Mar
9
HuaKang awarded First National Insurance Agency Licence by Chinese Insurance Regulator
Filed Under China, China insurance, Insurance Company, Life Insurance | 1 Comment
The China Insurance Regulatory Commission (CIRC) has recently granted HuaKang Financial Services Inc. authorisation to consolidate its existing 17 subsidiaries under their subsidiary in Shenzhen, which in turn will allow all these subsidiaries to be upgraded into branches.
HuaKang Financial Services Inc. is the first and largest Chinese life insurance agency. The company was founded in 2006 and is based in Guangzhou, China.
With permission of CIRC, new branches in China can now be setup under the name Shenzhen HuaKang Insurance Agency Co. Ltd. and carry on developing insurance agency businesses, which the company plans to augment to up to a 30% share of the national market, and aiming to float its shares by next year.
According to HuaKang, their market share in the Chinese life insurance agency sector during the first 3 quarters of last year was 25%, and more than 50% market share in the provincial markets of cities such as Shanghai, Guangdong, Jiangsu, Shandong, Zhejiang, Tianjin and Chongqing.
The business strategy for the year 2010 announced by HuaKuang is to remain focused and further develop the suburban markets of first-tier cities in China.
The current 17 subsidiaries of HuaKang are located in Zhejiang, Shandong, Hangzhou, Tianjin, Hebei, Henan, Guangzhou, Hunan, Hubei, Sichuan, Chongqing, Shanghai, Beijing, Anhui and Liaonin.
Insurance Company mentioned:
Huakang is the first nationwide independent insurance intermediary company in China which focus on individual life insurance business,in particular regular life insurance business. Huakang’s nation-wide branches and profesional sales and services teams provide customers personalised, unbiased insurance and financial planning services thanks to its dominating market share and tremendous influence in the insurance intermediary industry. Huakang has won the overall recognition from the Media, competitors and investors. IDG capital and Matrix Partners China have concluded investing RMB500 million into Huakang.
Mar
3
Sino Life Insurance gets regulator approval for Jiangxi expansion and shareholder change
Filed Under China insurance, Life Insurance | Leave a Comment
Sino Life Insurance Co. has been granted permission by the Chinese Insurance Regulatory Commission (CIRC) for a new branch in Jianxi province as well as approval for changing shareholders.
With the CIRC’s go-ahead, current Sino Life shareholder Shenzhen Wuxin Yufu Industrial Co. Ltd. is to transfer the entirety of its 180 million shares to Shenzhen International Commerce Investment Co. Ltd. After the transfer is finalized Shenzhen International Commerce Investment Co. Ltd. will have a total holding in Sino Life Insurance Co. of 397.9 million shares, constituting 17.64% of the shares in the life insurer, while Shenzhen Wuxin Yufu Industrial would no longer hold a stake in Sino Life.
Sino Life Insurance said that by the end of the first half of 2009 it had branches in 22 provinces, making its pending advancement into Jianxi province it’s 23rd. The company was started in 2001 with a registered capital of 2.08 billion yuan (US$304 million), by the end of 2009 they had total original premium income of over 7 billion yuan (US$1.02 billion).
Other than Shenzhen International Commerce Investment Co. Ltd., Sino Life also counts among is shareholders South China Investment Ltd., based in Shenzhen, Dalian Shougang Group, the Beijing iron and steel manufacturer, construction material and chemical producer Shide Group, as well as the Japan-based Tokio Marine & Nichido Fire Insurance Co. and it’s associate company Tokio Marine Asia Pte. Ltd.
Insurance Companies Mentioned:
Sino Life Insurance Co.
Established in Shanghai in 2001, Sino Life Insurance Co., the company moved it’s headquarters to Shenzhen in 2008. After starting with a market capitalization of 2.08 billion yuan (US$304 million) it has grown immensely in the Chinese life insurance market, it now operates in 23 provinces in China, employing over 300,000 people and has over 26 billion yuan (US$3.8 billion) worth of total assets.
Mar
2
Chinese Healthcare Reforms Still On Track
Filed Under China, China insurance, Health Insurance, Healthcare, Medical Insurance | 2 Comments
In early 2008, prior to the global financial meltdown of September, which caused the collapse of such esteemed institutions as Lehman Brothers, the Chinese government announced a series of reforms entitled “Healthy China 2020.” The goal of these comprehensive healthcare reforms was to institute national medical coverage which would be available to all Chinese citizens. When the Great Recession occurred, and the global economy entered a downward spiral, the need for such wide ranging legislation as the Healthy China reforms became painfully apparent as the country had no social networks in place to ensure that the population remained in a good state of health.
Departing from the “Iron Ricebowl” system in the 1990’s in an effort to catch up to the economic standards of the West meant that many Chinese nationals lost the comprehensive job security and lifelong benefits upon which they had come to depend for sustainable living. In tandem with this move towards a market economy, State hospitals in China (which currently account for more than 90% of all available medical services in the country) started to see decreases in government subsidies, and became self funding – increasing the end cost for many poor citizens, and effectively putting the cost of quality medical treatment out of reach for most of the Chinese populace.
According to the World Bank, more than 300 million Chinese citizens are without any form of health insurance, with only partial coverage available to the remaining 1 billion-strong population. As a consequence of this, ordinary Chinese must save approximately one quarter of their income each year in order to guarantee that should they fall ill, they will have the means to pay for medical services. As such, the amount of savings accumulated to cover the costs of medical procedures may exceed US$ 5 trillion according to industry analysts. In light of the Central Government’s desire to modernize the economy and move from exports and investments to domestic consumption, the “medical savings” of the Chinese populace present a valuable resource to insulate the country against another external financial crisis, while providing the means to ramp up domestic spending. However, without some form of comprehensive social security guarding against serious health care issues facing the People’s Republic of China, these funds are unlikely to be freed up.
