Digital Health Whitepaper
Integrating digital healthcare solutions to better serve and protect consumers
Driven by these national policies, the healthcare industry is undergoing accelerated innovation and is evolving to meet the growing and diverse healthcare needs of the Chinese people.
After more than two decades of medical insurance reform, China's social medical insurance coverage rate now exceeds 95 percent, achieving a high level of basic medical insurance coverage for the entire population.
As GDP and disposable income of the average Chinese family continues to grow, consumers have shown higher demand for medical services and protection. This is especially the case for high-net-worth individuals and the emerging upper middle class.
However, compared to the high-net-worth individuals, the market has only just begun to pay attention to the upper middle class, and the current level of healthcare services and protection targeted at the upper middle class is still relatively low.
Given the priority to develop people's health guided by the "Healthy China 2030" strategy, the government has promulgated the "China Health Act (2019-2030)", "Opinions on Deepening the Reform of the Medical Security System" and other guiding programs to accelerate the establishment of a multi-dimensional medical security system and an integrated healthcare service system. By integrating different ecosystem players from the medical, pharmaceutical and health insurance fields, the government aims to resolve the mismatch between medical and health demand and supply, and to provide cost-effective medical and health services to the people.
Combining Deloitte's industry knowledge and our understanding of the characteristics of China's healthcare industry, Deloitte has identified five trends that will have a significant impact on the future of China's healthcare industry: a comprehensive healthcare system, empowered consumers, the rise of an alternative funding model, smart healthcare and innovative product mix.
A Comprehensive Healthcare System. With the aging population, evolving living habits and environment, a social disease map can be developed. With chronic diseases in China increasing year on year, the question on how to better utilize and allocate medical resources to serve and manage consumers' healthcare needs became one of the most important issues. Thus, improving the hierarchical medical system, strengthening "disease prevention and control", accelerating decentralization and speeding up the development of medical services to cover the patient's entire life cycle are necessary in promoting a comprehensive healthcare management system.
Empowered consumers. With the improved living standards and education, consumers are paying more and more attention to their own health, and the influence of living habits on health is becoming highly recognized. At the same time, there is an increasing demand for risk assessment and early intervention for infectious diseases, genetic diseases, cancer and other diseases. Mental health issues have also increasingly become a social issue that cannot be ignored.
Rise of Alternative Funding Model. Driven by a growth in patient population and medical inflation, medical and health expenditures have become a burden that cannot be ignored. In this regard, the government needs to take the lead, through exploration of policies ranging from "Elimination of price difference in drugs" and "Quantity-based procurement" to "Diagnosis-related group (DRG) payment" and "Outcome-based payment" and also leverage medical insurance to achieve the cost controls. At the same time, it is also necessary to promote accelerated development of commercial health insurance to meet the diverse health protection needs of consumers.
Smart Healthcare. With the rapid development of technology, technologies such as wearable devices, artificial intelligence, robotics, 5G and blockchain are widely used, which has not only brought about emerging treatment models, but also accelerated the collection and integration of health data – including genetic, diagnostic, behavioural, and health service consumption data.
Innovative Product Mix. In terms of innovative product mix, insurance companies, pharmaceutical companies, physician groups, and technology companies are all actively exploring. The breakthrough and collective innovation of medical and health care is very important to the development of the country's healthcare industry.
Promoting digital product and service innovation to continuously improve the service experience along the consumer's healthcare journey
Deloitte conducted a survey on Chinese consumers' healthcare preferences, covering Chinese consumers aged 20-50 living in Tier 1, New Tier 1 and Tier 2 cities, with the key findings summarized below
The public general hospitals are still the first choice for offline treatment, while Chinese consumers are gradually accepting online self-check solutions and family doctors
The survey found that Chinese consumer, especially the upper middle class, have a strong need for self-checks when experiencing minor ailments (e.g. mild abdominal pain, migraines). Respondents expressed their hopes for a credible and reliable online channel for self-checks and self-medication which reduces the need to travel to the doctor in person. When it comes to offline medical treatment, customers still tend to choose public general hospitals for medical treatment due to their credibility. However, with the continued growth in popularity of online specialist consultation, many consumers have noted that they have experienced such services and have obtained disease diagnoses and medication advice from experts in top-tier hospitals.
Digital medical services such as online consultation are aimed at fulfilling the needs of consumers seeking convenient medical treatment. However, due to a lack of knowledge about the patient's health conditions, past medical historical records, drug allergies, etc., these single-point digital medical services cannot provide consumers with an adequate online service experience.
The online family doctor, a one-on-one general practitioner contracted by the consumer, has a comprehensive understanding of the consumer's health status and provides efficient online consultation, diagnosis, and medication services. The dedicated, consistent nature of the family doctor helps to fill the gap in trust sometimes lacking from the online consultation experience, making it a good choice for consumers, especially the upper middle class—consumers who seek efficiency but unwilling to sacrifice on quality.
The upper middle class has a relatively high acceptance ratio for digital healthcare services compared with other groups
It is worth mentioning that the upper middle class is more receptive to digital healthcare services compared to both the high-end and mass market consumers. In addition to digital healthcare services such as online consultation, mass market consumers noted that they are willing to experiment digital testing solutions such as home medical testing devices (e.g., glucose meters, home electrocardiography (ECG) machines, etc.) when the technology is mature.
Upper middle class consumers noted that they are willing to use both home-based testing and third party testing services in the future (thyroid, metabolic, etc.). Meanwhile, the chronic illness consumer group expressed higher demand for testing expertise and prefers to receive testing at nearby medical testing stations or mobile detection vans.
