The Fallacy of U.S. and China Hospital Collaborations – Are We Able to Bridge Ideals with Realities?

Garry Choy, Julianne Ip, & Dicken S. C. Ko

INTRODUCTION AND HISTORY

China is the fastest growing consumer market in the world with a burgeoning population that is hungry for increasing goods and services. With declining reimbursements and increasing regulatory complexity, why not export healthcare from the USA along with Coca-Cola overseas to the largest customer base in the world?

Western medicine has, in fact, been in China since the 17th century where Jesuit missionaries brought remedies into China to add to the herbalist approaches of the Traditional Chinese Medicine (TCM). However, as the geopolitical climate changed with conflicts and national unrest, the landscape in China for healthcare followed a parallel track. Ideologies of TCM conflicted with scientific discoveries of the West, leading to difficulties in handling outbreaks of epidemics in infectious diseases related to early industrialization.1 Once the People’s Republic of China was founded in 1949, China tried to incorporate both a successful integration of TCM and Western Medicine.

At present, economic and cultural clichés call for another round of collaboration between east and west. In 2011, the Chinese government took healthcare in China off the restricted list of for foreign investors, encouraging outside entities to lay claim to reforming medical care in China. With western medical practices more becoming regulated, consumer driven and legally complicated, catering to a nation of growing purchasing power with emerging first world healthcare needs is enticing. China’s healthcare market expanding faster than the overall Chinese national economic growth – a market size of $1.2 trillion USD by 2020 - a sure bet if there ever was one.

Indeed many organizations are making the bet: Healthcare America, TPG Capital, Fosun Group, and Chindex are all operating or plan to operate private hospitals in China with collaborators from the USA - “Designed in the USA, Made in China.”2 However, there are potential pitfalls that one needs to consider in this emerging trend of US-China relations in the world of healthcare.

COMPLEXITY OF CULTURAL DIFFERENCES

The actual culture of healing in China is different. A hernia repair that is an outpatient procedure in Westernized countries may take weeks of convalescence in a Chinese hospital. When one member of a Chinese family is sick, the patient becomes the center of the family’s dynamics. Many Chinese family members even move into the patient’s room to take on the role of the caretaker role along with the nurses and doctors. End-of-life care is quite different based on family dynamics and paternalistic approaches to life and healthcare. Can western collaborators adapt and begin to understand in order to deliver culturally sensitive as well as appropriate healthcare services?

PREREQUISITE FOR CHINA: AUTHENTIC BRANDING

While other industries may think this a paradox, we should not be inadvertently and especially not intentionally selling a knockoff product to the local market. One might consider the case of a failed 2500 bed public hospital in Shenzhen in 2012. Backed by China’s Ministry of Health, University of Hong Kong-Shenzhen Hospital (UHKSH) was the first public medical institution managed completely by an “outside” entity. Hong Kong University was to provide staffing of administrators and doctors. However, staff ultimately hired were locals and not representative of the first tier Hong Kong doctors but more junior faculty and less experienced staff. The large sign adorning the hospital’s front entrance that leads off with the “University of Hong Kong…” suggest a new foreign entity.3 However, the culture and services provided are still distinctly China and not primarily Hong Kong. Repeating such mistakes by having minimalistic top tier personnel while selling out the brand can be catastrophic. As western healthcare organizations step into China, one needs to recognize that the local consumers are quick to judge and see beyond the Western branding.4

AVAILABILITY AND COSTS OF USA-APPROVED DRUGS AND DEVICES IN CHINA

High-quality practice standards and evidence-based medicine are the foundations of a Western medical platform, as we rely on multi-detector CT scanners, wireless pacemakers, cutting-edge pharmaceutical agents, and countless other technologies. Despite the fact that China now has the second largest number of millionaires in the world with an emerging middle class, the average annual income per capita was the equivalent of $10,220 compared to $84,300 in the United States.5 Economics 101 dictates that the cost-curve needs to bend significantly for a reliable margin in any healthcare venture in China. Furthermore, western entities must negotiate with local regulatory agencies and develop sound relationships with the Chinese government.

HEALTHCARE INFORMATICS IN ENGLISH OR CHINESE?

The Western medical culture dictates, “it did not happen unless it is documented.” The EMR has to be the common platform from which clinicians facilitate collaboration and ultimately provide proper clinical care of patients. Even the simplest data entry into the EMR for health information exchange may need a common language, likely English. A Chinese character keyboard is not the same as typing on a QWERTY standard. Multilingual electronic medical records is also a novel consideration which has not yet reached widespread adoption or demand in the healthcare marketplace.6

HUMAN CAPITAL & STAFFING

Clearly to run an establishment and integrate itself into China, it is a necessary to hire a Chinese workforce. However, will the local workforce have the abilities to match the standards and competencies set by “Western” expectations? Simply put, are the nurses, pharmacists, and doctors trained, examined, and accredited to the same level of “standards” as those established in Western countries? The interactions of management with employees may carry a different level of expectations and understanding. Regulation concerning operating a hospital may differ dramatically in the U.S. compared to China. How will managerial oversight be managed from in China when the management may be located in the United States or elsewhere?

VIEWPOINT AND CONCLUSION

China makes no pretenses that she can gain faster with the added knowledge of Western medical care through collaborations with western healthcare organizations from the United States. Westerners make no false assumptions that we are not doing this as a purely quintessential charity. Fundamentally, immersion of a foreign culture, concept, or financial calculation into a different society will require

The overall strategy must first be answered by a self-introspection – "Are the US/Western organizations all in?" To overcome the barriers of culture, branding, costs, informatics, and staffing, the entrepreneurial institution must bear the cost of ensuring all these addressed properly with a view for quick evolutions.

A hands-off approach to management from afar is a recipe for a rapid collapse and disastrous end results. This investment is long-term and will require an infusion of financial as well as human capital. Designed in the U.S.A., Made in China theme has been overwhelmingly successful in other models. An ancient Chinese proverb said, “Be not afraid of growing slowly, be afraid only of standing still.”

References

  1. Hong FF. History of Medicine in China – When Medicine Took an Alternative Path. McGill J of Med, 2004 8:79-84.

  2. Fischl J et al. Privatization of Healthcare in the Yangtze River Delta Reion II. US Commercial Services, USA Department of Commerce. 2014 Jun:1-22.

  3. Chen F. HKU Caught on Wrong Foot in Shenzhen Hospital Venture. Ejinsight. 2014 Aug.

  4. Nip A. HKU Won’t Drop Pricey Mainland Chinese Hospital even after HK$200M Bill. South China Morning Post. 2014 July.

  5. Weagley R. One Big Difference Between Chinese and American Households: Debt. Forbes. 24 June, 2010.

  6. Coorevits P1, Sundgren M, Klein GO, Bahr A, Claerhout B, Daniel C, Dugas M, Dupont D, Schmidt A, Singleton P, De Moor G, Kalra D. Electronic health records: new opportunities for clinical research. J Intern Med. 2013 Dec;274(6):547-60.