Telemedicine in China: The Growing Market
As China continues to modernize its healthcare system, the struggle remains to provide increased levels of care to its citizens while keeping the costs of access reasonable. China stretches over 9,596,960 square kilometers and is home to 1.35 billion people who have varying levels of access to their nation’s healthcare system. Telemedicine in China stands as a powerful tool to help equalize and increase access across this vast country, and recent developments in both data infrastructure and healthcare spending help shape a positive outlook.
Telemedicine, according to the American Telemedicine Association, is the practice of providing healthcare services remotely to patients – often over great geographic distances. Such services rely on communications technology in conjunction with healthcare information technology (HIT). These systems of hardware and software supply physicians with access to the patient through live video feeds and the patient’s history through an electronic database system. The main competitor to telemedicine in China is traditional face-to-face consultation which requires physical travel and thus significant time lost, which can quickly offset the cost of increasingly available telemedicine hardware.
Current Uses of Telemedicine in China
The Dalian University of Technology in Liaoning reported on several telemedicine systems that currently operate on low-bandwidth connections (which prevent the transfer of larger amounts of medical data). One of the first systems, the International MedioNet of China (IMNC), began in 1997 and has grown to include a consortium of 300 hospitals and 3000 physicians who use the system for their medical practice. Cross regional systems have also seen past success: by 2002 the Shanghai University Telemedicine System successfully completed a connection between Beijing and Shanghai, and in 2004 the Gansu county telemedicine system began long distance connectionsas far as Beijing to Osaka- over 2200 kilometers apart. The People’s Liberation Army (PLA) started a satellite based telemedicine system in 1997 that has now evaluated over 3500 medical cases, linking over 200 military and civilian hospitals and numerous remote military camps.
There are several ways that telemedicine in China can be utilized to tap into the Chinese healthcare market. The first is simple remote monitoring of patient populations, which helps healthcare providers keep an accurate picture of societal health in a given region. These activities do not necessarily require a video connection, rather only the transmission of information/data (vital signs, heart rate, blood pressure)to a central monitoring center. The beginnings of such a wide-reaching system already successfully operate in the form of the Wireless Heart Health Program, operated by Life Care Networks. This system uses 3G cellular networks and enabled devices to provide heart-screening data from patients in the Shandong, Anhui, and Sichuan provinces.
The second use of telemedicine in China is to link distant or even foreign providers with healthcare expertise to domestic Chinese clients. Dr. Scott Binder, a pathologist at UCLA, noted that the increased purchasing power of middle and upper class Chinese brings in demand for the top brands of healthcare, namely western institutions such as the Mayo Clinic, UCLA, or Stanford. Such a service and product can provide a rapid and accurate diagnosis as demanded by savvy educated consumers, while decreasing travel time and costs. Such systems can and have already been employed within China to better serve remote locations, such as the previously mentioned PLA system, and the IMNC.
Thirdly, telemedicine in China is useful to treat acute illness. One prime candidate for emergent telemedicine services are patients with acute stroke, and China faces 2.5 million new stroke cases each year. Strokes result when a region of the brain suddenly experiences decreased blood-flow, and preventing long-term damage requires diagnosis and treatment to begin within 3-4 hours. A 1986 study estimated a stroke incidence rate of roughly 1.41 per 1000in China, but a more recent study published in 2013 calculated a much higher rate. This study found that among Chinese island populations there was an incidence of stroke between 5 to 6 per 1000 – a nearly fourfold increase. Given the time-sensitive nature of illnesses like stroke, the American Heart Association recommended that telemedicine be used, especially in rural areas, to ensure patients can be quickly diagnosed and treated.
An expanding Market
A recent directive from the Chinese government began laying the framework of a regulatory structure for telemedicine practices. In an attempt to standardize remote care, “Circular 51” mandates these remote care systems to be used within or between hospital systems, and therefore direct-to-community care is off the table for the time being. This directive also mandates that the equipment must be up to date and only be used with certain trained personnel, which Chinese Lawyer and contributor to Health Intel Asia, Michael Qu, notes significantly raises the cost of entering the telemedicine market in China. As the Chinese healthcare system continues to expand, this will increase demand for not only physicians, but also “physician extenders”,or assistants needed on both sides of the remote care system to help implement the care. As more personnel enter the pool of healthcare providers in China, and the telemedicine and HIT hardware systems continue to become more available on the mainland, it is Qu’s prediction that more tier-2 and tier-3 hospitals will begin utilizing this technology. Such a prediction is well within reason – while Chinese healthcare has become increasingly modernized, it still remains plagued by large discrepancies in the level of care of patients spanning significant geographical distances.
A study published by the Chinese ministry of Health in the mid 2000’s reported that 4700 township level hospitals, roughly 11.8% of these hospitals, did not even have a licensed physician practicing. Telemedicine in China also has the potential to ease China’s shortage of physicians, which exists even in urbanized areas, such as Hong Kong which will need 6200 more physicians by 2041.Therefore utilizing a system that can more widely distribute an individual physician’s practice will help ease a chronic personnel shortage that China, and even more developed countries like the United States face.
While the directive leaves questions about standardizing reimbursements for providers of telemedicine services, the systems themselves provide a framework to manage billing practices and accommodate future payment programs. Federal Telemedicine in the United States recommends that telemedicine systems also be used to facilitate reimbursement, integrating patient care and billing by utilizing the existing infrastructure to keep track of patients and services.
Chinese healthcare spending is projected to grow from a modest $357 billion in 2011 to whopping $1 trillion in 2020, opening the possibility of implementing once cost-prohibitive solutions. Over a six-year period, from 2005 to 2011 a dramatic increase of per capita healthcare spending in China took place, increasing from $119 to $261 per patient. As the healthcare system is modernized, in part through increased allocation of resources, telemedicine sits as not only a potential player but a necessary cost-cutting tool.
Successful Cases and Physical Limitations
While China’s s foray into telemedicine provides an optimistic outlook for the practice, the data infrastructure for the country remains a major hurdle to widespread implementation. The 2004 Shanghai to Beijing connection was operating on a speed of about 128kbps, and the Beijing to Osaka network ran at 528kbps – both still fairly low bandwidth. While connection speeds in China have increased since this study was conducted, the China daily reported that Q2 mainland internet connection speeds averaged 1.5mbps, ranking 98th in the world (world average 2.6mbps). However, there are important recent developments in Chinese data infrastructure. A prime example is the American internet giant Google’s first investment in the Chinese market: Innolight, a manufacturer of high speed optical transceivers used to allow servers to communicate through fiber optics. The proliferation of fiberoptic technology is being advocated by the Chinese government, which requires all new homes to be fiberoptic equipped as of 2013. Thus, the data infrastructure of China is rapidly becoming modernized and increasingly capable of handling bandwidth-intensive activities such as telemedicine.
The requirement that telemedicine systems employ both trained staff and up-to-date technology increases the initial cost for telemedicine providers. However, the ability to more efficiently access a much larger pool of patients by eliminating inefficient travel should more than offset such costs. Further, adoption of telemedicine in China will at the very least increase demand for healthcare professionals and for certified institutions supplying the training for personnel. Increased hardware availability and high-speed data infrastructure reach combined with greater per-capita healthcare expenditures currently places telemedicine in China in a unique and powerful position — able to improve healthcare, decrease costs, and increase profits.