At the height of the economic downturn China’s GDP growth dropped to its lowest level in a decade, a mere 6.1 percent in Q1 2009. The People’s Congress has long had an end objective of 8% GDP growth year-on-year, which was achieved at the end of 2009 due to a record US$ 586 Billion infrastructure stimulus released at the end of 2008. The GDP Growth rate ended the year at 8.7%. However, the GDP growth was a result of increased exports as China leapfrogged Germany as the world’s largest exporter of goods; consumer spending, on the other hand, the Central Government’s top priority in the 2006-10 year plan, remained stable at 35% of the GDP.
As a consequence of this, the Politburo has called for the emphasis on consumer spending outlined in the 2006-10 year plan to be sped up. In a February 22 meeting, chaired by President Hu Jintao the Politburo discussed initiatives which will be outlined in a speech by Premier Wen Jiabao on March 5 of this year. The initiatives are expected to be a continuation of the stimulus outlined in April 2009 when the Central Government announced that it would spend approximately US$ 125 billion on healthcare between 2009 and 2012 in an effort to institute universal medical coverage by 2020.
The direct result of these announcements by the Chinese Government has been an increased interest by both foreign and domestic business entities towards the Chinese Healthcare Market. Eli Lilly & Co spent US$ 15 million in 2009 to acquire a 15% stake in CITIC Pharmaceutical Ltd., a leading pharmaceutical and drug distribution company in the People’s Republic of China. The Shanghai based company; China NovaMed Pharmaceuticals also saw interest from foreign businesses, with Fidelity Asian Ventures obtaining a stake in the company at the end of 2008. Credit Suisse AG estimates that the Chinese pharmaceutical industry will expand from its current value of US$ 44 billion in 2008, to over US$ 110 Billion in 2015; figures which have many corporate interests seeing expanding opportunities across the nation.
However, this growth of the pharmaceutical industry may present some issues. In the USA, one of the key problems with regards to medical affordability is that the cost of prescribed medications has experienced rapid inflation over the last decade. The Chinese government, realizing the potential threat raised by upward spiraling drug costs, took steps to address the problem in August 2009 by placing a price cap on 307 essential medicines commonly used by rural hospitals around the country. Further to this, in November of the same year, the list was expanded to include an additional 770 medicines deemed “necessary”; a move which could see the average cost of consumer medications fall by up to 12% according to a Goldman Sachs report.
Outside of the Pharmaceutical industry, other healthcare related markets are looking to spur their Chinese growth as it becomes more evident that the current Rural-Urban healthcare divide will be lessened in the near future enabling more Chinese nationals to obtain quality medical services. A key part of this is with regards to the technology used by medical practitioners throughout the country, which is quite often severely out of touch with modern standards. As such, the Medical Device industry has also seen a renewed interest in providing products and services to the domestic market. GE Healthcare, a subsidiary of Connecticut based General Electric, saw it’s CEO visit the country at least twice in 2009, pointing to a higher interest in the Chinese market on the part of the corporate giant. Royal Philips Electronics also sees more opportunities for medical device makers in the future, as China surpasses North America as the biggest consumer of Medical Scanning Technology.
With a massive injection of stimulus funds over the next 3 years, the nation is making its first steps to radically revitalizing a healthcare system which has, historically been plagued by a myriad of problems. From the failure of the Barefoot Doctor Scheme in the early 1980’s, to the current rural AIDS epidemic, the reforms proposed by the Central Government hold a glimmer of hope for a much beleaguered healthcare system; and present a host of opportunities to the international business community.
Feb
8
Insurance Startups in China and India
Filed Under BUPA, China, China insurance, Health Insurance, Insurance Company | 10 Comments
Two new insurance companies are working their way through regulatory boards in developing economies as of today, February 8, 2010. The India-based Max Bupa Joint venture is part way through the Indian regulatory framework, while further east, the China Insurance Regulatory Commission gave the go-ahead for the establishment of Anbang Life Insurance Co. Ltd.
The independent joint venture between Max India and Bupa International, dubbed Max Bupa Health Insurance, is half way through the regulatory barriers and expecting get full approval in order to start its operations in March. The Indian insurance regulator, IRDA, has three stages of approval: the first being R1, where the promoters are evaluated by the regulators; R2 is the stage at which the proposed business model is evaluated and R3 is where the formation of the country is approved.
The joint venture will be focused on providing a range of health insurance products targeted at both individual consumers and business customers. The starting capital of the JV is £12 million, and will see Max India control 74% with the Bupa Group taking 26%, which is the maximum amount permitted under India’s laws covering foreign investment in local companies.
The establishment of Anbang Life Insurance on the other hand, has already been approved by the China Insurance Regulatory Commission (CIRC); it has registered capital of 500 million yuan. The regulator confirms that Anbang Life has five shareholders: Anbang Property and Casualty Insurance Co., Ltd.; a Zhejian-based motor sales company; Liantong Rental Group, a motor rental company; and two investment companies. Anbang Life Insurance will focus on the provision of domestic life insurance policies in the Chinese market.
Companies Mentioned:
Max India:
Incorporated in 1988, Max India Limited is a holding company with business interests working in the healthcare and services industries. Their wide range of health related interests include a joint venture life insurance company, Max New York Life, a healthcare services company, Max Healthcare, and a clinical services company, Max Neeman Medical International. The Max India Group reported US$ 860 million in revenues for 2007-2008 and will soon add Max Bupa to their list of businesses.
Since being started in 1947, The British United Provident Association, or Bupa, has grown to an international company offering health insurance, health and care services to over 10 million customers in 190 countries around the world.
Anbang Property and Casualty:
Founded in 2004, Anbang Property and Casualty Co. Ltd. sells accident injury, short-term health and property/casualty insurance in 37 provincial branches throughout China and more than 300 sub-branches. The company has registered capital of 5.1 billion yuan and its shareholders include Shanghai-based SAIC Motor Corp. and Sinopec Corp.
