Transcript 1999 CHIM EXHIBITOR MARKETPLACE
SUNY China Healthcare Panel
New York, New York March 12, 2012
The Dorenfest China Healthcare Group and Its Business in China
Presentation Agenda
About the Dorenfest Group A Foreigner’s View of Healthcare in China Current Status and Future Direction of HIT in China Where Does China Stand on the Global HIT Continuum?
Emerging Business Opportunities in China Healthcare SUNY CHINA HEALTHCARE PANEL Page 3 14 24 32 34 2 DORENFEST CHINA HEALTHCARE GROUP
About the Dorenfest Group
40 years experience in HIT Offer healthcare improvement services through a variety of businesses.
– Software – – – Hospital Operations Improvement Consultation with Technology and Software Vendors In Health Information Business Focus on improving patient care and operational efficiency through better change management – Work process improvement – – – Management systems improvement Improvement in services for patients Improvement in quality of patient care SUNY CHINA HEALTHCARE PANEL 3 DORENFEST CHINA HEALTHCARE GROUP
Dorenfest’s Investigation of China Healthcare in 2005-2006
1.
Visited 17 cities in China 2.
Met 100’s of healthcare industry leaders in China 3.
Visited over 100 hospitals to review hospital operations and define opportunities for improvement 4.
Met provincial and city health bureau leaders in cities visited 5.
Met with many companies selling products and services to the healthcare industry in China 6.
Evaluated a group of hospital ownership and management opportunities and assessed viability of the Dorenfest “model hospital” in China 7.
Developed a strategy for bringing Dorenfest skill and experience to China SUNY CHINA HEALTHCARE PANEL 4 DORENFEST CHINA HEALTHCARE GROUP
Dorenfest Vision of a Model Hospital
Provides improved quality of care to its patients Operates at a highly efficient level through effective use of systems and better work processes Offers its services to patients at an affordable cost Creates a highly satisfied patient population with the patients observing a noticeable improvement in the services and treatments provided by the hospital Utilizes appropriate digital technology to create a state of the art “digital hospital” SUNY CHINA HEALTHCARE PANEL 5 DORENFEST CHINA HEALTHCARE GROUP
China Healthcare Leaders Want to Leapfrog the World in IT Use
Chinese hospitals and health bureaus are carefully considering how to be more successful in taking next steps forward in IT use There is a recognition that for China to accomplish its objectives in HIT requires the following: – Learning quickly from the global experience – Overcoming resistance to change – Knowing how to manage change – Doing more of what the rest of the world did right and less of what they did wrong to avoid mistakes other countries have made and China is still making – Developing more expertise in these areas of need quickly SUNY CHINA HEALTHCARE PANEL DORENFEST CHINA HEALTHCARE GROUP
Chinese Hospitals Needed Help in the Following Areas
The creation of IT plans The buying of IT systems The implementation of IT systems Change management to gain benefits and improvements from new IT systems SUNY CHINA HEALTHCARE PANEL DORENFEST CHINA HEALTHCARE GROUP
The Dorenfest Group Is Bringing Needed New Skills to China
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Hospital operations improvement and change management 2.
IT program improvement, problem-solving, strategy, and planning 3.
New approaches to buying IT systems in a stronger partnership with users 4.
New ways to implement IT systems SUNY CHINA HEALTHCARE PANEL 8 DORENFEST CHINA HEALTHCARE GROUP
Project Examples
The Dorenfest China Healthcare Group was formed in 2006 to offer consulting services to China Hospitals and Health Bureaus. We have worked with over 25 hospitals and health bureaus to help them use information technology more effectively and have consulted with a variety of Chinese and Western healthcare companies Examples of health bureau clients for RHN and digital hospital planning – Shenzhen – Chongqing Examples of hospital clients – Peking University Third Hospital – – – Foshan City First People’s Hospital Shanghai Changning Maternity & Infant Health Institute Rizhao City People’s Hospital SUNY CHINA HEALTHCARE PANEL 9 DORENFEST CHINA HEALTHCARE GROUP
Project Examples (Continued)
Examples of Western clients bringing their skills to mainland China – Hong Kong Hospital Authority – – – IMS China Microsoft China Philips Healthcare China Examples of Chinese companies – – Donglian Heren Health – – Simcere Pharmaceuticals SINOPHARM SUNY CHINA HEALTHCARE PANEL 10 DORENFEST CHINA HEALTHCARE GROUP
Dorenfest Education in China – Tongren Hospital, Beijing 2005
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Dorenfest Education in China – Zhejiang Medical Association 2009
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The Dorenfest China Healthcare Group Current Status as of March 12, 2012
Still in Phase 1. Timing of Phase 2 not determined yet All our current clients like our work a lot and buy more projects from us The market is booming with interest and opportunity in the areas we have skill in We made our entry at the right time and developed the experience and reputation before all of these new opportunities emerged, and as a result are positioned with great understanding of the current situation and a good reputation in China Issues for us: – Consulting market in China HIT still very small – Dorenfest operates in China as a small entrepreneurial company, because the consulting market is small. This will not always be true, so we are now in the process of building critical mass to handle the expected growth in the market – Finding and training the right people to bring these new services to China is an important factor in the next steps in growth SUNY CHINA HEALTHCARE PANEL 13 DORENFEST CHINA HEALTHCARE GROUP
SUNY China Healthcare Panel
A Foreigner’s View of Healthcare in China
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The Development of Healthcare in China
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In the change to a more market driven economy in China, there was a shift from government funding of the healthcare system to citizen funding, which has made China the highest “patient pay out of their pocket” healthcare system in the world 2.