Online medicine purchase, insurance direct billing and online prescription medicine consultation are the main needs of consumers in digital medication services
In recent years, there has been a certain degree of development of digital medication services, the usage of which is relatively high according to research data. Most consumers have used online channels to conveniently purchase over-the-counter (OTC) medicines, as well as e-prescriptions for common medication. Some consumers have even searched for and purchased special and rare medicines online based on their specific needs.
Having developed a habit of purchasing prescription online, more than half of all the surveyed consumers indicated that they wish to make direct payment leveraging their health insurance or commercial insurance plan as well. Therefore, digital medication solutions that integrate coverage for prescriptions purchased online will be more favored by consumers in the future.
In addition to purchasing medication, consumers surveyed have shown willingness to use online medication counseling services to monitor and obtain guidance on dosage to ensure that the right type and amount of medication is administered.
As technology matures, smart medication management services based on "e-prescribing" will be able to provide consumers with more convenient and secure services. The outbreak of the Covid-19 epidemic has further deepened consumers' acceptance of online medication consultation and online medication purchase services, and such medical consumption habits will continue in the post-epidemic era.
Health guidance and data tracking services are the most commonly used services under digital health management
Addressing the pain points that consumers encounter when seeking medical treatment is only eliminating symptoms of the problem. In order to address the root cause, there is a need to invest in good health management and disease prevention which target to make people healthier.
In recent years, the concept of healthy living has been widely gaining acceptance in China, especially among the middle and high-end groups. Strengthening self-discipline and regulating eating habits and regular exercise have become a trend.
In order to better overcome their inertia and promote the formation of habits, consumers are eager to seek guidance and utilize tracking services. As such, acceptance of digital products and solutions has grown higher proportionally in this area. Among the digital solutions for health management, fitness and exercise coaching products and services are the most widely used, with more than 60% of respondents reporting that they have used such solutions. This is partly due to the promotion of national fitness concepts, such as the "City Marathon", and partly due to the increase in the number of companies offering online sports products that aim to enhance customer stickiness.
Secondly, adoption rate for health data tracking product (steps, weight, etc.), among consumers are also relatively high. This rate is even higher among middle- and high-end consumers compared to mass market consumers.
This is partly due to higher spending levels in these groups and partly because the middle- and high-end population are more concerned about health.
Similarly, the usage of diet management digital products is not high among mass market consumers. This is due to the fact that the customer experience of diet management related digital products are inferior to aforementioned categories. However, consumers with chronic diseases shown significantly more interests in diet management digital products.
Lastly, the adoption rate of customized health management solutions launched by enterprises (mainly family doctors and online consultation services) is low among consumers. Insurers' early attempts in this area are mainly focused on high-net-worth consumers, and there is still room for development among the upper middle class consumers.
The major demands related to digital family doctor services include health consultation, common disease diagnosis and physical examination report interpretation, etc.
With the support of a variety of health management and disease prevention and control services, most Chinese consumers have taken on the role of frontline medical triaging, seeking solutions on their own. Meanwhile in other countries, this role is usually played by family doctors, who are licensed general practitioners. In recent years, family doctors (available to people through “community clinics”) have also been developing in China, taking on the role of guardians of family health and providing medical care in the community.
At the same time, some enterprises have also launched online family doctor services, aiming to provide better value-added services to their customers. Reviewing services offered by existing family doctor, the services that are typically used by consumers are health and disease consultation, common disease diagnosis and prescription, and physical examination report interpretation and health advice. Consumers expect family doctors to provide a broader range of services in addition to disease diagnosis and treatment, covering health management, disease prevention and service in the rehabilitation stages, such as the creation and management of health records, customization of health plans, emergency response guidance management, and regular follow-up visits for rehabilitation or chronic diseases. This demand is more evident among the upper middle class and high-net-worth individuals compared to the mass market consumers. This shows that consumers are looking for family doctor services as an integrated family health service that covers the entire end-to-end healthcare journey.
At present, some insurance companies have launched family doctor as a core part of their healthcare service platforms. Firstly, insurers not only can help customers pay for medical expenses, but also can provide customers with a series of disease management services to improve customer experience and control the payout.
Secondly, insurers can provide customers with health management, disease prevention and intervention services through the family doctor service before they suffer from diseases — thereby helping customers live healthier lives and reduce illnesses while simultaneously helping to control claims cost. In line with the shift from payer to partner, AXA recently launched the "Emma by AXA" platform (安盛健康在线) in China, providing its insurance customers with range of health services, including unlimited access to video consultation with a dedicated family doctor.
Mental health has recently garnered wider recognition in society, however self-regulation and talking to family and friends are still the major approaches for addressing emotional health challenges
In order to achieve the goal of "Healthy China 2030", mental health and physical health are viewed as equally important. In the past, people's understanding of mental health was biased or even prejudiced, and they chose to ignore mental health problems. This negligence has resulted in many mental illnesses not being diagnosed and treated, leading to number of tragic cases. This year, the importance of mental health to one's overall health is being increasingly recognized. Services such as stress relief counselling and psychological counselling are gradually being accepted by consumers. The use of such professional counselling services is relatively higher among middle and high-end consumers. The role of psychological intervention in the treatment of diseases has also been recognized by consumers. Although the survey shows that most consumers still continues to rely on self-regulation, or family and friends, 20% of the respondents have reported usage of professional psychological counselling services.
On the whole, it seems that various digital solutions have emerged in the market to meet the various demands and pain points of consumers in their healthcare journey and help them enhance their healthcare experience. However, product and service quality still needs to be tested by the market and consumers over time. To realize product and service innovation through digitalization, “customer-first” is vital in the endeavor to better serve customers.