Feb
4
International Health Insurers Expanding Overseas Operations
Filed Under Allianz, BUPA, China, China insurance, Expat Insurance, IHI Bupa, IHI Danmark, Insurance Company, Spain | 3 Comments
Both Bupa and Allianz are making moves to expand their international operations this year. Bupa has added a sales and support center in Fuengirola, Spain to provide administrative support for Bupa International and IHI Bupa customers. The 12 person service center will also aid distributors in Europe, Africa and the Middle East.
Allianz, on the other hand, is opening new gateways in China. It has recently been given approval from regulators to change the status of their fully-owned Allianz Insurance Co. Guangzhou Branch from a branch office to a subsidiary of Allianz Versicherungs A.G.
Previously, China only allowed foreign joint-venture companies to enter two new provinces a year. Changing the status of the company to a subsidiary makes the company an independent legal entity which allows it to apply for setting up its own branch offices in other provinces in China. While this may allow Allianz to enter more than two provinces in China per year, it still depends heavily on collaboration and negotiations between the Allianz subsidiary and a variety of Chinese regulators.
The Allianz casualty and property branch office opened in 2003, they have been growing their business selling engineering, domestic credit, liability, property, marine, short-term health insurance and accident insurance in the province to clients both foreign and domestic.
Given the new opportunities for expansion into new provinces, Allianz intends to keep the focus on growing their core industrial and commercial business, as well as expanding retail distribution of their products during 2010.
Companies Mentioned:
Bupa – Since being started in 1947, The British United Provident Association, or Bupa, has grown to an international company offering health insurance, health and care services to over 10 million customers in 190 countries around the world.
Allianz – Founded in 1890 as an accident and transport insurer, Allianz has grown into a international insurer with over 75 million customers in approximately 70 countries.
Aug
28
The public system; definitely cheap, not so safe.
Filed Under China insurance, Health Insurance, Healthcare, International Healthcare | 2 Comments
The performance of the public healthcare services in Hong Kong has been far from ideal in recent years, with chains of blunders happening one after the other in public hospitals throughout the city. Some of the more recent incidents include newborn babies who were injected with outdated anti-tuberculosis vaccines, two babies were mixed up in the hospital postnatal ward – the mothers breast-fed each other’s baby for at least 36 hours – a doctor wrongly administered a chemotherapy drug to a leukemia patient, and a public hospital refused to send medics to help a patient dying on its doorstep. The persistent and continual failure of the public healthcare system in Hong Kong over the last several months is starting to raise some serious concerns.
The Hong Kong Government’s health care policy is that no one should be given inadequate medical treatment, regardless of their financial status/condition. The healthcare system in Hong Kong consists of both a public and a private sector. Public healthcare services are provided by the Department of Health and the Hospital Authority. The former supports primary care, including preventive and outpatient services, while the latter handles the public hospitals. About 70 percent of primary healthcare services in Hong Kong are provided by the private sector.
The breaking news of the week (23rd August 2009) in Hong Kong is that five newborn babies at Queen Elizabeth hospital were injected with an anti-tuberculosis vaccine which had already been diluted for 2 days, well past its expiry period. The vaccine comes in a powder form and is supposed to be diluted and used within 4 hours of the initial preparation. The consequence of using an expired TB vaccine usually include death. Two weeks prior to this incident, at the same hospital, two nurses and a health assistant working in the postnatal ward mixed up the ID bracelets of two new born infants. This, in turn, lead to the mothers breast feeding, and bonding with, the wrong children for a period of 36 hours before the mistake was spotted and rectified. One of the contributing factors which led to the occurrence of these incidents was the failure of staff in following the established verification procedures and guidelines. Human error has been attributed as the main factor for these incidents.
The Public healthcare sector is highly subsidised by the Government, which means that the costs associated with healthcare in the territory are relatively low for Hong Kong permanent residents. As such, there is always a long queue in the public hospitals, average waiting times can easily exceed one hour. The ratio of doctors to population in Hong Kong is about 1: 574, whereas ratio of nurses to population is 1:187. With these figures, it is very hard for medical staff to consistently take any personal interest in every patient. Public hospitals operate with maximum efficiency, so minimal personal service is expected. Low resources and lack of oversight from medical staff are major contributing factors leading to occurrence of medical blunders mentioned above.
Another example of a medical mishap took place in the Prince of Wales Hospital. A 21-year old female patient who had acute lymphoblastic leukemia, was given a dose of vincristine (an chemotherapy drug) via her spine instead of into the vein, as is the correct procedures with this type of medication. The doctor wrongly administered the medication, threatening the patient’s life. A shortage of doctors in the public sector also threatens the efficiency and quality of care given to the HK public. In past years, 10-15% of doctors in public hospitals would leave each year, either to go into retirement or to earn even higher salaries in the private sector. Due to the recent economic downturn, the Hospital Authority has imposed a 5.38% pay cut onto their staff, meaning that thousands of senior doctors and managers are at the edge of losing their job if they refuse to accept this proposal. The HK Government is also trying to ride out the financial crisis by reducing the health authority subsidy budget in a similar percentage. This however contradicts with the speech given by the Chief Executive Donald Tsang on 2009 budget, which stated that healthcare expenditure is to increase to 17 per cent of recurrent expenditure by 2012. Whatever the HK Government’s future plans may be, the hidden truth here is that in Hong Kong, the chance of getting better quality medical treatment is higher in private sector than in the public care.
