What makes China compelling? Sure, it’s a huge and largely untapped market. But what I’ve always found most compelling about China is its potential to leapfrog the status-quo and create something new, to unwittingly break paradigms if for no other reason than not knowing how it approaches a problem isn’t the conventional way to solve the problem. As just two examples, look at China’s telecommunications and electrical distribution and control infrastructures. Both have their flaws (the latter in particular as any factory owner in Shenzhen will be happy to tell you), but each illustrates how China can take the way something is currently done and spin it on its head.
Telecomm is a great example of this: China never bothered to build the hardline infrastructure which America and Europe both have. Rather, China made massive investments in its mobile infrastructure, a difference between our two countries’ respective technology capabilities that Tom Friedman recently poked fun at. Let me suggest that one other example where China is going to break old (and create new) paradigms is in healthcare. Specifically, in the role home healthcare could play addressing China’s expansive problems with healthcare access and inequality to what little services do exist.
Lua’s recent blog post on the JP Morgan report covering China’s investment in healthcare has left my mind churning. The numbers from the report are staggering: 29,000 township hospitals, upgrades to another 5,000. Even if these investments happen as planned, and even if they are managed successfully (keeping in mind China’s track record of building versus managing new infrastructure needs to be kept on two distinctly different tracks), the question remains whether all this new capacity will actually help? Or, to say it another way, if China chooses to simply replicate the model for healthcare delivery that has worked in western developed economies, is it missing the transformative opportunity to dismantle the hospital-centric mode for delivering healthcare?
Let me be more specific: one of the most powerful trends in American healthcare is the de-emphasis on the role of the hospital as the centralized location for patient treatment and the emphasis on decentralized home healthcare. The CDC’s most recent report on the topic showed that in 2007 1.5 million people were treated at home in the United States with an average treatment period of 315 days. An Ohio State study on the question pegs a much higher number, suggesting that over 12 million people in the United States will be under some sort of home healthcare in a given year.
Several trends have facilitated the expansion of home healthcare in the America market: financial rationalization has created visibility on the enormous savings made possible by getting patients out of the hospital back into their home, technology has empowered home delivery of nursing and – in particularly advanced organizations – doctor care, and business model changes (doctors going from being independent businesses to employees) has enabled centralized healthcare providers to disrupt the model of delivery for healthcare even in the entrenched and traditionally hierarchical American market.
If this has worked in the United States, then let me suggest it might work even more so in China. Again, even if China builds the before-mentioned 29,000 township hospitals, guess what; it still won’t be enough. Massive inequalities in terms of access to hospital care will still exist. The more interesting question is whether China can embrace (or get out of the way of entrepreneurs who can facilitate) entirely new models of healthcare delivery. The technologies and service models that would best facilitate these new models would be those that could be most easily adopted in China.
Here is the game-changing potential that China’s home healthcare model might embrace: think about and build upon the insights that come from studying Mao’s barefoot doctor brigades. While pointing back to a policy mandate from Mao might seem silly, even today social scientists and specialists in healthcare delivery for third world countries acknowledge that what Mao accomplished with this effort (in particular what was done post the 1940s Civil War) created meaningful improvements in the quality of life as measured by maternal care, infant survivability, immunizations and treatment of easily communicable diseases.
What did Mao figure out that is relevant to today’s home healthcare opportunity in China? First, avoid a service model that is overly centralized. Instead, rely on empowered individuals who can deliver meaningful healthcare services to your constituents. Be agnostic about whether this is a doctor, nurse, physician’s assistant, or other China-sensible equivalent. Avoid centralized services and emphasize de-centralized empowered caregivers. Second, avoid using western standards to measure ideal outcomes. What China needs are the basics. This can easily get lost when companies from developed economies peer into the county with perceptions and ideas that are deeply rooted in the experience their business has delivering healthcare in developed markets. Make sure your expectations for what a successful outcome in China looks like are not too far ahead of what a Chinese person anticipates. Third, figure out a way to get exposed to the ecosystem that is China’s healthcare market before you have a specific business model in mind. Too many entrepreneurs and established businesses think that they need to jump head first into China’s healthcare market with a model they think will work based on experiences in North America. No. Trust that with some basic exposure to the healthcare market in China you’ll find a way to plug in and benefit from China’s untapped need for better healthcare services. The over-arching theme is this: what might ultimately prove to work for China’s healthcare market are ideas that are just proving to take root in the American healthcare experience. With that in mind, the most impactful business ideas that are likely to work in China are those that we have tried in the United States and Europe, but are as of today still being proven because they are so disruptive to the established order.
I totally agree with your analysis, but I think convincing the Chinese population to “be agnostic about whether this is a doctor, nurse, physician’s assistant, or other China-sensible equivalent” will be difficult if not impossible. It seems that anyone who can afford to do so will continue to flock to the “superior” doctors/hospitals in big cities for the sense of security and status, even if they could get the same outcomes from a non-doctor medical professional in their village/town.
Stephen – Thank you for your response. Let me push back a bit: the parallel I think can be drawn from China’s history is the improvement in healthcare driven by Mao’s doctor brigades. These were much closer in actuality to medical army “doctors” than real doctors, but the improvement in quality of life as measured by infant mortality, spread of infectious diseases, etc. was real. As such, I think it suggests you could deliver in any variety of ways as long as the outcomes were better than the existing normative care.
[...] may well quickly outpace in terms of people cared for. If this happens, it will support an idea I have written about earlier, that opportunities in China’s healthcare system will reflect the same technology adaptation we [...]