Key Talent Challenges to China’s Healthcare Transformation

April 23, 2013 | Forbes

By Yen Pin NG
China’s healthcare market has been growing at an astonishing rate and projected to continue growing in strength through to 2020 and beyond. The growth is catalyzed by a social demand and priority through the 2009 health-care reform plan as well as a national & economic priority evidenced by the 12th 5-year plan. From a market perspective, all relevant sectors in healthcare (hospitals, pharmaceuticals, medical devices, and bioscience) are set for a period of strong growth due to the following key patient trends:
a. An ever increasing number of chronic disease patients due to increased lifespan and increasing urbanization (reaching 60% by 2030) will drive demand for chronic care services, with cardiovascular, chronic respiratory, cancer and diabetes as main chronic diseases in China.

b. Increasing domestic & international business travels as well as patient flow problems at the country’s top Class 3 hospitals will require provision of care in a broader setting across the country. This will spur creation of new private hospitals/medical centers as well as “upgrades” to Class 2 hospitals in the form of increasing service standards/hospital facilities with key capabilities such as standardized clinical pathways (“临床路径) & a “2 way referral” (双向转诊) system in major economically active cities to handle demands for this highly mobile workforce.

c. Increasing income & fuller, expanded coverage of social insurance. Social insurance is now covering more than 95% of the population and the healthcare reform plan is making sure that close to USD 400B worth of incentives will go into subsidizing increasing healthcare costs. In addition, self-pay/co-pay options are increasing with a choice of private/company insurers to select from. This will eventually allow the increased market acceptance of costlier drugs/medical equipment/procedures that might not be on the National Reimbursements List.

d. Increasing privatization of Healthcare. The Ministry of Health has publicly stated it wants to see inpatient and outpatient visits at private, for-profit hospitals increase nationwide from 8 percent in 2012 to 20 percent by 2015. It has also progressively relaxed investment policies to encourage multinationals to team up with local companies, such as allowing private operators to take over a public hospital asset, turn it around and operate the hospital at international standards.

e. Increasing expectations of healthcare due to better education & globalization. Patient expectations on healthcare has been rapidly increasing, due to exposure to better healthcare as well as increased consumerism and purchasing ability. As China’s economy grows and urbanization of the country increases, demand for better, patient centric health will spur the demand for higher quality healthcare services such as elderly care, high-end OBGYN, allied health and wellness services.
Given the above considerations, there are tremendous opportunities in the marketplace for a myriad of skilled workforces in the healthcare continuum at all levels due to both planned growth in number and type of service providers, as well as easier access to a wider range of drugs and medical devices through the increased privatization of hospitals and the increase in ability to pay for quality healthcare. From a growth perspective, all sectors are positive and will be looking for skilled workforce in the following areas:

a. Hospitals – As more hospitals get built due to demand for more beds and existing hospitals increase their capacity to deal with more patients, there will be demands for all levels of clinicians (doctors and nurses) as well as hospital administrators. In addition, as more hospitals embrace technology to improve their efficiency and patient safety metrics, we see a demand for healthcare informatics professionals as well, especially staff who can effectively use a HIS/EMR system to improve hospital efficiencies such as bed-turn-around time.

b. Ancillary Services – We see an increased demand for Laboratory and Radiology Services to support detailed, evidence based diagnostic process based on empirical evidence. As technology continues to advance and new and better equipment continues to be prolific, there is a demand for skilled technicians, pathologists & radiologists.

c. Specialty/Wellness/Therapy Clinics – As demand for better, patient centric care increases, together with the rise of the middle class in the country, wellness/therapy/specialty clinics, such as specialized chiropractic clinics/high end pediatric clinics will become more commonplace in the country as they fill the gaps from an end-to-end journey to recovery and/or access to a treatment method not available in a hospital system. There is a demand here for clinicians/nurses/technicians that are specialized in a particular care area.

d. Pharmaceuticals – The pharmaceutical industry is arguably the most developed industry in the health and bioscience space for China. There were already investments by early movers like AstraZeneca 10 years ago but other large pharmaceutical companies have been significantly expanding their operations into the country. We continue to see demand for sales, compliance directors as well as commercial directors in this space.

e. Medical Devices - The medical devices market is not far behind the pharmaceuticals market, with quite a few international companies setting up R&D centers and/or manufacturing facilities in China. We see a demand for medical devices companies to grow their sales force as new products get developed. In addition, roles in the R&D and manufacturing facilities will continue to grow.

From a senior management perspective, there are good opportunities for most areas in healthcare, in particular:
a. Business Strategists & Deal Makers – Talents who understand the economics/deal mechanics of the healthcare business, such as revenue and cost levers, deal experience in mergers/acquisitions or setting up of Joint Ventures, how to value business assets/deals, as well as how to define Go-To-Market strategies.

b. Business Operators – Proven leaders at the CEO/COO/CFO with a track record of operating/turning around a healthcare business, especially hospitals and medical device businesses.

c. Clinician Management – Senior clinicians who are recognized in their field will be in demand to take up senior management positions, Chief Medical Officers, Chief Medical Informatics Officer, Chief Nursing, Chief Pharmacist, Clinical Quality Directors, etc.

International leaders are also closely monitoring the Chinese market and agree that China and Asia Pacific in general, is primed for growth in the Healthcare industry and require talents in multiple areas of the industry.
“Asia is faced with a growing aging population that government and healthcare providers actively attempting to expand their healthcare IT professional workforce to develop national programs and capabilities to improve the fundamental issues of cost, quality and accessibility to care. Accordingly to HIMSS annual survey, a lack of qualified IT workers is the most significant challenge for many CIOs. The results of the survey indicate that more than 20 percent of CIOs polled revealed a lack of skilled healthcare IT workers was the biggest worry, displacing financial restrictions for the first time in 10 years.” – Mr Steven Yeo, Vice President & Executive Director – HIMSS Asia Pacific

“We see increasing demand for international level, JCI certified, private hospitals across Asian and Middle Eastern regions. These hospitals have to be not only patient centered but also as efficient as possible in order to be competitive in the market driven by mid to upper income level patients. Therefore our clients, healthcare organizations, are asking us to bring not only the design know-how but also management, operational know-how of American Healthcare in which patient satisfaction is the main priority.” – Mr Kevin Kim, Principal – Gresham, Smith & Partners
A key challenge in the healthcare transformation in China continues to be the country’s ability to align the interests of many different stakeholders as well as teething integration problems inherent in the push towards privatization. However, there is a real demand for more and better healthcare across the entire continuum and the industry will require the talents and skilled workforces to realize the demand, both foreign and domestic.