Health outcomes can transform economy

Efficient ways to deliver quality care will spur innovation in China

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.