Richard Bartlett, Associate Director, IPIHD
Shu Chen, candidate for the Masters of Science in Global Health, Duke Global Health Institute
Jeffrey Moe, IPIHD researcher and Executive in Residence, Fuqua School of Business, Duke University
Innovative private-sector health care delivery models are found across the globe. These models bring services directly to patients – not voucher schemes; not clinical or medical innovation, like new drugs or diagnostics, but new processes in the service delivery system. And these services operate at significantly lower costs. Aravind in India, One Family Health in Rwanda, LifeSpring Hospitals are examples of pro-poor, low cost, high quality innovative health care delivery.
Is health care delivery of this type occurring in China or is it “under the radar?”
Duke is home to the International Partnership for Innovative Healthcare Delivery (IPIHD) which identifies and supports such innovators. As a collaboration among the World Economic Forum, McKinsey and Company and Duke, IPIHD has identified 26 exemplars on every continent with one notable exception: China. Is this type of innovation not occurring in China or is it perhaps intentionally “invisible.”
The programs are sustainable and can be organized as for-profit or not for profit. One example, briefly described, is salaUno in Mexico.
Based in Mexico City, salaUno is a replication of the acclaimed Aravind and LV Prasad eye care facilities in India. Like these exemplars in India, salaUno is following six success factors.
- Charismatic leadership with an unflagging commitment to lean production, continuous process improvement and patient-centered care.
- Mission to serve all income levels, achieved through a cross-subsidization structure of fee-paid care covering low/no-cost indigent care; clinical quality of outcomes, however, does not differ by the cost of care.
- High volumes with low fee-structures for paying patients/insurers; the high volumes intensify experience which increases the quality of care.
- Standardization of processes reduces training time, eliminates wasted steps and allows health workers at every level to focus on a limited, specific set of tasks with associated quality measures and continuous improvement approaches.
- “Right-skilling” re-organizes roles and responsibilities to each worker trained to specific knowledge, skills and abilities; tasks are parsed away from high cost surgical or opthamology roles and shifted to others.
- Teaching creates a continuous flow of ever-increasing-in-experience high skill roles; less-experienced high-skill workers take lower intensity/complexity cases; professionals move up over time into more complex cases under the supervision of the more experienced.
Are there salaUno-like innovators in China? If not, why not; if so, where are they?
Dan Breznitz and Michael Murphree argue in the “Run of the Red Queen” that China’s high growth innovation in information technology has been propelled and constrained by “structural uncertainty.” Structural uncertainty has four features:
- central government launched reforms,
- bureaucracy organized where different levels (central, provincial, municipal; multiple ministries with overlapping jurisdiction) are allowed to act where one is not necessarily inferior/superior to another,
- person-centric power that can be exercised in governmental agencies/ministries,
- ever-changing and loosely defined economic reforms.
The authors describe the Chinese level of structural uncertainty as intense, perhaps more intense than other global political-economic systems, and in that uncertainty has emerged a powerful ability to grow and innovative within the information technology sphere.
We can extrapolate the structural uncertainty concept to health care and it can support two opposing interpretations: private health sector innovation has been stultified or innovation is occurring but in a cloaked way that is hard to observe.
We invite readers to nominate China-based delivery models as exemplars to join IPIHD or offer their own explanations why we don’t find or have trouble observing pro-poor, low cost, high quality health care innovation in China. After these explanations we hold up three Chinese private sector health care examples.
Explanation #1
China health care delivery is heavily dominated by government provision of services. Yes there are private hospitals but they are primarily focused on middle to upper income Chinese; not pro-poor models of care delivery. The “fortune at the bottom of the pyramid”, to use CK Prahalad’s notion, is not in the sights of Chinese entrepreneurs. They are more attuned to the opportunity created by a rising middle class. The reforms of 2007 and 2010 are delivering more government care to the under-served and in a fashion that resembles “structural uncertainty”: competing provinces and ministries with differing interpretations and priorities. Until those reforms reach their full potential and under-served or dissatisfied segments create opportunities for innovators, health care delivery will continue to be dominated by public offerings. If this line of thinking is directionally correct, and obviously broad-brush and incomplete, we would conclude that the private heath sector innovation, as championed by IPIHD, is not occurring in China.
Explanation #2
In an emerging market like China pro-poor, delivery innovation may be hard to see but is occurring. We know economic growth has been rapid in the fast growth East Cost areas like Beijing or Shanghai municipalities, Fujian province, Shenzhen or Hangzhou. We assume that growth includes pro-poor, highly cost-efficient delivery of care is also occurring but it is hard to identify. Perhaps “structural uncertainty” and the threat that an innovator could be interpreted as being in violation with government policies encourages a very low public profile. Perhaps innovators are intentionally “under the radar” because a powerful party or government official could re-interpret rules and shut down the enterprise. Is successfully innovation which is targeted at the “poor” would be frowned upon by the public; by ministries or government officials? Would a successful pro-poor health delivery model be allowed to flourish and be profitable; if it is achieving comparable or even greater levels of quality and throughput than government sponsored alternatives would that attract the wrong kind of attention? Would the innovator, once recognized, perhaps be required to take on patients that government hospitals don’t want; perhaps patients that are sicker or more difficult to manage, or simply to relieve some of the high demand on public facilities? Perhaps media, both print and digital social media, are not focused on raising the visibility of health care alternatives for the poor; perhaps the poor aren’t their target readers so this innovation is under-reported. We can speculate that successful health care delivery innovators are in China, but are intentionally less visible due to a variety of reasons including structural uncertainty.
A very unsystematic review has identified Aier Eye Hospital network, Concord imaging centers and Li Yapeng Children’s Hospital operating in China (see below). A brief summary from their respective websites and public China media give a capsule of their story. What about these innovators; is this pro-poor, low-cost, high quality delivery innovation in China?
Please join in our dialogue about health care innovation in China by offering your own ideas on this blog. If you see innovation, please describe it so IPIHD can follow up and gather more detail. If it’s not occurring please offer you own explanations. What do you make of Aier, Concord and Li Yapeng Hospital? Are these innovators like salaUno or something different, perhaps uniquely Chinese innovation? Understanding global health care innovation and encouraging its replication is the important mission of IPIHD and you can help.