It is very hard to find a perfect healthcare system in any country; unfortunately, medical mishaps are bound to happen. The key however, is to learn from these unfortunate incidents and work towards safer and better hospital environment for patients. Although public hospitals in general can provide affordable and quality care to the public, comparatively, private hospitals do provide a more flexible and readily accessible service. Private hospitals in Hong Kong are now operating in a similar manner to hotels. Going for treatment at private medical institution would be more akin to checking into a hotel for a short overseas trip rather than having an operation in a hospital. Staff in private hospitals are very customer oriented. In general, they speak very good English and will not have any communication problems with foreigners. There is a wide range of food selection on the hospital menu offered by the private hospitals. The benefit of using private medical facilities include shorter waiting times for out-patient services, easier booking options and more attentiveness from hospital staff compared to public hospital system. The major drawback to the public system is the extortionary expensive costs associated with treatment. In fact, the private healthcare system in Hong Kong is one of the most expensive ones in the world; 2nd most expensive after the USA and on a par with Israel.
However, costs probably won’t be the most important issue when you are in the position of this 56 year old man. He collapsed outside the doorstep of Caritas Medical Centre in Hong Kong (approximately 20m away). His son urgently sought help from the hospital. Upon requesting assistance at the hospital’s reception desk, the son was informed that there was nothing the hospital could do, and the receptionist told him to call emergency number 999 for an ambulance by himself. In fact, she did not even call the hospital accident and emergency unit for him. The old man was eventually admitted to the emergency unit after 26 minutes but died 17 minutes later, 43 minutes after collapsing with a heart attack outside the Caritas Medical Centre.
If this old man collapsed outside a private hospital, he would have been immediately taken into the emergency room, setting aside all the rigid rules and procedures of the bureaucracy set up in the public hospitals. From this incident, it is clear that the purpose of saving lives in the HK public has been set at a lower priority, with the red-tape procedures taking precedence. Jokingly though, if the old man is Jasmine Fiore and the receptionist is Ryan Jenkins, it is possible that he would leave Jasmine outside dying at the doorstep of the hospital, saving his plot to murder his ex-wife, stuffed her body inside a suitcase and placed in a garbage bin.
While the health care delivery system is different than in other parts of the world, patients can get very good medical care in Hong Kong. Other than the reasons stated above on the advantages of private hospitals, the other main advantage in seeking medical care from the private sector is more on a psychological front. The sense of security in knowing that you would be getting good quality medical treatment anytime you need is very important. Establishing a good relationship with a primary care doctor is essential, because the physician could act as the patient’s advocate to secure the best possible medical care and to provide continuity. Knowing your doctor before an emergency arises is always most desirable. Good medical treatment however comes in a cost, which is why a global health insurance policy would be handy when you travel or live abroad. While some people may disagree, with the health insurance policy in place at least you will know you will receive attentive medical treatment in a professional and efficient manner. Most important of all, you have no worries on the medical costs at the time of treatment.
The truth is that the HK Government is reducing the health budget, and overcrowded public hospitals will continue to be the trend. As an individuals, we have no control over Government policy, the only way to ensure that you receive the medical treatment you deserve is to give yourself an option to go to private hospitals. Given that all these incidents happened in the public hospitals in Hong Kong, it is only natural to think that private hospitals are much better than the public hospitals.
The healthcare system in Hong Kong consists of two main options, either public or private services. Public healthcare provides cheap but, often slow care while private sector provides flexible, attentive and readily accessible service. There are always pros and cons to each option, depends on your individual needs, the final decision is very much relying on your own discretion.
Apr
3
Tuberculosis: The Disease That Keeps On Giving
Filed Under China insurance, Health Insurance, Healthcare, International Healthcare, Medical Insurance | 2 Comments
World Tuberculosis Day was marked on March 24th with a forum in Rio de Janeiro this year and despite this disease having a history dating back to antiquity may be becoming more of a problem today than ever.
Tuberculosis is caused by the bacteria Mycobacterium tuberculosis and is the most deadly bacterial disease in the world. The World Health Organization alongside other partners is on a drive to bring mortality and prevalence rates of tuberculosis down to half the levels they were in 1990 by 2015.
The WHO currently estimates that one third of the world’s population is infected with the tuberculosis bacteria. Out of everyone infected with the Mycobacterium tuberculosis bacteria only 5-10% of those people will develop active tuberculosis of the lungs, which is the only way to become infectious and transmit the disease. While this may seem like a statistically low number, it is estimated that every second someone new is infected with tuberculosis bacteria.
In spite of the fact that tuberculosis is not only millennia old but also treatable, the goals that the World Health Organization set out to achieve are becoming increasingly hard to attain. While the agency has said that the percentage of the global population becoming ill with tuberculosis has continued the decline first noticed in 2004, they have also said that both Europe and Africa will not meet the intended reductions in either mortality or prevalence rates. So if the percentage of people suffering from tuberculosis is, as a percentage of the world’s population, going down, why is there increased concern over the issue?
There are two major reasons that are making tuberculosis an even larger health issue than it has ever been before. The first is that there is an incredible increase in the number of people with active tuberculosis that are also HIV positive, leading to increased complications in treatment and prevention. The second reason is that the disease has evolved into both multidrug-resistant tuberculosis (MRD-TB) and extensively drug-resistant tuberculosis (XDR-TB), which has made some standard treatments ineffective in combating the disease.
Because HIV attacks the body’s immune system, it is leading not only to increased rates of infection but also increased mortality rates in people infected with both HIV and tuberculosis. The co-infection of HIV/TB is a seriously threat as the diseases piggy back on each other, each speeding the progress of the other. The WHO’s 2009 global TB control report indicates that about one out of four TB deaths are HIV related, which is more than twice as many as was previously indicated. Regions with high levels of HIV infections like Africa are being hit the hardest, with some places like South Africa where numbers of tuberculosis infections almost tripled. In 2007 alone it is estimated that there were 1.37 million new cases of tuberculosis in people infected with HIV as well as 456,000 deaths.
