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Health Care Industry Grows Rapidly in China, India and Mexico, Business and Industry Trends Analysis

Growing Health Expenditures in China: China is in the process of implementing a broad, national boost to health care availability.  Today, nearly 100% of the people in China are covered by some kind insurance (compared to less than one-third of the population in 2003).  The OECD put China’s health expenditures per capita, from all sources, at only $894 per capita for 2019.  Plunkett Research estimates this number to be in the range of $1,300 for 2023 (about $1.8 trillion in total). 
China's national health care coverage system is a mix of public and private initiatives, with the majority of the population relying on public services. The system is managed by the National Health Commission (NHC) and is divided into two parts: the Urban Employee Basic Medical Insurance (UEBMI) and the New Rural Cooperative Medical Scheme (NRCMS). UEBMI covers urban employees and their dependents, while the NRCMS covers rural residents and urban residents not covered by UEBMI. Both programs provide coverage for hospitalization, outpatient care, and prescription drugs, among other services.
In addition to these programs, China has implemented several other national health initiatives aimed at improving access to health care for its citizens. One such initiative is the Healthy China 2030 plan, launched in 2016, which aims to improve the health of the population by addressing health challenges such as chronic diseases, environmental pollution, and aging.
China’s health facilities and services available will remain relatively limited for some time, particularly in remote villages and towns.  China eventually intends to provide relatively modern health care nationwide.  This is an immense undertaking in a nation with little health care infrastructure and few doctors who have been trained to Western standards.  While health care coverage has become widespread, the co-pay can be high, which creates a difficult financial burden for many patients.
Health care expenditures in China are expected to rise substantially over the mid-term.  China’s health care spending was expected to reach about $1 trillion per year by 2020 ($770 per capita), but will remain very low on a per capita basis compared to that in Europe, Japan and the U.S.  This was a dramatic increase from about $300 billion spent in 2009 and $500 billion in 2014.
Over the longer term, China will face a growing elderly portion of its population, even more dramatic than the aging population facing the U.S.  China is also challenged by high cigarette smoking rates.
At the same time, new private clinics are attracting wealthy locals in China.  Residents who can afford it may sign up for care via a private health program offered by Beijing Universal Medical Assistance, at a fee equal to a few thousand dollars yearly.  While the fees are vastly higher than those at the state-run public clinics, these private clinics feature luxury surroundings and prompt, quality service for basic health care needs.  Look for the number of larger private hospitals in China to grow.  Hospital delivery firms have invested significantly in China (and in other countries in Asia, especially Malaysia, Thailand, Vietnam and the Philippines).
In order to provide advanced health care, such as diagnostics and drugs, at extremely low prices suitable to the Indian and rural Chinese markets, a vast amount of innovation and creativity will be required.  Much of this innovation will eventually trickle into the developed world, helping to establish new ways to lower health care costs.  While initial steps into modern health care in China and India were based on equipment, procedures and technologies from the West, health care delivery in the future will accelerate quickly based on locally developed efficiencies and technologies.
Health Care in India:  India's national health care coverage system is conducted through a combination of public and private systems. A large swath of the population relies on public services. The government has implemented several national health initiatives aimed. The long term intent is to significantly boost access to relatively modern health services, while maintaining reasonable levels of costs.
India, which will soon far surpass even China in total population, is seeing significant growth in health care initiatives.  With its relatively young population and growing middle class clamoring for better and more modern medical care, some health care products companies are boosting their spending, especially in drug development and health care delivery.  Indian physicians (many of whom were trained in Western medical schools) are making strides in developing innovative and cost-effective new treatments. India's national health care coverage system is conducted through a combination of public and private systems. A large swath of the population relies on public services, while a significant number of wealthy residents go for private care. The government’s long term intent is to significantly boost access to reasonably modern health services, while maintaining control on costs.
Government spending on health care in India per capita is lower than any other major world economy. (The OECD put India’s health expenditures per capita, from all sources, at only $231 per capita for 2019.  Plunkett Research estimates this number to be in the range of $300 for 2023, or about $420 billion in total.) In 2018, the Indian government established a national health program called Pradhan Mantri Jan Arogya Yojana (PM-JAY), which allows low-income people to receive secondary and tertiary care at private facilities at no cost.  As of 2023, Plunkett Research estimates that fewer than 50% of the population is covered by PM-JAY or employer provided insurance.  PM-JAY is by far one of the world’s largest health care coverage systems.  It aims to provide financial protection to around 500 million lower-income families by providing them with free health coverage for major needs, including hospitalization and surgeries. The program covers more than 1,500 medical procedures in both public and private hospitals. The annual expenditure for PM-JAY is funded by the central government. Patients do not pay an annual or monthly fee.
