By Jill | Marketing
When it comes to discussing China and healthcare, it’s a matter of numbers—BIG numbers. China is the most populous nation on earth, with 1.4 billion people. The number of Chinese people who live by middle class standards is 474 million. That’s nearly 150 million more than the entire population of the United States. In 2014, China was the world’s third largest healthcare market, and the market is growing by double digits.
Despite its upward trends, healthcare spending in China is only about 5 percent of the GDP, compared with 10 percent in Japan and Europe and 18 percent in the United States. However, the Chinese government is promising to double its share of hospital beds by 2015 as the nation’s population rapidly ages. Healthcare expenditures in China are expected to reach $11.4 billion by 2015 and medtech market growth is forecast at 20 percent through 2018.
Because of the increasing number of middle-class Chinese, the population is facing “first world” health problems. Illnesses are shifting from life-threatening third-world ailments, which are relatively cheap to treat, to chronic diseases for which care is expensive. At the same time, China is suffering from a doctor shortage. Under the nation’s communist system, doctors are only paid the equivalent of $480 a month while salaries for other white collar professionals have rocketed skyward in recent years. As a result, doctors turn to hongbao—or “red packet” cash bribes to perform surgery. Doctors have also recently been arrested for taking kickbacks from multinational pharmaceutical companies.
Whatever its problems, China is an underserved market when it comes to medtech. For example, only about one in ten county hospitals offer MRI equipment, and there is a shortage of cardiac surgery devices.
By 2025, China will have 300 million senior citizens who will require healthcare services and quality medical technology. Little wonder China’s health spending is projected to soar past the $1 trillion mark by 2020. In the meantime, Chinese officials are vowing to introduce measures to pay doctors more and roll out a national health insurance plan. Whatever happens, the Chinese healthcare market is an unstoppable colossus that is impossible to ignore.