Ping An Insurance (Group), China’s largest insurer by market value, said on Tuesday that it will spend 20 billion yuan to 30 billion yuan (US$4.4 billion) on developing health care related technology over the next five years to fill the missing links in the country’s “underresourced” health system.
By helping China’s public health and social insurance systems improve efficiency and lower costs, the Shenzhen-based company will also be able to better grow its health insurance and online health care businesses, co-chief executive Jessica Tan Sin-yin said.
“For us, to deliver good health care services to our consumers, it is not enough to just provide insurance, or a simple online diagnostic service,” she said during the company’s first health care-themed investor day event. “We need to work hand in hand with the offline network, because this is where the bulk of the health care services are delivered.”
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Besides offering life and health insurance, Ping An also operates the biggest online health care services platform by registered users through Hong Kong-listed subsidiary Ping An Healthcare and Technology, which is better known as Ping An Good Doctor. About 15 per cent to 20 per cent of its new financial services customers were acquired following referrals by its health care units last year.
The company has already spent about 20 billion yuan on health care technology over the past decade, and the investment will grow for years to come, as it seeks to digitally link patients, doctors, medical institutions, governments and the social health insurance system, Tan said.
Even after six years of development, and a more open attitude from the government towards the practice amid the Covid-19 pandemic, only about 3 per cent of China’s medical consultations are conducted online, Tan said. And while China’s health care spending is forecast to rise to 16 trillion yuan in 2030 from 6 trillion yuan last year, as its population gets older and more well-to-do, much needed to be done to fix its unbalanced, underresourced health system, she added.
For Instance, China’s 2,382 top tier 3 hospitals were responsible for 23 per cent of all hospital visits last year, even though they made up just 0.3 per cent of the total number of hospitals in China. The country was also short of 700,000 general practitioners and 10 million medical support staff, while its 3.8 million doctors and 4.4 million nurses were overworked and underpaid, Tan said.
Moreover, with China’s national health care expenditure growing at 12 per cent a year, compared with a 10 per cent rise in its social health care funding pool, out-of-pocket medical costs, which already made up a tenth of its population’s disposal income, will rise further, she added.
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“Everyone knows that the gap [means the contribution from] commercial insurance has to increase,” Tan said. “But that number is not going to magically increase on its own … we need to work with the social insurance [administrators] and the rest of the providers, so that it becomes more sustainable.”
Last year, half of Chinese medical bills were paid for by social insurance, 44 per cent by patients themselves and 6 per cent by commercial insurance.
By working with public health administrators, Ping An can gain some influence over the level of services and costs for various medical treatments, which is helpful when it comes to designing its own insurance products, Tan said.
Three-year-old Ping An Smart Healthcare, one of the insurer’s technology units, has developed more than 3,000 artificial intelligence models to assist doctors with diagnoses, and to provide tools for patients to manage their chronic conditions out of hospital, Geoff Gao Mengxuan, its chief strategy officer, said.
Ping An Smart Healthcare is also helping the municipal government in Chongqing in southwest China monitor expenditure, operational efficiency and treatment quality at the city’s 230 public hospitals, and is assisting the Shenzhen government in keeping track of operational compliance at 1,000 privately-run clinics through digital management systems.
The company was developing its revenue sources, including project fees, subscription fees and value-added services fees, Gao said.
More from South China Morning Post:
- Chinese giant Ping An earmarks US$1.7 billion for technology that will bring its insurance, health care businesses together
- China’s Ping An Insurance overtakes BlackRock to become HSBC’s biggest shareholder