There is, however, somewhat good news arising from the intense scrutiny of data over the years. Having realized the increased threat that HIV/TB co-infection poses, there has been a raised effort to test for HIV in people who are receiving treatment for TB. The WHO report shows that in Africa in 2004, only 4% of patients being treated for tuberculosis were tested for HIV. By 2007 the number of TB patients in the African region getting HIV tests has risen to 37%, with some individual countries testing as many as 75% of their TB patients for the immunodeficiency disease.
The other issue of drug-resistant tuberculosis is beginning to attract increased attention because of concerns about the possibility of a virtually untreatable tuberculosis epidemic. The driving force behind the rise in drug-resistant strains of tuberculosis is that in the places with the highest rates of TB infections, such as Africa, Eastern Europe and Asia often have poor healthcare systems.
One of the gravest problems is that the systems will lose track of tuberculosis patients who do not finish their course of treatment for TB, allowing the disease to morph into a drug-resistant form of the disease. Some places such as India or Russia have poor healthcare where there is either a shortage of doctors and appropriate medication, or little control over the sale and usage of TB drugs.
As health ministers from some of the most direly affected countries, along with the leader of the WHO and Bill Gates gathered in Beijing on April 1st to formulate plans to prevent the spread of drug-resistant tuberculosis, one story has illustrated the need for quality medical insurance networks. A migrant worker named Wang Chong was in the Beijing Chest Hospital for his tuberculosis treatment which has been continuing for over five months. But because he has no insurance of his own and no national healthcare safety net to support him, he must decide whether to continue the treatment which has already cost him more than $5000 dollars, no small amount of money for a migrant worker in China, or to stop treatment and risk his disease evolving into a drug-resistant variety which could kill him.
There are estimated to be more than half a million people in the world with drug-resistant tuberculosis across the globe, with more than a quarter of them in China. Some health advocacy groups say that less than five percent of the people carrying drug-resistant strains of the disease are being treated properly, meaning that they are often out and about spreading the increasingly resilient disease to others.
At the moment, treatment of regular tuberculosis requires taking four different antibiotics and lasts for up to six months. Treatment for extensively drug-resistant tuberculosis is toxic to the patient and may last up to two years, often leading to the confinement of the patient. There are ongoing efforts to find a two drug combination that will work in combating both regular tuberculosis and extensively drug-resistant tuberculosis, with one phase of clinical trials scheduled to be completed by the end of 2009 in South Korea. The recent forums and meetings of the worlds’ healthcare leaders in highlights the need for awareness on the topic and the need to make sure you are protected, so that you can be assured a full treatment without having to make the same decisions that Wang Chong is having to make this very moment.
Feb
20
AIDS in China: Highest Killing Infectious Disease in 2008
Filed Under China insurance, Healthcare | 1 Comment
The Chinese government recently released a report which gives a better idea of the growing severity of the AIDS problem in the country. The figures from the central government’s Ministry of Health show that HIV/AIDS was the leading cause of death by infectious disease last year, killing 6,897 people in the first nine months of 2008. While the numbers may be a little stunning and more than a little troubling, there is also a glimmer of hope to be seen from the news.
The virus killed more Chinese people last year than any other infectious disease, with tuberculosis, rabies, hepatitis and infant tetanus ranking as the second through fifth biggest killers respectively. According to the health ministry, in 2005, out of all the infectious diseases, AIDS was the third leading cause of death in the country. The number of reported deaths by AIDS is not the only number to have spiked, as the number of confirmed cases of HIV rose to 264,302 cases, nearly doubling from 135,630 in 2005.
With the newest data in, China now has recorded 34,864 deaths from AIDS since the first reported case back in 1985. According to joint UNAIDS and WHO figures, there was an estimated 700,000 people in China who were HIV positive by the end of 2007, including 85,000 AIDS patients. By their account, this means that 0.05% of China’s population has been infected by the virus.
Until recently, the problem has been that China has been less than diligent in acknowledging, tracking and dealing appropriately with the problem, making the data slightly unreliable, even now. After all, it was only in the first few years of the new millennium that the government started enacting laws to protect the rights of HIV/AIDS carriers and patients as well as proactive policies to start dealing with the issue after realizing that the central cause of HIV transmission in the country is now unsafe sex. For a long time, AIDS was seen simply as an issue concerning certain subcultures in society, namely homosexuals, drug addicts and prostitutes. Because of the fact that these groups are, at least, frowned upon in most societies, there was no education or outreach programs, needle exchanges or anything else.
The problem is that because most of these things are taboo in Chinese society, homosexuals, drug abusers, and prostitutes or the people who use their services are often times married and can communicate sexually transmitted diseases like HIV/AIDS to their spouses. Another problem that afflicted China, like it has many countries without the proper infrastructure, was its blood banks. China had, for a number of years, operated on a system of paying people for blood donations, but the problem was that it started to attract unscrupulous people who would donate their blood despite the fact they already knew they had tainted blood. The hospitals were also in part to blame, as they were less than diligent in testing the blood before giving it out to people via transfusions and thereby infecting them, which is what happened in one tragic case in Heilongjiang province. Thankfully, since that time the government has realized this problem and sought help to develop better practices, changing the system to accept only voluntary blood donations, and also start education programs to teach people of the dangers.
So where is the bright side which I mentioned at the beginning of the article? It seems that the Chinese government realizes that as China develops economically, so too does it change socially. Instead of playing down and dismissing the problem demographics and the general change in social attitudes towards sexual openness and premarital sex, they are beginning to kick off education programs about HIV/AIDS as well as other STDs and reproductive health in general. It is in part, due to social stigmas involved that only 7% of women and slightly over 8% of men in China seek immediate treatment for sexual related issues, while more than a third never seek help. It was in light of this that China kicked off the Sunshine Project to Care for Gender Health on Sunday, February 15th 2009, as the government seeks to open up the previously taboo subject of sex to conversation. And they should be applauded for being pragmatic enough to disregard long-held social beliefs in favor of better health for their citizens through information and education. As with most things in medicine, the availability of information and the need for openness is often the key to making life as healthy as possible for everyone involved.
