中國保險(xiǎn)業(yè)：理解醫(yī)療體系變革的必要性

1、May 19, 2020 06:52 PM GMTAsia PrimerChina Insurance: Understanding the Need for Change in the Healthcare SystemLike SARS, Covid-19 could profoundly reshape Chinas healthcare system. A push for higher healthcare spending is likely to address exposed deficiencies. The system would benefit from reforms

2、 to scale-up health workforces, increase affordable care access, and improve efficiency.Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivi

3、ty of Morgan Stanley Research. Investors should consider Morgan Stanley Research as only a single factor in making their investment decision.For analyst certification and other important disclosures, refer to the Disclosure Section, located at the end of this report.+= Analysts employed by non-U.S.

4、affiliates are not registered with FINRA, may not be associated persons of the member and may not be subject to FINRA restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.ContributorsMORGAN STANLEY ASIA LIMITED+Jenny Jian

5、g, CFAEquity Analyst+852 2848-7152 HYPERLINK mailto:Jenny.Jiang Jenny.JiangMORGAN STANLEY ASIA LIMITED+Sean WuEquity Analyst+852 3963-0755 HYPERLINK mailto:Sean.Wu Sean.WuMORGAN STANLEY ASIA LIMITED+Green CaiResearch Associate+852 2848-5686 HYPERLINK mailto:Green.Cai Green.CaiMORGAN STANLEY ASIA LIM

6、ITED+Birlina QiResearch Associate+852 3963-4087 HYPERLINK mailto:Xiaoyue.Qi Xiaoyue.QiMORGAN STANLEY ASIA LIMITED+Yolanda HuEquity Analyst+852 2848-5649 HYPERLINK mailto:Yolanda.Hu Yolanda.HuAsia PrimerChina Insurance: Understanding the Need for Change in the Healthcare SystemLike SARS, Covid-19 cou

7、ld profoundly reshape Chinas healthcare system. A push for higher healthcare spending is likely to address exposed deficiencies. The system would benefit from reforms to scale-up health workforces, increase affordable care access, and improve efficiency. Industry ViewHong Kong/China Insurance - In-L

8、ine China Healthcare - AttractiveChinas healthcare system - Still convoluted, complicated and confusing. Chinas healthcare system contains multiple industry segments, mainly including upstream drug and medical equipment producers, healthcare providers (e.g., clinics and hospitals), as well as social

9、 insurance funds and commercial insurers on the financing side, which transact with each other and jointly operate under a complex web of regulatory regimes managed by various levels of ministries and governments. In this report, we focus on exploring linkages and interactions among the various segm

10、ents and help investors better understand how they can affect each other within Chinas rapidly evolving healthcare system.Major reforms undertaken by the government in the past decade to pursue universal coverage. Following 40 years of rapid eco- nomic growth to become an upper-middle-income country

11、, China has been increasing its focus on social welfare and public health in recent years. The SARS pandemic in 2003 already pushed China to under- take significant healthcare system changes, and now China is halfway through its reforms and appears largely on track to build a true uni- versal health

12、care system by 2030. While significant progress has been made, such as establishing a basic social insurance regime cov- ering over 95% of its population, significant issues still exist: cov- erage on critical illness is inadequate for most people under the social insurance regime, and the governmen

13、t still had to aid all Covid-19patients this time around; insufficient primary care infrastructure resulted in overwhelmed hospitals and disrupted routine services during the virus outbreak; public health infrastructures still require substantial upgrades to help stem communicable and non-communi- c

14、able diseases.Emerging stronger. We believe a push for higher healthcare spending because of Covid-19 is likely, to address areas for improve- ment and build a better healthcare system, which could spur new business opportunities. Although Chinas healthcare system will con- tinue to be serviced main

15、ly by the public sector, because of its immense size, there is plenty of room for private insurers, healthcare providers, and producers to continue to develop, especially in seg- ments where innovation and efficiency are key. In addition, the looming funding pressure that stems from the countrys agi