China’s healthcare spending has made it one of the most efficient healthcare systems in the world 3.
China’s outpatient care has followed a different model than the rest of the world, with most outpatient care now provided on hospital campuses 4.
Most countries’ healthcare systems now have problems, which generally come from not managing past changes properly 5.
China, on the other hand, has not changed its healthcare system as rapidly as other countries, so its problems are different SUNY CHINA HEALTHCARE PANEL DORENFEST CHINA HEALTHCARE GROUP
Healthcare Cost Trends ($ and RMB in billions) RMB in Billions
2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 Government Social Insurance Out-of-pocket 75 RMB ($9.6) 216 RMB ($27.8) 459 RMB ($59.1) 579 RMB ($74.7) 659 RMB ($84.9 ) 759 RMB ($97.0) 866 RMB ($126.7 ) 984 RMB ($144.0 ) 1128 RMB ($165.0) 1990 1995 2000 2002 2003 2004 2005 2006 13.8% 15.2% Annual Growth Rate 14.1% 13.6%
SOURCE: MINISTRY OF HEALTH ANNUAL STATISTICS YEARBOOK
2007 14.6% SUNY CHINA HEALTHCARE PANEL 16 Forecasted Growth Rate – 15% in 2008 and 20% in 2009 and 2010 1900 RMB ($275.0) 2010 DORENFEST CHINA HEALTHCARE GROUP
Average Medical Expense Per Outpatient Hospital Visit ($ and RMB) RMB
175 150 125 Drug Exam/Test Medical Services 118 RMB ($17.3) 127 RMB ($18.6) 129 RMB ($18.8) 136 RMB ($19.9) 100 86 RMB ($12.6) 75 40 RMB ($5.8 ) 50 25 0 1995 2000 2004
SOURCE: MINISTRY OF HEALTH ANNUAL STATISTICS YEARBOOK
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Outpatient Registration Is an Example of the Problems of Being an Efficient Investor
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Waiting to Pay for Services
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The Outpatient Health Record Which Patient Keeps
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Customer Service Has Been a Lower Priority
1. Long wait times 2. Very few advance appointment systems 3. Average time of physician visit is 2-5 minutes 4. Collecting money and making profits are a major focus SUNY CHINA HEALTHCARE PANEL DORENFEST CHINA HEALTHCARE GROUP
Challenges of the Chinese Healthcare System
1.
Over 50% of healthcare costs are paid directly by patients out of their pocket 2.
Access to healthcare for the poor has been limited, but now changing 3.
The middle and upper classes are dissatisfied with healthcare services 4.
Doctor income earning methods weaken the doctor-patient relationship 5.
Drugs and tests have funded too much of the healthcare costs 6.
Hospitals have needed to earn profits to support themselves 7.
Primary care is just beginning to separate from hospitals to newly-developed community clinics 8.
Healthcare reform will cause healthcare costs to rise more rapidly SUNY CHINA HEALTHCARE PANEL DORENFEST CHINA HEALTHCARE GROUP
Healthcare Reform in China is Bringing Many Changes and Much New Spending
1.
Basic care for people in China who cannot afford to pay for care 2.
Large stimulus spending is being made to improve healthcare 3.
Many major changes are being implemented all at once. Some are: Public hospital reform Community clinics Modernizing facilities Clinical pathways Regional health networks Electronic health records Many more 4.
The challenge for China and the opportunities for wise business people is in the management of all of these changes in a short period of time to accomplish the desired outcomes SUNY CHINA HEALTHCARE PANEL DORENFEST CHINA HEALTHCARE GROUP
SUNY China Healthcare Panel
Current Status and Future Direction of HIT in China
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The Development of HIT in China
1.
Chinese hospitals began to computerize in the early 1990s 2.
The initial focus of computer efforts was on financial systems 3.
In the early 2000s, Chinese hospitals began to implement IT for clinical systems 4.