Nov
13
Leaping Forward: The Healthy China 2020 Reforms
Filed Under China insurance, Expat Insurance, Healthcare | 7 Comments
Earlier this year, the government of the Peoples Republic of China announced their plan to reform their country’s health care system. The main focus of the ‘Healthy China 2020’ reforms is to set up a universal health service across the country, available to even the poverty stricken, rural segment of the population. The scale and layout of the project have spurred some commentators to liken it to the British National Health Service. Other than trying to broaden the coverage and increase the basic levels of care to people, some of the reforms’ goals are focused on promoting affordable healthcare, preventative medicine and increasing life expectancy, which is at 73 right now. Atypically, the Chinese government opened a comment section on the National Development and Reform Commission (NDRC) website for public opinions. Over 900 comments were left in two days, with many suggestions and personal analyses covering a broad range of topics; from the problems faced by migratory workers, to the lack of facilities for rural citizens. So as this country of increasing importance in the world looks to revamp its healthcare services, let’s look at some of the improvements that have worked so far and what problems they may face in the near future.
One of the first innovations that I want to look at is the advent of joint venture hospitals in the last few years. China officially allowed foreign companies to enter into hospital and clinic joint ventures in 2000, although only permitting 70% ownership of the company by foreigners. Since that time, there have been quite a few companies getting involved on the ground. Singapore-based Parkway Group Healthcare, Hong Kong-based Global HealthCare, U.S. based early entrant, Chindex, and even Taiwanese food company Want Want Group has joined in the fracas.
Chindex now runs the Beijing United Family Hospital and Clinics as a joint venture with the Chinese Academy of Medical Sciences, which operates two hospitals and five outpatient clinics and has plans to open two more outpatient centers this year and two more hospitals in Beijing and Guangzhou slated to open in 2010. United Family Hospitals and other joint ventures like Richland International Hospital in Kunming, Yunnan province, and Shanghai East International Medical Center are focused on getting more market share in quality private healthcare, which often times ends up geared towards foreigners whose insurance is often times paid by their company. However, with China’s increasing affluence and growing middle class combined with the country’s one child policy, there is an increasing willingness for Chinese people to pay for higher quality care, private maternity care in particular. While foreign passport holders make up a majority of the United Family Hospital in Beijing, up to 40% of the patients across United Family Hospital locations are now middle and upper class Chinese wealthy enough to pay for the services. Tommy Chu, the director of China Health Management Corp. the Las Vegas-based partner in Richland International Hospital, predicts that up to 60%-70% of Chinese hospitals may eventually be privatized, although how this jibes with the envisioned Health China 2020 reforms to provide universal medical service remains to be seen.
On the flip side, Want Want Hospital in Hunan province seems to be doing a remarkable job of providing quality healthcare that, while initially seeming more expensive due to higher costs and reduced subsidizing, has ended up being a cost saver for their patients. The hospital boasts a US $3 million electronic patient management system, which enables patients easy access to their health condition and bills in a user-friendly format. The hospital manages about 1,000 outpatients a day, after more than two years in operation, and the care at the hospital is usually superior and cheaper than going to a public hospital. This is mostly due to the fact that patients usually spend fewer days in hospital and require fewer expensive follow-up visits. Unfortunately, despite the headway that Want Want Hospital has made, it has certainly not been easy for them. The hospital had to register as a profitable medical institution in order to avoid strict local government controls, but this put them in the unenviable position of getting taxed more, paying higher utility fees, and the obligatory discrimination from the public sector. For instance, not only did Want Want Hospital have to pay taxes on subsidies it received to treat patients during the Sichuan earthquake, but it’s patients also receive less reimbursement credits despite being licensed under the local basic medical insurance system. In addition, when the hospital opened its doors, the reputable Xiangya Hospital School of Medicine, a local public hospital, initially decreed that should a doctor leave Xiangya for Want Want, any relatives they have working at Xiangya would have to quit their jobs as well. The executive president of Want Want Hospital himself laments the number of hoops the government sets up, and says that fair competition is the best way to push public hospitals to improve their service. So if, as Tommy Chu and the growing number of joint ventures think, that privatization will play a larger role in China’s new healthcare system, it may be in both the nation and the companies’ interest to make it less of a hassle and a burden to compete with entrenched, less efficient solutions. And even if the PRC moves away from privatization to focus more on government run and funded establishments, they may want to take some notes from the joint venture hospitals on how to administer their hospitals to emulate the ease of use for patients and the efficiency these hospitals seem to enjoy.
But to be sure, the international joint ventures are not the only ones in China’s healthcare market developing refreshing new systems for treatment. Indeed, the PRC needs to look no further than their capital for administrative inspiration. Peking University People’s Hospital has teamed up with two community health service centers to improve the referral system, allowing for better treatment allocation and shorter wait times at hospitals. Patients go into the community health centers and receive treatment, then, if further or more specialized treatment is required, the centers can go online and book the appropriate medical department at Peking University People’s Hospital allowing the patient to walk in the hospital and get treatment at the specified time without waiting in line. This new system of referrals was started this September, 2008, in the hopes that it can free up the larger hospital to focus on treating serious illnesses and conditions, while the community centers deal with the more mundane ailments, and alleviating administrative bother along the way.
