Yesterday, Health Affairs published a new research paper discussing how China’s central government should guide the development of the country’s senior care infrastructure. The result of analysis by four Chinese researchers, Zhanlian Feng a Research Analyst at the Aging, Disability, and Long-Term Care Program at RTI International, Chang Liu a doctoral candidate in the Department of Health Services, Policy, and Practice at Brown University, Xining Guan the chair of the Department of Social Work and Social Policy and director of the Institute of Social Development and Administration at Nankai University, in China and Vincent Mor the Florence Pierce Grant Professor of Community Health in the Public Health Program at the Brown University School of Medicine. Readers may remember a past discussion with Zhanlian Feng we published covering his research on the existing senior care infrastructure across China, and specifically what the industry’s current reputation was by average middle class Chinese. Yesterday’s publication builds on this analysis, with a more explicit set of recommendations for the Chinese government as the senior care industry expands.
Their analysis centers on three key recommendations: “building a balanced system of services and avoiding an ‘institutional bias’ that promotes rapid growth of elder care institutions over home or community-based care; strengthening regulatory oversight and quality assurance with information systems; and prioritizing education and training initiatives to grow a professionalized long-term care workforce.” Each of these suggestions are ones various industry practitioners and analysts have made before, but I found this particular paper to offer more explicit guidelines than what has been made public thus far. In this way, it is both another meaningful contribution to the industry’s evolution while also speaking to a broadening awareness by industry and government that more direct action will be necessary by government in order for scalable and sustainable businesses to emerge.
Zhanlian’s research in particular bridges an important gap in our understanding of the senior care industry. Specifically, in his past published work he has that began as government financed facilities to serve the indigent have evolved to now house private pay individuals. The market evolution he is watching – from government funded homes for those unable to pay towards government provided facilities that families pay for care to be provided to elderly parents – is a critical mechanism that shows how the middle class in particular is beginning to access senior care services in China. This bottom-up market evolution is not trivial: it is creating meaningful capacity in the marketplace. As yesterday’s Health Affairs article points out, “In Tianjin, for instance, there were only 4 facilities in 1980 (all government run), but there were 13 by 1990, 68 by 2000, and 157 by 2010 (20 of these facilities were government run, and 137 were privately run). Similar rates of growth were also observed in Nanjing and Beijing.” Tied to this bottom-up facility based solution is China’s publicly stated preference for home healthcare, even if, as the paper points out, thus far the results here have been inconsistent.
The four researchers who contributed to the Health Affairs paper identify a set of incentives regional governments provide developers. What I found most interesting was not the land incentives, many of which we know about, but two subsidies provided on the basis of the number of beds the developer builds. One is provided initially when the facility is built, the second on an ongoing basis. The combination of a compelling demographic need alongside these sort of multi-faceted incentives have resulted in a huge influx of domestic and foreign entrepreneurial efforts. This is all good, provided several key issues are addressed by the central government; and, the sooner the better.
First, at perhaps most importantly, the need for what the researchers call a “national regulatory framework.” We have written on this in the past and fully agree with what these four researchers propose. They identify four key regulations: Provisional Measures for the Management of Social Welfare Institutions (the over-arching regulations covering “all types of social welfare institutions”), the Code for Design of Buildings for Elderly Persons, the Basic Standards for Social Welfare Institutions for the Elderly, and the National Occupational Standards for Old-Aged Care Workers. Here is where the rub is (as, it should be said, is an issue in almost every area of regulatory enforcement regardless of industry in China): what are promulgated by national rule making and supposedly rule enforcing bodies and how these are implemented locally are wildly divergent.
Second, the four researchers see the possibility that what little bit of regulatory oversight and government guidance does exist is skewed towards housing and facility based solutions. This creates, as they write, “an institutional bias in the country’s fledgling long-term care system.” I found this point very important: if the bulk of China’s regulatory system is built around the idea of housing and residence care, but we know most Chinese will be unable or unwilling to access this product set, then it is all but inevitable the home healthcare industry will suffer from ongoing lack of regulations and – perhaps just as importantly – a lack of constructive attention in the areas of possible incentives to home healthcare businesses and training programs specific to the needs of this sub-sector of the broader senior care industry. Given the outsized role real estate development has played creating wealth for China’s developers and municipalities, the linkage between senior care as a full product set some of which will decidedly not include housing and the fixation on real estate transactions suggests the “institutional bias” the authors worry about is well underway.
Third, the researchers identify trained workers as a key issue that needs attention from China’s government. They write, “The majority of direct care workers are inadequately trained and poorly paid. Even the most optimistic estimate suggests that fewer than one-third of all direct care workers providing elder care services have received any professional training.” In past analysis, this has been a constant theme, but it bears repeating: if China’s 12th 5 Year Plan can stipulate and create funding to push out 150,000 new primary care physicians, nurses and vocational workers to staff an and clinics, then what could the central government achieve through a similar focus on the country’s nascent senior care workforce? Given the enormous need for trained workers, and the potential social instabilities set in motion if China proves unable to holistically meet these needs, now seems like a good time for a similarly concerted action.
Overall, I found this article a helpful contribution on a number of fronts, not least of which is to illustrate how a handful of issues – a consistent regulatory framework, the need for a body of policies that do not skew too heavily towards pure housing-based products, and the desire to see China’s government get much more active in the development of its senior care human resource capabilities – are becoming the consistent points brought up by both academics and business. What China’s government will do with this crescendo remains to be seen.
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