16、ng popu- lation may also foster a need for more private sector input, in the form of public-private-partnerships, especially in developing seg- ments such as health surveillance, information tracking, and preven- tive care.This report is Part 1 in a series of reports on Chinas health care and health

17、 insurance industry. In Part 2, we plan to focus on the “payor” side to: 1) lay out current market structures for health insurance, which often have little data to track; 2) analyze how the industry could develop post Covid-19 to cope with demand and regulatory changes; and 3) discuss business model

18、 evolution over the long run and identify potential winners; Chinese insurers are integrating more deeply within the health care system, and some could look quite dif- ferent in the future.ContentsCash Flows within Chinas Healthcare SystemAn Introduction to Chinas Healthcare System10 Role of Key Pla

19、yers21Chinas Healthcare System in a Global Context23 Strengths and Weaknesses of Chinas Healthcare System25 OutlookMCash Flows within Chinas Healthcare SystemExhibit 1:FOUNDATION*Based on FY17 dataSource: CBIRC; NHDRC, China Healthcare Statistics Yearbook; Morgan Stanley ResearchAn Introduction to C

20、hinas Healthcare SystemA convoluted system: Key playersPatients: China offers greater choice than tends to be available in most other countries in terms of healthcare access. Referrals are often not required to see specialists, and people are free to use hospi- tals for consultations, check-ups and

21、operations. However, patients do complain that wait times can be long for tertiary hospitals, and that reputable doctors and medical resources are not evenly distrib- uted between rural and urban areas.Payers: Chinas medical costs are paid mainly by government-run social insurance schemes. The count

22、rys commercial health insur- ance market has taken off in recent years, but still more as a supple- mentary pillar to help close gaps in the public system. With accelerating medical cost inflation, both the public and private sides are, to an increasing extent, aiming to curb spending and improve ef

23、fi- ciencies in the use of insurance funds.Providers: China runs large public-owned hospital networks, but commercial mechanisms gained a significant foothold in this arena during the countrys opening-up and reform period so that hospi- tals are now mostly operated on a self-sufficient basis with no

24、t much in the way of government subsidies introducing a key hurdle in todays healthcare reforms. Private hospitals have been allowed since 1988, with private beds reaching 1.7mn as of end-2018 (20% of total hospital beds), albeit largely in specialty hospitals covering both low- and high-end custome

25、rs.Producers: The pharmaceutical and medical equipment manufac- turing segments are mostly dominated by private enterprises, either local or global players, numbering over 7000 such enterprises. To achieve better cost savings, governments are hoping to consolidate the market and speed up the process

26、 to have domestic production of essential drugs and medical equipment in lieu of imports.Exhibit 2:Key stakeholders in Chinas healthcare system: Patient - Payer - Provider - Producer modelPatientHealthcareservicesDistributorsFiscal supports/ insurance paymentsPayersProvidersProducersGovernment/ empl

27、oyers/ individuals/ commercial insurance/ philanthropyHospitals/ Primary care/ Physicians/ Pharmacies Online healthcarePharmaceuticals/ Biologics/ Medical devices/ HISSource: Morgan Stanley ResearchThe iron triangle of healthcare still unbalanced in ChinaThe iron triangle of healthcare. Academic res

28、earch often evaluates a healthcare systems efficiency based on three aspects: ensuring access to healthcare, promoting the quality of healthcare, and con- trolling the cost of healthcare aiming to achieve three ultimate policy goals: public satisfaction, positive health outcomes, and finan- cial pro

29、tection. Improvement in care access can be achieved through more comprehensive insurance coverage, but opening up access often drives up demand, utilization and costs. Improvement in care quality can be enabled by technology advancement, but it is also more costly to use new drugs and the latest tec

30、hnologies. These are inherent trade-offs in the healthcare system, and policy reforms are typically facing contradictory goals, prompting the need for a bal- ancing act.Exhibit 3:Trade-off in universal coverageSource: WHO; Morgan Stanley ResearchExhibit 4:Chinas healthcare spending is projected to r