Many software solutions are now available, with well over 500 smaller software companies now operating in the HIT market in China 5.
Between 2005 and 2010, China hospital spending on IT grew from 5 billion RMB in 2005 to 16 billion RMB in 2010, and we forecast it will rise to 21.5 billion RMB in 2011 6.
Spending will continue to grow in the next few years at an even more rapid pace as many investments are being made in information technology throughout China healthcare SUNY CHINA HEALTHCARE PANEL 25 DORENFEST CHINA HEALTHCARE GROUP
Factors Contributing to Future Spending Growth in China HIT
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China hospital work processes are redundant, expensive and error-prone. Past IT investment has increased these problems by adding work to the work processes and creating unhappy clinicians The desire to share healthcare data in cities and provinces has fueled much IT investment by health bureaus in RHNs/HIEs throughout China Improved use of IT is one of eight pillars (see chart) of the new China healthcare reform plan, giving a new momentum to HIT in China healthcare. Focuses include: Improved hospital IT systems Electronic health records (EMR and EHR) Data sharing through RHNs and integration with community clinics IT systems to support expanded health insurance Chinese hospital leaders want to take a big leap forward in improving work processes and in digitizing Chinese hospitals While money has always been a problem in Chinese hospitals, today there is much more money available from many sources, and it is now being spent more freely SUNY CHINA HEALTHCARE PANEL 26 DORENFEST CHINA HEALTHCARE GROUP
HIT Is One of Eight Pillars of China Healthcare Reform
Core of Health Reform: Establish Basic Healthcare System
Healthcare system that covers all urban and rural residents Public healthcare systemMedical service systemMedical insurance system Secured pharmaceutical supply system
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Further Implement Health Reform
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The Competitive Environment
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There are over 1,000 small software vendors active in China HIT The market segments with the most vendors are HIS, PACS, RIS, LIS, and EMR All HIT vendors in the market started in a city and most are still operating in that city or a small region around the city. Many of these smaller local vendors have a dominant market share in the area they service. Some HIT vendors have become more national in scope Many vendors in the hospital computer systems market offer heavily customized solutions rather than products. These heavily customizable solutions create greater dependency on the software vendor and are more difficult/expensive to keep current when vendors release new software updates periodically 5.
Chinese hospital leaders would like to see a new generation of HIT software developed for the country to assist in helping them accomplish their “leapfrog” objectives SUNY CHINA HEALTHCARE PANEL 28 DORENFEST CHINA HEALTHCARE GROUP
The Current Computing Environment in a Typical Large Complex Chinese Hospital Today Major Clinic Financial (Vendor 2) MD Workstation (Vendor 2) Pharmacy (Vendor 2) L.I.S.
(Vendor 3) Many Other Niche and Specialty Systems Major Ancillary Systems R.I.S./PACS (Vendor 4) L.I.S.
(Vendor 3) Blood Bank (Vendor 3) Bar Code (Vendor 3 ) OR/Anesthesia (Vendor 5) Ultrasound (Vendor 6) Stomatology (Vendor 7) Sample Current Systems (High Level View ) Core Vendor (Vendor 1) Order Management Inpatient ADT and Billing Inpatient Physician Workstation Outpatient Physician Workstation Inpatient Pharmacy Outpatient and ER Registration Outpatient Pricing and Charging Material Supply Outpatient Pharmacy Smart Card Lab Price System Inpatient Insurance Interface Instrument and Equipment Management Patient Consultation Survey RF Card Producing Sub-System Inpatient EMR (Vendor 8) Major Financial Systems Cashiering (Vendor 2) General Accounting (Vendor 2) Major Admin Systems Medical Ins (Vendor 9) Medical Ins (Vendor 10) Medical Records (Vendor 11) Human Resources (Vendor 12) Office Automation Systems
Performance Assessment System (Vendor 13) Policy Exchange Platform (Vendor 13) Webport System (Vendor 13) Hospital Website (Vendor 13)
Note: Chart taken from a couple of real hospital situations with each vendor or product family shown in a different color
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Major Areas of Future Development and Opportunity in the China HIT Market
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Application software will become more productized with greater tools to support the growing use of IT in hospitals New application software to serve the not yet automated areas of clinical work processes are emerging very quickly Integration tools to facilitate the development of an improved IT environment will emerge Data analytics products and support tools to facilitate better data analysis, reporting, and decision making will emerge as Chinese Hospital Managers grow in sophistication Service and implementation tools will improve General contracting for entire efforts with some company software and some partner software Planning and implementation services to support making better buying decisions and creating more successful implementation of software Other problem-solving services SUNY CHINA HEALTHCARE PANEL 30 DORENFEST CHINA HEALTHCARE GROUP
Today Chinese Hospital HIT Investment Is Spent Differently Than the Rest of the World 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
SOURCE: CCW Research
2005 GLOBAL H.I.T. INVESTMENT STRUCTURE 58.9% 12.2% 28.9% Global 66.6% 13.2% 20.2% U.S.
51.5% 20.7% 27.8% Europe 13.0% 22.3% 64.7% China Service Software Hardware
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SUNY China Healthcare Panel
Where Does China Stand on the Global HIT Continuum?