To continue on with our next success story before we hit the problems section, we’ll take a look at the Wuhu Medical Institution Drug Administration Center. Earlier this year, the Wu Hu municipal government in Anhui province decided to separate the pharmacies from their eight public hospitals in order to cut out corruption. They started the drug administration center to take charge of all drug sales instead of leaving it as an internal department of the hospitals, so in theory, all money from drugs sales goes directly from drug salespeople to the government which sets the budgets and also feeds some of the revenue back to the hospitals as subsidies. This hopefully cuts out the incentive for hospitals to push expensive drugs on patients, in favor of cheap effective ones. The drug administration center is also divided up into three branches to avoid conflicts of interest; decision making, implementation and supervision. Although some opponents still argue the new system doesn’t make any significant changes to the inherent conflict of interest in the supply chain, from pharmaceutical manufacturers, to drug dealer, to doctors and pharmacies, before finally reaching patients.
In a different vein, we’re going to look at some of the problems China is facing as it moves forward with its healthcare reforms. Two of the bigger internal problems it faces now are the issues of health poverty and government stewardship of healthcare. According to figures from a recent study by an international group of researchers, 35% of urban households, and up to 43% of rural households in China either “have difficulty affording health care, go without, or are impoverished by the costs,” which in a country of 1.3 billion people, is an awful lot of people who either get financial ruination, or no healthcare. The availability and quality of healthcare depends not just on whether you live in a city of not, but also whether your province or county is a poor as you are. In other words (or figures) rural infant mortality rates stand at 64 out of 1,000 births not living past the age of 5, more than five times higher than city infant mortality rate of 10 out of every 1,000 births. On top of that, wealthier counties get 48 times more public spending than poor counties, and safe drinking water is available to 96% of the population dwelling in large cities, but only 30% of poorer citizens have access. Way to stick it to those lazy peasants, eh? If they can’t make money, they don’t deserve it spent on them I guess. The sheer size of the problem has more zeroes on its price tag than I can comfortably hold in my brain. The number and scope of infrastructure investments that need to be made in areas of the country that are not exactly accessible is immense. Roads will need to be built in the more remote countryside areas to let the workers bring materials to places where they will have to build the infrastructure to provide safe drinking water and support a community health center. And lets be honest, there’s a lot of remote countryside to cover in China.
And what’s worse than being a peasant? Apparently being a girl. Due at least in part to the culture’s extreme preference for male children, sex-specific abortions, although now illegal, still happen and have severely impacted the male to female ratio in the country. Some figures say that the current population of men is 20% larger than the female population, and it’s possible that up to 10% of Chinese men may not find wives. This culturally ingrained preference for boys, or discrimination towards girls in other words, is reflected in the country’s higher death rates for girls; 33.7 out of 1,000 live births, versus 23.9 for every 1,000 live male births. This is an issue that has been referred to as the problem of China’s ‘missing women’.
The problem of corruption in the medical institutions, or ‘government stewardship’, was also highlighted as a major problem in the country. Almost all of government funding goes directly to municipal hospitals in cities, leaving only 10% of the budget to support rural and urban health centers. Due to this, health providers are forced to cover their costs by passing the bill onto the patient. This system of business is what has been blamed for at least part of the rampant corruption in China’s medical system. Because the doctors get their money from the patients and often have little oversight, it benefits the doctors to sell the most expensive treatment, not necessarily the most efficient. This leads to the people who really can’t afford it, being prescribed very expensive drugs they already can’t afford and then having to repeatedly make pricey visits to the doctor because the treatment was not effective. This has helped to bankrupt millions of families across China as they sell all their belongings to pay for the treatments. One paper by the researchers said that healthcare was taking up 50% of household income in 2006, compared with 45% in South Korea, 16% in Sweden, 15% in Japan and 11% in France. The researchers say this is because of inadequate health insurance in the country. Despite the speedy growth of foreign and domestic private insurers in China, the overall coverage in the population stays at just 6% of urban Chinese and 8% of rural citizens. After being asked recently whether their Chinese health insurance operations are profitable, AIG, which has the largest market share out of foreign companies at 3%, refused to comment, only saying their priorities were life insurance and retirement products, while a Swiss Re consultant said that health insurance is generally not a profitable business. Oddly enough the same things that are forcing people into the “medical poverty trap” are also what is hindering private health insurance in the country; affordability and over prescription. So if China is serious about reforms, one of the first things that needs to be tackled would be this complete lack of responsibility by doctors and the medical supply chain for the consistent prescribing of incorrect, expensive medication for money, as it not only brings destitution to the patients it comes in contact with, but has far flung consequences hindering the spread of health insurance coverage to those who need it most.
One other looming issue that some people are pointing to is the fact that China’s entire economy is about to suffer large problems. While many still hold rosy outlooks for China and see it becoming a bigger economic player in the world, others are beginning to point out that the Chinese economy is a bubble getting ready to burst. From the real estate and financial markets to the export centered industries, some commentators are saying that it’s on shaky ground as is and that people should not count on China to becoming the world’s new economic center. In regards to the health of the real estate market, Chinese economist He Qinglian, who now lives in the United States, has said the signs of its impending crash were apparent in late 2005. She says that the entire market was fundamentally unsound because, as was especially evident in Shanghai, real estate agents controlled the vast proportion of business and fuelled the industry through speculation, not actual demand. The end result of this was that property prices in large cities like Beijing, Guangzhou, Shenzhen and Shanghai dipped nearly 20%, which caused their satellite cities to fall an average of 15%. While some have been hoping that China will step up to fill the void left by US consumer dollars, many are beginning to think this is, at best, wishful thinking. Some are saying this is mainly due to China’s manufacturing centered economy. One analogy that has been drawn is between China now, and England at the beginning of the industrial revolution, seeing as they’re both the manufacturing centers of the world. The difference? England was a technological leader of it’s time, China is not. While England engineered new technology, China’s manufacturing hubs remains low-tech, labor intensive and low value-added assembly lines, where all technologically advanced parts are shipped in and put together before being shipped out to consumers. To put it bluntly, as Will Hutton of the UK’s Observer does, “Asia, except Japan, remains in essence a subcontractor to the West. Two-thirds of China’s exports…are made by foreign companies [that] essentially reprocess imports of semi-manufactured goods that are then shipped to Europe and the U.S.” So, considering the size of the industrial manufacturing industry in China and the amount of people it employs, the decreasing demand from foreigners puts large sections of the Chinese work force in serious danger of losing their jobs. Not exactly firm ground from which to revolutionize your country’s healthcare system.
