Latest Insight

(June 2019)

The Growing Demand for Healthcare in China

The combination of an ageing population (which has a higher incidence of health conditions), improved diagnostics as a result of a steadily improving and increasingly accessible health service combined with significant lifestyle changes (such as diet and exercise) means that the number of conditions needing treatment in China over the next decade increases quite dramatically.

Assuming that the average per capita expenditure on health increases from US$400 pa to US$733 pa as a result of more conditions per person needing treatment, rather than an increased spend per condition this would mean health care expenditure would in total increase from being 5.3%% of total GDP in 2018 to 5.9% by 2028. This is not an excessive percentage relative to other developing countries although the level of expenditure per case is relatively low. Of the developing economies in Asia Vietnam is the only other that spends over 5% of its GDP on health However, they all except Thailand have much younger populations.

The older Asian countries (e.g. Japan) spend around 7% to 10%. It is probable that given its older population China’s expenditure on health will need to increase to those levels in the next decade. In which case the total spend on health care in China would reach US$1,672 Bn – that is a growth rate of 9.3% per annum to 2028.

Trend in the Size of the Older Population. 

This is shown in Figure 1.  While overall this document looks at the situation to 2028 this chart extends to 2033 as it is important to note that one of the key age groups in terms of ageing and demand for health services – that is 45 years to 64 years – levels off after 2028.  However, that is offset entirely by the continuing rapid growth of the 65 plus age groups which has a much higher incidence/prevalence of chronic conditions.

Figure 1: Trend in the Size of the 45 year and above Population in China

Fig 1.jpg

 In total the number of persons over the age of 45 years is projected (with some reliability as they are all alive today) to increase from 271 million to 412 million in the next 10 years.  That is an additional 141 million such persons in a decade and 14 million a year.

Why is this important?  Figure 2 shows the incidence and prevalence rates for a basket of cancer and chronic conditions respectively.  While one can argue over the representativeness of the conditions (see footnote at end) they are predominant conditions and the simple reality is that the rates for each increase dramatically after age 40 and steepens thereafter.  This is not unique to China.

Figure 2: Trend in Incidence and Prevalence of Oncology and Chronic conditions by age in China.

Fig 2.jpg

Resulting Requirement for Health Services

The implications of this in terms of demand for health services is considerable.  Just focusing on the urban population and the 8 most common cancers the total number of such cases presenting for treatment each year would increase from 1.56 million to 2.6 million between 2018 and 2028.  Assuming a survival rate of 5 years this means ongoing cancer treatments would increase from 4.6 million cases per annum to 7.56 million per annum by 2028.

For chronic conditions the number of reported cases for 5 common ones are projected to increase from 209 million to 336 million.  By 2028 there will be 989 million urban persons and assuming those that have at least one chronic condition have 2 (they tend to be less healthy) then 1 in 6 persons will be dealing with 2 or more conditions.  That translates into 168 million patients.

Figure 3 shows the projected trend in total for the 5 chronic conditions and total for the 8 oncology types for the population from 2008 to 2028.  Clearly the demand side is going to grow rapidly.  Also appreciate that this is based on the most common versions of each – there is additional cases for less common conditions.

Figure 3: Projected trend in Incidence of Oncology cases and Prevalence of Chronic conditions in Urban Population: 2008 to 2033

Fig 3.jpg

Implications for Health Expenditure

Reported data indicates that in 2018 total health expenditure (Private and Government) is 5.3% of total GDP and is US$683 Bn pa.   When divided by the population this represents US$490 per persons per annum.   This is a significant increase from the US$194 per person per annum in 2008.

If it is assumed that demand on health services generally increases at the projected rate of the sample chronic conditions described above, then the demand will grow by 4.8% per annum in terms of number of cases and assuming that the level of spend per condition is maintained then total spend per capita would increase to US$733 (reflecting the increased number of conditions per person)  This means total health spend would reach US$1,672 Bn in 2028 and 5.9% of GDP.  Basically, it means that China can continue to treat people to the same standard as 2018 through to 2028 in spite of the increased number of conditions without stressing its economy, (GDP expenditure pattern)

However, it is likely that it will also improve its overall health services and the likely share of GDP spent on health it will move up towards 9%-10% over the next one or two decades depending on how well the overall economy grows.  This would mean a spend per capita of US$1,620 and an annual growth rate of health expenditure of 9.3% per annum if achieved by 2028.


So, a definite growth market but one that has implications for the economy.

Cancers included in this analysis are: Breast, Cervical, Colon, Colo-rectal, Liver, Lung, Prostate and Uterine

Chronic Conditions included in this analysis are: Diabetes, Asthma, COPD, Hypertension and Stroke

This Insight was prepared using our on-line database.

For More Detail on China or other countries subscribe to our online database.
The data for all 109 countries and every region and city of China runs from 2005 to 2043.