Health outcomes can transform economy

Efficient ways to deliver quality care will spur innovation in China, says

China has prioritized increasing access to healthcare in recent years and, on the back of strong economic growth, achieved outstanding results. A doubling in healthcare expenditure has seen substantial improvements in infrastructure, near universal insurance coverage and significant support for innovation.

All this has had tangible results: Average life expectancy in China increased to 74 years in 2013, while infant and maternal mortality rates dropped sharply. These outcomes have improved the quality of life for people in China and made an important contribution to its development.

As in other parts of the world, however, China faces powerful challenges. The population is aging fast. People over the age of 60 are expected to account for 24 percent of the population by 2030, versus 15 percent now.

Changes in life expectancy and improved lifestyles mean the pattern of disease will change, too: Chronic illnesses such as cancer, diabetes and heart disease are becoming more common.

These factors are expected to further increase demand for healthcare. By 2020, spending on healthcare in China is forecast to reach 8 trillion yuan ($1.29 trillion at current exchange rates), more than 7 percent of GDP, up from 3.2 trillion yuan, or 5.8 percent, in 2013.

One approach to address these challenges could be to focus more clearly on delivering better outcomes for patients. Such an approach would support innovation by promoting the development of new, more effective treatments and more efficient ways to deliver quality care.

China is uniquely positioned to lead the emerging trend toward an outcomes-based approach. China's healthcare system is still at a relatively early stage of development and reforms that are in progress have laid a solid foundation to build on.

By employing an innovative approach and harnessing new technology, China may be able to avoid some of the drawbacks and inefficiencies of established healthcare systems in places such as Europe and North America.

Improved results for patients can stem from several sources. One is through the introduction of new medicines and devices that significantly improve patient health compared with currently available treatments.

Access to state-of-the-art pharmaceuticals has been a major contributor to rising longevity in recent decades. Making the latest drugs available to patients who can most benefit may also help achieve efficiencies in healthcare spending.

For example, an experimental new heart medicine under development at Novartis AG has been shown in clinical trials to lower the risk of death from cardiovascular causes by 20 percent while also reducing costly hospitalizations due to heart failure by 21 percent.

More broadly, a sharper focus on health outcomes could support the government's overall economic reform agenda, creating the environment for a high-value sector of the economy to flourish and underpinning the long-term development in China of innovative healthcare product producers and service providers.

Outcomes-focused health systems foster innovation by stimulating demand for products and services that drive improved quality and cost-effectiveness of care.

Another way to improve results for patients is to adopt new healthcare payment mechanisms to reward better outcomes. Until now, cost-containment measures in China have mainly focused on ways to cap spending for individual aspects of healthcare, such as limiting the use of drugs or the length of hospital stays. China could benefit from adopting innovative new payment scheme that take a more holistic approach and consider the benefits for patients, as well as long-term costs of care.

In addition, new treatment guidelines for coordinating care can help ensure that the needs of specific groups of patients can be more closely met. The government has already made significant progress in defining clinical pathways for more than 20 diseases and carefully tracking patients' status against predefined care guidelines.

Patient information systems that provide wider access to medical records and clinical results can help healthcare practitioners identify patients with similar needs and plan more effective treatments. Such systems foster collaboration among all of the professionals whose actions can influence health outcomes.

The author is chief executive officer of Novartis AG. The views do not necessarily reflect those of China Daily.

Editor's note:

The annual sessions of the National People's Congress and the National Committee of the Chinese People's Political Consultative Conference ended with a call for widespread adoptation of the "new normal" economy, across all sectors, including those closely related to activities involving international companies operating in China.

The nation's GDP growth target for 2015 has been lowered to 7 percent in accordance with this "new normal" pace of expansion, which officials said will be achieved using a mix of policies including risk reduction and economic rebalancing.

China Daily asked a cross-section of senior executives from a variety of multinational companies with operations in China to offer their thoughts on the "new normal" economy and the plans for structural reform. China's economic growth rate would be adjusted to 7 percent. we asked how their company should adjust the development strategy in China.

In the context of deepening reform in various sectors and internationalization, we expect to see new opportunities for us to support State-owned enterprises and private-sector companies in their transformation and innovation journey.

SAP's global expertise across 26 industries and our versatile product portfolio makes us well-positioned to help Chinese companies expand overseas.

Greater China is a strategic region for SAP globally and is one of the top five markets for the company. China is SAP's second home and we will continue to foster innovation with our customers and be complementary to China's IT market.

The slowdown of China's economic growth rate is in conformity with the nation's economic development and is actually a pragmatic development. We believe this new adjustment will help to drive China to healthy, sustainable, long-term and stable development.

As a specialty chemicals company, Clariant puts more focus on capturing new and high-value growth opportunities specific to meet China's new megatrends, rather than only concerning the GDP growth rate. We have a strategy to become a true "China Insider", which means that we continuously listen to our customers and deeply understand our market.

We seek to discover current and future unmet needs, and then develop solutions accordingly, especially in supporting China's transformation to a more sustainable economic model.

For AkzoNobel, China has always been an important strategic market in our global strategy and contribute to realize our global visions. 7 percent GDP growth is still one of the fastest growth rates among the global economies. China's mega trends are huge opportunities for AkzoNobel and we are committed to using our expertise and innovation to help China achieve success in its evolving urbanization process, while growing our businesses sustainably and responsibly.

We are committed to continuing our investment momentum in China and providing sustainable and competitive coatings and chemical solutions to all four end-user segments - buildings and infrastructure, transportation, consumer goods and industry.

We remain optimistic about the Chinese market and its growth will remain strong as long as it continues to open up and internationalize. While the central government highlighted overall downward pressure on the economy, it correctly identifies openness and a shift to consumption as key drivers of China's sustained growth and modernization. MasterCard can play a fundamental role in that shift toward consumption and prosperity by supporting businesses and consumers to complete the transactions that make them both better off.

Though the Chinese government set the GDP growth goal to about 7 percent for 2015, that will still be a good achievement for the world's second-largest economy. GDP growth is only one of the key economic indicators, and we believe China is heading in the right direction by balancing the quality of growth better. The Chinese government now is encouraging market-driven growth with a strong focus on innovation and sustainability, which will lead to much more "green GDP" growth, so the quality of growth is much more important than the percentage of growth.

China's more environmentally friendly growth model is encouraging for us. As a leading global agriculture company, Syngenta has a responsibility to support governments all over the world to address the challenge of achieving food security and achieving this in a sustainable way. Our Good Growth Plan, for example, aims at increasing average productivity of the world's major crops by 20 percent without using more inputs and rescuing millions of hectares of farmland.

The close alignment between our strategy and the direction of China's agriculture modernization will result in positive outcomes for Syngenta.

The current strategy still emphasizes on modernization, efficiency and innovation. This means that technology and systems will continue to be in demand. Hence there will not be any significant reduction in the IT services opportunities for companies like Infosys. However, it is equally important that we invest in innovation and in bringing new solutions to China.