Meanwhile, India’s National Health Mission (NHM) encompasses The National Rural Health Mission (NRHM) and The National Urban Health Mission (NUHM). The main programs include Health System Strengthening, Reproductive-Maternal- Neonatal-Child and Adolescent Health, and Communicable and Non-Communicable Diseases.  
Despite multiple challenges, the long-term outlook for India's national health care system is promising, as the government has demonstrated a commitment to investing in health care infrastructure and expanding coverage to vulnerable and low-income populations. The pharmaceutical research and manufacturing segment is particularly well developed.  However, the system still faces several challenges, including the need to modernize and enhance the quality of care overall.
Health Care Innovation in India: One of the world’s most closely watched private doctors is India’s Devi Shetty, a surgeon trained in London who has become an extremely successful medical entrepreneur.  While he gained fame at one time as Mother Teresa’s heart surgeon, he is best known today as a builder of highly cost-effective hospitals.  Shetty has been compared, by at least one journalist, to America’s Henry Ford.  Ford, in one of the most important innovations in industrial history, launched the modern automobile manufacturing industry by creating the assembly line to turn out a high volume of quality cars at affordable cost.  Before Ford, the car was just a distant, unaffordable dream for most people, and was assembled slowly, by hand, at great cost.  Dr. Shetty, in a vaguely similar vein, employs the economies of scale offered by high volume output to deliver high quality surgery at modest cost at his Narayana Health firm.
At Shetty’s massive, 1,000-bed privately-owned hospital in Bangalore (three to six times larger than a typical American hospital), open heart surgery runs about $2,000 or less, and the outcomes are excellent.  The hospital is like a surgery factory.  Dozens of theaters give this center the capacity to perform up to 70 heart surgeries in one day.  The hospital states that about 30% of its heart surgery is done on children.
Adjacent to his Narayana Hrudayalaya Hospital for heart care, he has built a 1,400-bed cancer center and a 300-bed facility for eye care.  Another Shetty unit provides a broad range of dental care; yet another runs a stem cell bank to enable mothers to deposit their babies’ umbilical cords for potential use in the future for stem cell therapy.  Additional surgical specialties at Shetty’s hospitals include neurology and orthopedics.  He has raised millions of dollars with the goal of building several more medical centers in India, hoping for 30,000 total beds.  As of mid-2022, Narayana Health managed or owned a system of 21 hospitals and six heart centers in India and an international hospital in the Cayman Islands, in addition to a telemedicine practice which links physicians via Skype in facilities in India and in Africa.  2.5 million patients are treated every year.
Shetty’s hospital is also a partner in a regional “micro health insurance” program called Yeshaswini, which covers nearly 3 million farmers at a monthly premium of a few rupees each.  The state government of Karnataka contributes the equivalent of a few cents per month per person.  All told, the program covers surgeries in 400 hospitals across the state.  The states of Andhra Pradesh and Tamil Nadu have started similar programs.
Narayana Health’s cost efficiency gets a significant boost from Atma, a back-office platform that handles everything from admissions to scheduling the pharmacy operations to payments.  All data is stored and analyzed along with outcomes and complications to flag unnecessary costs and plan ways to avoid them in the future.
Mexico’s Health Insurance Program: Mexico's national health care coverage system is a public system with an ambitious goal of providing low cost, universal health coverage to all Mexican citizens and legal residents. The system is made up of several institutions, including the Mexican Social Security Institute (IMSS), the Institute of Security and Social Services for State Workers (ISSSTE), and the Ministry of Health (SSA).
(The OECD put Mexico’s health expenditures per capita, from all sources, at $1,227 per capita for 2019.  Plunkett Research estimates this number to be in the range of $1,430 for 2023, or about $181 billion in total.) In 2019, President Obrador signed an executive order replacing the country’s older Seguro Popular health care program with a new Health Institute for Welfare initiative called Insabi to centralize healthcare.  The initiative had an initial budget of $4.12 billion from the Fund for Catastrophe Protection Expenses.  The Institute took charge of health care on a federal level instead of the previous state level control that was exercised under Seguro Popular.  Insabi covered approximately 32.8 million people but was not able to successfully expand access to healthcare significantly. 
 Starting in 2023, another initiative, IMSS-Bienestar, will replace Insabi.  IMSS-Bienestar was established in 1973 under the Mexican Institute for Social Security (IMSS), which oversees medical coverage for employees, family members and retirees.  The IMSS-Bienestar program offers coverage to people who are not insured by their employers. Coverage includes a wide range of health services, including primary care, hospital care, drugs and supplies. Approximately 130 million people are covered by the combined national health units. Expenditures are funded through a combination of government subsidies, social security contributions, and individual payments. Patients do not pay an annual or monthly fee, but they may be required to make co-payments or pay for some services or medications out of pocket.
The long-term outlook for Mexico's national health care coverage system is uncertain. While the system has made progress in providing coverage to a large percentage of the population, it still faces challenges such as funding, access to specialized care and a shortage of medical personnel.

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