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Broad Comparison of U.S. and China HIT Situations
Key Element Per Capita Healthcare Spending Employees per bed HIT Spending Number of Software Vendors in a Hospital . Integration Status Size of IT Staff Dependence on Software Vendors Implementation Approaches Historic Data Available in Any Form Historic Data Available in Accessible Automated Form Clinician Use of Data SUNY CHINA HEALTHCARE PANEL 33 U.S. $7,500+ 6+ Very high 80+ Okay Very Big Medium Fair Lots Considerable Growing China $100+ 1 to 2 Very low 20+ Very bad Small Very High Bad Very Limited Very limited Limited to none DORENFEST CHINA HEALTHCARE GROUP
SUNY China Healthcare Panel
Emerging Business Opportunities in China Healthcare
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Western Businesses Now Operate in Many Markets in China
Most major Western companies and many Western investors have reviewed China for investment opportunities Large multinational companies are now operating in most industries in China – First for low cost manufacturing – Later to serve the Chinese marketplace Western companies operate in China at the pleasure of the Chinese government – When there is a strong need for what the Western company offers, the Chinese government will make it easier – When the need is reduced, the Chinese government can create a variety of obstacles for the progress of that company – The size and future growth of the Chinese marketplace is like a magnet that attracts these companies, even though there are lots of challenges for them SUNY CHINA HEALTHCARE PANEL 35 DORENFEST CHINA HEALTHCARE GROUP
Western Businesses Now Operate in Many Markets in China (Continued)
Doing business in China is different than doing business in the West. When Western companies come to China, there are many things they must learn in order to be successful in operating a business in China When Chinese companies come to the West, they experience similar adjustment issues The Chinese people are very entrepreneurial and in general are great business people. Doing business with them on their turf presents a variety of challenges for Western companies SUNY CHINA HEALTHCARE PANEL 36 DORENFEST CHINA HEALTHCARE GROUP
Western Companies in the Healthcare Industry in China
Many Western companies operate in the Chinese healthcare industry Most dominant market segments served by Western companies are: – Pharmaceuticals – Medical devices – Medical imaging Many companies in these markets have operated in China for a long time and have been quite successful in serving the Chinese healthcare industry In addition, multinational technology companies such as IBM, Hewlett Packard, Cisco, Microsoft, Intel, and others that operate in many industries in China also sell their products in the healthcare industry in China SUNY CHINA HEALTHCARE PANEL 37 DORENFEST CHINA HEALTHCARE GROUP
China Healthcare Offers New Opportunities for Foreigners
Rapid growth in healthcare spending and a desire to improve healthcare services A desire to move toward international standards for serving the growing middle class and wealthy population Skills missing in China to accomplish healthcare improvement objectives Foreign skills are valued and many universities, hospitals, and companies are bringing their skills to China Ways to serve the emerging needs profitably are still not clear SUNY CHINA HEALTHCARE PANEL 38 DORENFEST CHINA HEALTHCARE GROUP
Some Opportunities Emerge in Healthcare Services
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China has a big drive on to learn from the U.S.
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China is serving the middle class and wealthy with the same healthcare system they serve the poor people with, and there is an opportunity for better healthcare provided by foreigners to the upper middle class and wealthy 3.
New opportunities are emerging in senior care, rehab medicine, and a variety of medical specialties where China has limited skill (a good example is what happened in cosmetic care a number of years ago) 4.
Opportunities are emerging in HIT software and services SUNY CHINA HEALTHCARE PANEL 39 DORENFEST CHINA HEALTHCARE GROUP
THANK YOU.
FOR MORE INFORMATION CONTACT:
SHELDON I. DORENFEST THE DORENFEST GROUP
NBC TOWER, SUITE 2725 455 N. CITYFRONT PLAZA DRIVE CHICAGO, IL 60611-5555 U.S. OF AMERICA PHONE: 312-464-3000 FAX: 312-467-0541
THE DORENFEST CHINA HEALTHCARE GROUP
HUAIHAI EAST ROAD NO. 45 HUAIHAI PLAZA SUITE 908 SHANGHAI, CHINA PHONE: 021-51001821 WEB SITE ADDRESS: www.Dorenfest.com
E-MAIL ADDRESS: [email protected]
SHELDON’S E-MAIL ADDRESS: [email protected]
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