New | Prevention is better than cure: China’s health-care market poised for gains amid shifting values

Yu Rong, chairman of Meinian Onehealth Healthcare, has set his sights on cleaning up the preventative health-care services sector on the Chinese mainland in what he perceives as a “just-in-time” consolidation. The focus will be on constant improvement amid growing public awareness of the importance to safeguard health. Meinian and iKang Healthcare are the two largest groups engaging in medical examinations on the mainland, putting their best foot forward in tapping a 100 billion yuan (HK$120 billion) health-check market. “A consolidation of the industry is urgently needed to avoid unhealthy price wars,” Yu said. “Preventative healthcare is an industry related to people’s lives and priority should always be given to the quality of service and a heightened industry standard.” Meinian is leading a clutch of investors to bid for the control of iKang with an offering price 40 per cent higher than the bid by iKang’s chairman, Zhang Ligang. The two acquisition offers are in line with the efforts to take US-listed iKang private. Yu said that investors were preparing a detailed growth plan for iKang if they were to win the bidding war. IKang would maintain its namesake brand and independent operations with a synergy between the two health-check companies created if the Meinian-led investor group were to emerge triumphant. The two companies would join hands on data analysis and researches, Yu said, laying the groundwork for a mega business empire that could encompass health-examinations, medical research, early diagnostics and disease prevention. Currently, health check services in China cost from several hundred yuan to thousands of yuan depending on the extent of tests conducted. Heads-on competition between Meinian and iKang with a focus on reducing prices to woo clients has deterred the companies from strengthening research and development capabilities, Yu said. “Rivalry is not always beneficial to a long-term development if cut-throat competition, or a price war, becomes a stumbling block for further growth of the industry,” Yu said. “We need to avoid irrational price cuts but focus on expansion, research and innovation.” Healthcare is believed to be a highly lucrative new sector in China’s economy, buoyed by rising affluence and a government efforts to spur spending on consumption. Beijing aims to bolster consumer outlays to drive long growth of the economy. Last year the health check industry was valued at 100 billion yuan. “It’s part of China’s strategy to spur the development of the healthcare industry and it’s a good time for us to make things happen,” Yu said. “Health checks can play a vital role in medical treatment since data collected by us could help deepen research.” According to a research report by Haitong Securities, hospitals across the nation held the lion’s share of the health check market, with the biggest three specialised medical examination groups – Meinian, iKang and Ciming Health - accounting for a combined 2.6 per cent share. Meinian acquired Ciming last year. It is expected that the mainland’s health check market will grow 15 per cent annually and Yu predicts that Meinian could achieve a year-on-year growth of 50 per cent. Meinian, listed on the Shenzhen Stock Exchange, reported sales of 21 billion yuan in 2015, up 46.9 per cent from a year earlier. Yu said the company will expand into China’s smaller cities and expects 10 million customers in 2016. “Compared to the hospitals, Meinian, as a specialised preventative health-care service provider, won’t morph into a dominant player in the sector despite a projected rapid growth,” Yu said. “But we hope to establish a system for disease prevention to largely save medical costs for the country and patients.” In tandem with the fast development of genetic technology and its expanded application, a patient could save on health care costs in the long term thanks to the early diagnosis and prevent. Yu added that Meinian would invest in the latest technologies such as artificial intelligence. “Each widespread chronic disease in China could usher in a market worth more than a hundred billion yuan,” he said. “Advanced medical treatment and first-class medical services will hold the key to a successful business.”

.css-sioo19{color:#c79a00;}New | Prevention is better than cure: China’s health-care market poised for gains amid shifting values

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}An emphasis on early screening and preventive medicine is emerging among China’s newly-affluent consumers

New | Prevention is better than cure: China’s health-care market poised for gains amid shifting values

An emphasis on early screening and preventive medicine is emerging among China’s newly-affluent consumers