Whether or not the Chinese economy is better or worse than we think, I will find it genuinely interesting to watch the development of the Health China 2020 reforms. Seeing as they have done something unusual in asking Chinese citizens for their opinions and suggestions, it may lay precedent for further freedoms in the country such as land rights, which is actually being considered at the moment, which could fundamentally alter the country’s culture. Maybe it’s true, as Mr. Hutton says, that “China is beginning the perilous path to becoming freer because the economy demands it.” Either way, they have some solid examples to work from, some incredibly intelligent people to try and sort out a solution and the dedication to make drastic changes to their system.
Sep
24
AIG – What is happening, and how it affects you.
Filed Under China insurance, Expat Insurance, Health Insurance, Healthcare, International Healthcare, Life Insurance, Medical Insurance, USA Health Insurance | 2 Comments
AIG: The letters on Manchester United’s football shirts, on buildings dominating skylines in major cities worldwide, and in the past week, on the front covers of the business pages, if not the entire paper.
A company with a long and storied history, AIG had posted total losses of $18.5 billion over the last three quarters, before being bailed out last Tuesday (Sep. 17th) with a loan of up to $85 billion dollars from the Federal Reserve. This was designed to effectively secure the company’s important economic position worldwide, and in exchange the Fed would get around an 80% stake in the company as a kind of security, and 12% interest on the loan.
What happened? Why did AIG suddenly need so much cash to avoid going under? Should they have been lent it?
This was not the start of the story, and it is far from being the end of it. It began, like so many of today’s economic worries, with the sub-prime mortgage crisis. To enable them to continue making yet more bad loans, banks in the US and Europe insured some of the loans with insurers such as AIG. As the largest insurance company in the US, AIG also insured many other deals made by banks or large companies, so as the economy went into recession, it lost a great deal of money, resulting in a situation where the company was very illiquid and could therefore fail. This would have had a huge knock-on effect on banks and companies not just in the US but worldwide, meaning that the Fed felt justified in bailing out AIG (whereas it left Lehman Brothers Holdings Inc., who announced last week that they would file for chapter 11 bankruptcy protection, to their own devices).
The government was fresh from shoring up Freddie Mac and Fannie Mae, (the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association) with guarantees and the prospect of a ‘conservatorship’, and back in March, the Fed backed the purchase of the stricken Bear Stearns by JP Morgan. The Federal Reserve has as a result been rather seriously depleted.
The US is not the only country that is having to take action of this kind. The UK government ‘nationalized’ the Northern Rock bank, another victim of the sub-prime crisis in the US, back in February. Some slack is taken up by companies taking over other companies, e.g. Bank of America buying Merrill Lynch, Lloyds TSB merging with HBOS, or Barclays buying up some of Lehman Brothers’ core assets- which many would argue is how the market should work. At present, however, the US looks likely to spend yet more money to try and solve a problem that, although originating in the country, affects the world’s economy as a whole. It is unlikely that other countries will be able to continue to sit back and watch the US deal with the problem alone for very long.
The AIG bail-out looks to be only the start of an almost unprecedented level of government spending to assist private business. Lawmakers are still hashing out the details of a plan to use taxpayers’ money to buy the bad debts of financial institutions with significant operations in the US. The plan would put about $700 billion dollars spending money into the hands of Treasury Secretary Henry M. Paulson Jr. who would theoretically decide how to spend it in a way that balances the interests of the taxpayer – minimizing immediate costs but ensuring liquidity in the financial markets in the long term. This is a very controversial plan, and has even been called a kind of undemocratic socialism. Paulson in fact used to be head of Goldman Sachs, which along with Morgan Stanley just announced a change of legal status to enable it to take advantage of the proposal. Many politicians, including McCain and Obama, have expressed concern and are demanding greater oversight, but as it is hard even for financial experts to put a value on bad loans of the type that caused the crisis, it is unclear how this would work.
How does this affect my insurance?
Essentially, it shouldn’t. AIG has been more or less guaranteed by the US government. In any case, most private policies are with subsidiaries of AIG that are separately regulated and financially sound. Also, in the US, policies are usually guaranteed to some extent by state run associations should an insurer fail.
However, as anyone who has seen Mary Poppins should know, customers are not necessarily rational beings, as has been demonstrated in the past week, particularly in Asia. The offices of AIG subsidiaries in Singapore, Taiwan and Hong Kong have been mobbed by people wanting to either enquire about the safety of their policies or cancel them altogether. In Hong Kong some 1,700 people surrendered their policies with AIA on Tuesday. This was despite assurances, including from the monetary authority of Singapore, that the subsidiaries of AIG are still sound. AIA in Singapore has announced a policy conservation program to enable those who surrendered their policies in panic last week to reinstate them. While some unscrupous agents might be tempted to advise people to switch insurers to get a new commission, the best course of action is probably to wait and see.
Effects on the presidential election race, and the candidates’ healthcare proposals:
Both candidates are going to have to make significant changes to their policy proposals in the face of the economic realities which will likely face the next administration. They also both have to come up with a stance on this new proposal. So far their responses have been fairly similar, with both calling for more oversight. Both McCain and Joe Biden were supporters of the deregulation in the late 90s that arguably made the sub-prime crisis possible, which may mean Obama has the edge in not having to backtrack too much. What is certain is that there is going to be a lot less money available for expensive programs such as Medicare or Medicaid, and any candidate promising tax-cuts will have serious credibility issues. The future of health insurance and healthcare financing in America is now very unclear.