Aug 29, 2014

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After having successfully expanded health insurance coverage, China now faces the challenge of building an effective and efficient delivery system to serve its large and aging population. The country finds itself at a crossroads — it can emulate the models of Western countries with their well-known limitations, or embark on an ambitious endeavor to create an innovative and sustainable model. We recommend that China choose the second option and design and implement a health care system based on population health management principles and sophisticated health information technology. Taking this path could yield a triple dividend for China: Health care will contribute to the growth of service sector employment, stimulate domestic demand by unlocking savings, and enable China to export its health system development capabilities to other emerging economies, mirroring its success in building other critical infrastructure. These forces can help turn the Chinese Dream into a reality.

Key Takeaways

China's Economic and Social Progress over the Past 50 Years Has Outpaced Its Health Care System

  • The health of China's population is being influenced simultaneously by its rapid rate of aging, growing wealth, and migration from rural to urban living, as well as by greater reliance on food of low nutritional value and decreased physical activity.
  • The result is an expanding burden of chronic disease and disability, even as mortality due to acute illness wanes.

The Current System Has Several Handicaps

  • China faces a severe workforce shortage, especially of nurses.
  • There is overreliance on hospital-based care.
  • Health information technology is not up to date.
  • While the central government is investing substantial resources, the limited absorptive capacity of the current system makes it difficult to expand capacity fast enough to meet expected demand, at least with traditional delivery models.

This Challenge Can Be Made into an Opportunity

  • Health care can be restructured as a cornerstone of a knowledge-based economy.
  • Access to high-quality and affordable health care can stimulate domestic consumption by unlocking household savings set aside for health care expenditures.
  • Successful adoption of an innovative and sustainable system will enable China to export health system development capabilities.
  • China does not face the same entrenched interests and obstacles that other nations do in creating an innovative health care system.

Western Models Offer Cautionary Lessons for China

  • Western countries do not invest sufficiently in interoperable information technology.
  • Countries do not engage in significant performance monitoring and improvement.
  • Incentives for physicians are not aligned with desired outcomes, resulting in ineffective and inefficient health care delivery systems.
  • Consumers are not sufficiently engaged in their own care.

Recommendations

China should adopt a population health management model, which unites the public health perspective of improving health at the population level and the medical care perspective of individual care delivery:

  • Invest in sophisticated information technology.
  • Optimize care delivery based on clinical evidence and best practices.
  • Monitor performance monitoring at all levels of accountability.
  • Better deploy health professionals through use of information technology and shifting certain tasks to lower-wage, less-skilled workers.
  • Align incentives with policy goals.
  • Inform consumers and patients of their choices in medical care and lifestyle and the consequences of those choices.

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Document Details

  • Copyright: RAND Corporation
  • Availability: Web Only
  • Year: 2014
  • Pages: 66
  • Document Number: RR-600-1-AETNA

Citation

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Mattke, Soeren, Harry H. Liu, Lauren E. Hunter, Kun Gu, and Sydne J. Newberry, The Role of Health Care Transformation for the Chinese Dream: Powering Economic Growth, Promoting a Harmonious Society. Santa Monica, CA: RAND Corporation, 2014. https://www.rand.org/pubs/research_reports/RR600-1.html.
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The research in this report was produced within RAND Health, a unit of the RAND Corporation. The research was funded by Aetna, Inc.

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Version Note

This publication supersedes a previous version published in 2014 (RR-600-AETNA).