31、each Rmb15trn by 2030Rmb, trn%Still unbalanced in China. China, like many other countries, is alsofacing significant challenges in pursuing all three goals at the same time. In the past 10 years, Chinas healthcare reforms seem to have252015 5 5 5 5 5 56 6 6 6 67 7 7 7 88 8 8 8 8 9 1081314 15126achie

32、ved more in “broadening access” by establishing new social insurance regimes and putting 1.35bn members of its population back onto a public coverage system, despite the still-high disparity between rural and urban populations. However, the quality and cost10252 3 3 3 4 4 505 6 6 6 7 89 10 118422009

33、2010201120122013201420152016201720182019202020212022202320242025202620272028202920300sides of the equation are still far from satisfactory. China still lacks effective laws and regulations on care providers, treatments, and medical products, and faces greater variations in the training and edu- cati

34、on of doctors, and suffers a likely overuse of drugs, tests and treatments all creating room for improvement in quality of care delivery. In terms of cost, China has seen rapid growth in healthcare spending (emulating the trajectory of that in western countries), insufficient protection for individu

35、als (still high out-of-pocket expen- diture and low coverage on critical illness), and a problematic fee-for- service hospital payment model (leading to overprovision and inefficiency).Health expenditure (LHS)Health expenditure as % of GDP (RHS)Source: NHDRC; Morgan Stanley ResearchA recap of recent

36、 reforms Chinas path to universal coverage1949-1978. Chinas healthcare system has come a long way as com- pared with where it started, and the countrys modern healthcare system was built through three major stages. The initial phase fol- lowed the establishment of new China in 1949, a period when he

37、alth- care was delivered through government-owned hospitals and supplemented by community services (known as barefoot doctors). Nearly 90% of the rural population was covered by a cooperative medical scheme (CMS), and nearly 90% of the urban population was covered by labor security insurance and fre

38、e public medical services for civil servants. A near universal coverage system was built under the planned economy, and life expectancy almost doubled from 35 in 1949 to 68 in 1978 ( Exhibit 5 ).1978-2003. However, as China opened up and transitioned toward a market-based economy from 1978, governme

39、nt support for hospi- tals, community services, and social insurance plans fell materially, resulting in a shortage of coverage.Exhibit 5:Life expectancy further improved to 77yrs olde64686971757735Ag 9080706050403020101949195419591964196919741979198419891994199920042009201420190Source: National Sta

40、tistics Bureau, China Government, Morgan Stanley ResearchOnly the urban population had access to health benefits provided by governments or state-owned enterprises, leaving most of the rural population uncovered. Hospitals, although remaining state owned, became more profit-oriented, as they were al

41、lowed to generate profit from markups on drugs and medical consumables, in order to survive financially amid significant government subsidy cuts (50% during the 1980s to just 10% in the 1990s for hospitals).2003-present. Another round of major reforms was officially launched in 2009 to rebuild the h

42、ealthcare system, but policy research and debates had begun, in fact, from 2003, spurred by a SARS outbreak, which exposed flaws and problems in the healthcare system. After 10 years effort, China now has successfully put 1.35bn citizens (95% of population) back under its new basic social insur- anc

43、e plans, with out-of-pocket spending down to 29% in 2018 (vs 60% in 2001, Exhibit 6 ). The health delivery system is also under- going changes to make drugs / medical consumables more affordable by removing markups, and to make healthcare more accessible through primary care systems, although reform

44、s here appear to be more difficult. Still, China is aiming to achieve universal healthcare again by 2030.Exhibit 6:Out-of-pocket health expenditure dropped to 29%7060504030 20201006029%197819801982198419861988199019921994199619982000200220042006200820102012201420162018Source: National Health Commiss

45、ion, Morgan Stanley ResearchMExhibit 7:Key healthcare reform time lineSource: The State Council, CBIRC, NHC, NHSA, Morgan Stanley ResearchFOUNDATIONRole of Key PlayersPatients - Demographic and disease spectrums becoming similar to that of DM countriesAging population. China has 18% of its populatio

