China In-Depth: Smart Aging
Unleashing the free market has brought universal healthcare and education to China’s masses. However, longer lifespans and falling birth rates also means a looming retirement crisis. One Chinese person in six is now over 60. By 2025, nearly one in four will be. Additionally, China’s tradition of caring for aging parents is creaking as career orientated young professionals prioiritise promotion over parental care. Considering this, and the fact that hundreds of millions of rural Chinese have rudimentary pension provisions, the government has initiated a three-pronged response.
First, repeal the one child policy to raise the fertility rate. This won’t balance the scales by itself as women increasingly postpone motherhood, but it’s a start.
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, increasing the government care burden.
Finally, stimulate private sector investment in senior care through government contracts and tax incentives. Encouraging startup activity within the senior care segment holds most promise for technological breakthrough and has proven the case in other fields such as chronic disease management and medical devices. In light of this, several startups have emerged to provide a host of senior care use cases:
Currently, medical emergencies such as stroke, heart attacks and seizures are dealt with in a reactive rather than a proactive manner. Additionally, direct observation is needed to identify signs of a senior’s declining condition before a diagnosis is made. The Tempo is a senior care wearable from US based CarePredict that is at first glance a smart watch, but is in reality a networked all encompassing senior care wearable that leverages a smartphone’s accelerometer, gyroscope and magnetometer to deliver risk prevention and real time diagnosis to the elderly.
By outfitting seniors with one of CarePredict’s monitors, it can detect deteriorating balance and anomalies in movement before serious falls happen. Additionally, in the event of a fall, the Tempo has an emergency alert button as well as a continuous location monitor that notifies caretakers if the wearer is wandering or stationary for an extended period of time. Although a wearable that tracks balance may seem simple, the fact that falls account for the highest number of accident related deaths among the elderly underscores the need for advanced solutions in this space.
- Dr. Brain
Alzheimers is a global epidemic. In China, sufferers 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, the private sector will play a crucial role and several startups have emerged to help diagnose and manage this incurable disease. Of these efforts, Dr. Brain is the most notable for its focus on diagnosis. Dr. Brain’s CEO, Lawrence Wang, has established partnerships with dozens of hospitals across China to build a cloud based database that makes it easier for trained medical staff to quickly diagnose the disease through the Dr. Brain app.
Although 80% of retirees will experience hearing loss, less than 5% of those suffering from hearing impairments in China have access to specialised care and hearing aids, compared to over 40% in the West. The fact that over 60 million Chinese are hearing impaired only bolsters the opportunity for private enterprises in this space. Although not a startup, Sonova is a medical device company using 3D printers to customise hearing aids for the Chinese market at at specialized R&D facility outside Shanghai. The Sonova hearing aid is based on a low-energy microchip and enables direct streaming from any bluetooth enabled device, thus circumventing the traditional amplifier based design.
mCloud is a Chinese senior care startup and this month’s InsurTech of the month. The company’s flagship product is a blood pressure monitor coupled with a full spectrum app that provides real time reporting to a senior’s doctor and appointed family members.
In addition to the blood pressure monitor coupled with a health/wellness app, other mCloud services include:
- Blood glucose meter – as elderly people are more prone to develop diabetes.
- Fetal listener – to assist first time mother’s with the second and third trimester of pregnancy.
- App based Stetascope – to detect heart anomalies and cardio.
- Infrared ear thermometer – to measure fluctuations in body temperature.
All the above devices integrate seamlessly with the mCloud app and can be operated by an elderly person’s relatives and relayed to doctors.
However, technological innovations aren’t the only efforts being pursued by Chinese startups, nuerogical breakthroughs are also under way. Hong Kong based Oper Technology is artificially regenerating cells which have died off due to neurological diseases such as dementia and Alzheimers, and although still in its nascency, Oper has demonstrated the ability to slow down or even halt the degeneration process.
Retirement Communities Development
The fact that half of China’s 200 million seniors live alone, in addition to an increasing reluctance of the younger generation to stay home and care for aging parents has spurred several Chinese life insurers including Taikang, Union Life, and China Life to develop retirement communities outside of major urban centers. Union Life recently invested $30 million to acquire seven facilities in the Shanghai-Nanjing region and notwithstanding the fact that private facilities require significant upfront investment and have ongoing labour costs, several other life insurers have followed suit. Taikang Life’ most recent venue can accommodate up to 2,000 people, and is complete with a hospital, cinema and gym.
Yet despite this progress, China still lacks regulations covering quality standards for caregivers as well as a government-sponsored accreditation processes that would allow consumers to judge reputable facilities from those that should not be trusted.
Although establishing retirement communities is not unique to Chinese life insurers, the multi-disciplinary skill set required to deliver hospitality and palliative care is a necessary level of commitment typical of those pursuing these ecosystems. However, this entry into real estate development by life insurers also involves a delicate balancing act whereby insurers are pursuing government supported initiatives (such as developing retirement communities) with regulatory concerns about insurers operating outside their core competency. By doing so, Union Life and others will continue to consolidate their ecosystem, bolster their offerings, and diversify their operations.
The current efforts to modernise senior care in China show that change within its senior care model is not only attainable, but necessary. Although a rapidly aging population is presenting unprecedented challenges, a host of senior care solutions, combined with government supported programs, are empowering the elderly to manage their health remotely. However, for China’s life insurers, the ultimate test will be whether this traditionally loss making segment can be profitable, as their western counterparts have already proven.