HEALTHCARE IN CHINA

China is the world's second largest pharmaceutical market after the US. Healthcare is one of the three greatest economic burdens in China, along with housing and education. The government is reforming the healthcare system to make it more affordable.

History
Before the 1990s, most companies and factories in China were state owned and their employees could reimburse all medical bills. Today, that system no longer exists and medical bills are paid out of pocket by individuals as well as by social medical insurance, which individuals and employers make contributions to on a monthly basis, and/or commercial medical insurance, which individuals buy from insurance companies on their own.

Medical Resources
China had 954,389 medical institutions with 5.16 million beds and 8.62 million people working in the industry by the end of 2011. The vast majority of these medical resources are available in cities. More than 6.27 billion visits were made to medical institutions in China in 2011, including 153 million inpatients.

Healthcare Spending and Funding
China's urban per capita healthcare spending increased 3.1 times to RMB2,695 in 2011 from RMB872 in 2000; rural per capita healthcare spending increased 3.8 times to RMB814 in 2011 from RMB215 in 2000. The Chinese government's expenditure on healthcare increased 10.4 times to RMB737.89 billion in 2011 from RMB70.95 billion in 2000; government healthcare spending as a percentage of total medical bills climbed to 30.4% in 2011 from 15.5% in 2000.

China's The New Rural Cooperative Medical Care System                                                                                The New Rural Cooperative Medical Care System was introduced in 2005 to cut medical costs for rural dwellers. Under the system, the annual cost of medical coverage is RMB50 per person. Of that amount, RMB20 is paid in by the central government, RMB20 by the provincial government and RMB10 by the patient. If patients go to a small local hospital or clinic, the system will cover roughly 70-80% of their bill. If the patient visits a county clinic, the percentage of the cost being covered falls to 60%. If the patient requires a specialist in a city hospital, the plan covers around 30% of the bill. The system has boosted medical insurance coverage to almost 95% of the population in China.

Pharmaceutical Industry In China
Output from China's pharmaceutical industry has grown over 20% annually to RMB1.57 trillion in 2011 from 2003, and is expected to top RMB10 trillion by 2020. In 2011, the industry posted RMB1.52 trillion in revenues and RMB157.7 billion in gross profits, up 28.8% and 23.2% respectively from the year before; the industry exported $44.5 billion worth of drugs, up 34.9% from the year before.

Pharmaceutical Companies In China
As of the end of 2009, China had 6,807 pharmaceutical companies; the top 3 pharmaceutical companies captured a 20% market share (compared to 90% in the US and 73% in Japan) wholly foreign owned or Chinese-foreign pharmaceutical companies accounted for 30% of total number and 27% of total revenue. By the end of 2015, China hopes to have five pharmaceutical companies that post RMBB50 billion or more in annual revenues and 100 pharmaceutical companies that post RMBB10 billion or more in annual revenues, and the top 100 pharmaceutical companies are expected to be responsible for 50% of industry revenue.

Drugstore Chains In China
China's rapidly aging population has fueled the growth of drugstore chains. The 100 biggest drugstore operators posted a combined RMB59.6 billion in revenues in 2011, accounting for 39.7% of total drug retail sales. As of the end of 2011, China had 3,012 drugstore retailers, including 180,000 chain operators, up 6.3% and 26.4% from a year earlier.

Source: National Bureau of Statistics


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