46、n above age 60, and this level will increase to 25% by 2030 ( Exhibit 8 ). This will likely exacerbate the medical cost trend, as seniors, on average, spend twice the level that young people spend on healthcare ( Exhibit 9 ).Exhibit 8:0-2525-45131933132033162245-60182460253632313434292839Population

47、at age 60 will reach 25% by 2030% 1008060402020052010201520182030E0-45-1415-2425-3435-4445-5455-6465+0Chronic illness. China also faces the challenge of an ongoing rise in chronic illness. The nations disease spectrum has started to becomes similar to that of developed countries, with over 300mn peo

48、ple having hypertension or diabetes. At the same time, China has the highest drinking and smoking population ( Exhibit 11 ). Research shows that lifestyle is a critical factor in determining peoples health (30%, Exhibit 10 ), and a change in patient behavior is urgently needed to help make Chinas he

49、althcare system more sustainable.Exhibit 9:Per capita healthcare cost spending, by age groupRmb1,0727353864792472453261901,2001,000800600400200Note: 2030 forecasts by the State CouncilSource: National Statistics Bureau, State Council, Morgan Stanley ResearchSource: 2019 Health Insurance Development

50、Report, Morgan Stanley ResearchExhibit 10:Genes andBiology, 10Determinants of personal health*%Social and Economic Factors, 40Environment,10Clinical Care,10Exhibit 11:Chinas smoking/Chronic disease patientspeople300270114mn 350300250200150100500Hyper-tensionDiabetesSmokingSource: NHC, China CDC, Mor

51、gan Stanley ResearchHealthbehaviors, 30* Health behaviors include smoking, obesity, stress, nutrition, blood pressure, alcohol, drug use Source: 2014 research conducted by Minnesota department of healthPayers - Funding pressure loomingChina has not yet evolved into a holistic healthcare system. Heal

52、thcare financing and delivery are still quite disconnected, lacking shared goals and incentives and resulting in a waste of funding and resources. The sustainability of its social insurance fund is an emerging concern, and government has stepped up cost contain- ment measures to address efficiency i

53、ssues.Social insurance has assumed a major role. China has not yet con- solidated into a single-payer system, but is less patchy now, after years of reform and integration. 71% of Chinas total health expendi- ture ( Exhibit 12 ) is currently funded by government subsidies/insur- ance plans. Its soci

54、al insurance plan contains two subsegments: 1) urban employee basic medical insurance (UEBMI), and 2) basic med- ical insurance for urban and rural residents (BMURR), a new plan recently formed (in 2016) by merging the previous urban resident basic medical insurance and the new cooperative medical s

55、cheme for rural residents. UEBMI and BMURR have quite different funding sources and protection levels. The former is financed from payroll taxes jointly contributed by employees (2% of salary) and employers (6-10% of salary), and hence enjoys a higher reimbursement ratio, at roughly 72%.Exhibit 12:C

56、hinas total health expenditure, by funding sourceThe latter is funded mainly by various levels of government subsidies (Rmb520 per person) and the individual pays the rest (Rmb250 per person in 2020). Since its premium rate is only 20% of that in the UEBMI plan, the reimbursement ratio is also lower

57、, at about 56%. To broaden benefit packages and reduce disparities, the government intends to further consolidate insurance plans under the newly established social insurance regulator, NHSA (National Health Security Administration), although a detailed timeline has not been specified yet.Funding su

58、stainability could be a key concern. Chinas healthcare spending has risen from 5.0% of GDP in 2009 to 6.4% of GDP in 2018 ( Exhibit 13 ). The rate of increase in healthcare spending has also been accelerating in recent years, from 7% during 1998-2008, to 15% in the recent ten years, almost twice the

59、 rate of GDP growth. With an aging population and rising incidence of chronic diseases as a con- sequence of lifestyle change, funding pressure is likely mounting. Currently, the social insurance fund in China is running a Rmb2.7trn surplus as end-2019, however, claim payments are outgrowing pre- mi

60、ums in recent years for social insurance funds, which could run into deficit if costs can not be controlled. We also note the plan already has 26% of its members retired (no longer making contributions) and this ratio will only increase in the next few years due to Chinas agingExhibit 13:Total healt