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China In-Depth: Chronic Disease Prevention in China

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China’s health system is characterized by two conflicting attributes: nearly universal coverage by public health insurance yet widespread concern about the cost and quality of medical procedures as even those covered must pay significantly if they require operations, patented drugs or medical devices. The fact that China suffers dis-proportionately from chronic diseases only compounds this difficulty. Acknowledging this, the government has initiated a three-pronged response to reduce the burden on state run healthcare.

First, stimulate private sector investment in healthcare through government contracts and tax incentives. Making government held health records available for modeling by private reinsurers engaged in public/private partnerships is an example of this.

Second, enlist the insurance regulator to ensure life and health insurers focus on protection orientated rather than savings orientated products. Single premium participating products currently account for 90% of life insurance policies in China, exasperating the protection gap and increasing the government care burden.

Finally, encouraging startup activity within healthcare holds much promise and has already proven crucial in addressing other national challenges.

Considering these efforts, there is a clear recognition amongst senior government officials that it’s not enough to invest in basic health provisions, but an increasingly urgent and parallel need to invest in chronic disease management solutions. This month we take a look at some of the most prolific of these chronic diseases, the startups tackling them, and the role that life/health insurers will play in this effort.

1. Diabetes

Nearly 114 million diabetics live in China but less than 25% of them have access to adequate blood glucose control methods, adding to the government care burden. In fact, 80% of treatment costs for diabetes can be prevented with adequate management. Although a number of diabetes management apps have emerged, Beijing based Dnurse is notable for its marriage of a traditional blood glucose meter with an AI based diabetes management platform to deliver personalized recommendations to China’s diabetics in real time.

Two key innovations have marked out Dnurse. The first is an automatic insulin dosage tracker which became the first CE approved smart glucose meter in China. The second is an AI driven recommendation engine called the IDSS (Intelligent Decision Supporting System) that is synced with both the patient and doctor Dnurse app to enable seamless doctor-patient communication whilst minimizing response time in case of seizure or overdose.

 

2. Obesity

China’s economic ascent has brought a new middle class with disposable incomes, but with this also comes the excesses of over consumption. The average Chinese diet now contains twice as much meat and oil as it did in the 1980s, and obesity related conditions such as heart disease account for a staggering 44% of Chinese deaths over the age of 35.

Although several life insurers have already launched fitness apps that offer ease of access whilst overcoming some limitations of traditional in-person weight loss programs, the ability of a smartphone pedometer to meaningfully lower obesity rates is still unclear and many fitness apps have realized that they will need to bring their users to the gym in order to get them in shape.

In light of this, some insurers are looking beyond step counters and sleep trackers to delve deeper into health/wellness. For example, Shanghai based BitsxBites is a food tech accelerator with increasing interest from life and health insurers. The opportunity for insurers to partner with food tech startups is two fold, first being recognized as a preventative healthcare provider as opposed to just pure re-imbursement entity in addition to achieving customer engagement that goes beyond mere fitness and diet plans that currently constitute the majority of life/health insurers health&wellness offerings. Secondly, partnering with startups that are addressing obesity related behaviors will lower the loss ratio incurred from suffers of obesity related chronic diseases in addition to identifying those likely to succumb to these ailments. Joseph Zhou, an investment partner at BitsXBites recently underscored the opportunity for insurers to partner with food-tech startups: “China is second only to the U.S. in obesity rates, for both adults and children, as technology is the most powerful enabler we can use to reverse this trend, we are looking for sustainability startups companies that are addressing this issue.”

 3. Alzheimers

Alzheimers is a global epidemic and sufferers in China are set to reach 40 million by 2040, half the worldwide total. Although government funded Alzheimer’s support centers and national broadcasts have succeeded in raising awareness, several startups are playing a deeper diagnostic and disease management role. Of these, Dr. Brain is notable for its focus on diagnosis and ongoing management as opposed to carer services. Specifically, Dr. Brain has established partnerships with dozens of hospitals across China to build a cloud based database upon which it can train medical staff to quickly diagnose the early onset of Alzeihmers through the Dr. Brain app.

For it’s part, the government has made it easier for startups such as Dr. Brain to partner with public hospitals in addition to providing funding for medtech startups in tier two cities.

4. Blood pressure

Although seemingly benign, falling is the leading cause of injury related death for the elderly and changes in blood pressure levels is the leading indicator of an impending fall. mCloud is a Shanghai based startup that has coupled a blood pressure monitor with a full spectrum app that analyses blood pressure along 12 metrics such as cardio performance and blood/glucose levels. in addition to providing real time access to doctors, drug schedule and drug expiry reminders.

In addition to the blood pressure monitor coupled with a health/wellness app, other mCloud services include:

  • A fetal listener – to assist first time mother’s with the second and third trimester of pregnancy.
  • An app based Stetascope – to detect heart anomalies and cardio.
  • An infrared ear thermometer – to measure fluctuations in body temperature.

The above features are all seamlessly integrating with the mCloud app and can be operated by an elderly person’s relatives and relayed to doctors on a weekly basis.

However, technological efforts aren’t the only initiatives underway in China, product innovations are emerging too. For example, the notion of ‘dynamic pricing’ could prove key in reducing the cost of treating chronic diseases such diabetes and heart conditions for which policyholders can take active steps to reduce risk of hospitalization.

In addition to triggering the integration of chronic disease management startups into life/health insurer’s offerings, dynamic pricing could result in 49% lower premiums compared to traditional pricing models by allowing life insurers to engage in the type of hyper-segmentation that has allowed western insurers to drive gains from traditionally loss making segments.

In addition to these chronic disease management efforts, several all encompassing health platforms have emerged including Tencent’s ‘WeDoctor’ and Ping An’s ‘Good Doctor’. However, digital health platforms are not just the privilege of China’s internet giants, Shanghai based CareVoice is offering insurers a ready made solution complete with access to hospital/doctor listings, integrated appointment booking capabilities, claims submittal and an A.I based virtual nurse.

Another notable development this year is Ping An’s partnership with Sanofi, a French pharmaceutical multinational, intended to advance the awareness of chronic diseases, optimize the use of big data within healthcare, and explore innovative approaches to prevention based services with Ping An Technology. The ultimate goal is to develop AI-based chronic disease screening and clinical decision support systems (CDSS).

Conclusion:

The current efforts to modernise healthcare in China show that change within its public healthcare system is not only attainable but necessary. Chronic disease management moved up the government’s agenda in 2017 however most insurers have only managed to muster step counters, diet plans and crude sleep monitoring apps despite the fact that they directly impact profitability. From a commercial perspective, the test will be whether Chinese insurers can make this traditionally loss making segment profitable, as western counterparts have already proven possible. Ultimately, although systemic inefficiencies mean the above efforts won’t eliminate the cost of chronic disease management entirely, a vibrant startup scene in addition to the fact that legacy insurers are partnering with domain experts will alleviate the chronic disease management burden currently being borne by the public sector alone.

 

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