Enhancing Openness: Strategies to Expand Shanghai's Health-care Sector

Editor's Note:

The International Business Leaders' Advisory Council for the Mayor (IBLAC) brings together top executives from leading multinationals to share insights on Shanghai's development strategy. Each company brings forward a paper that draws from its global practices as well as local insights. Shanghai Daily has selected and summarized some of the most insightful recommendations for the city.

Shanghai has established itself as a leading health-care hub in China, boasting a robust medical infrastructure, top-tier hospitals and a strong pipeline of clinical talent and research capabilities. The city has proactively been reforming its health-care system through a series of policies that prioritize openness, digital integration and the development of a tiered care model.

Key initiatives such as the "Healthy Shanghai 2030" Action Plan, Diagnosis Related Groups (DRG)/Diagnosis Intervention Packet (DIP) payment reforms and the Smart Hospital Pilot Program have helped to position Shanghai at the forefront of national health-care innovation.

However, the city's health-care system is facing growing pressures from a rapidly aging population, escalating health-care costs, talent shortages and overcrowding in tertiary hospitals. Payment systems like basic medical insurance (Yibao) are under strain due to rising demand, while other payment frameworks remain underdeveloped.

Community health services, including lower-level hospitals, clinics and home health services, remain underused. There is much potential to optimize health-care resource allocation and improve compatibility across different levels of care.

Although reforms have been introduced to address these issues, further improvements would help ensure sustainability, accessibility and quality.

To navigate these challenges, international case studies from Japan, the United Kingdom and Singapore can serve as references for next steps.

Japan's long-term care insurance (LTCI) and community-based elderly services, the UK's gatekeeping and integrated care systems, as well as Singapore's mixed financing model and medical tourism framework, all provide valuable lessons for Shanghai.

These cases underscore the importance of outcome-based payment structures, public-private collaboration, talent development and system integration.

To address existing challenges and fully realize its potential as a regional leader in medical service delivery, innovation and research, Shanghai can localize best practices from other advanced medical markets, including those identified above.

As such, we recommend the Shanghai government consider the following strategies:

Reforming payment systems

Diversifying its payment systems is key to the sustainable reform of Shanghai's healthcare system. Shanghai could take the lead in establishing value-based, hybrid payment models that incorporate both fee-for-service (FFS) and capitated payment structures, encourage private commercial insurance as a supplement to Yibao, and optimize infrastructure for DRG/DIP to facilitate data sharing and better patient outcomes.

The city should also allow participants of Hong Kong's Elderly Health Care Voucher Scheme to use their vouchers at both public and private institutions in Shanghai.

Optimizing the tiered health-care delivery structure

To further enhance the tiered health-care system, Shanghai needs to elevate the role of primary care, incorporate private health care into the overall delivery system, give incentives for referrals across care tiers and ensure digitalized integration of medical records across the city. This will alleviate the pressure on large tertiary institutions and enable more efficient use of resources.

Strengthening the development and allocation of medical talent

To combat clinical staffing shortages, Shanghai should adopt targeted policies aimed at improving the efficient allocation of medical talent and boost the city's appeal to international health-care workers.

Recommendations include diversifying opportunities for medical professionals, encouraging multi-site practice citywide, attracting international medical talent through reciprocal licensing agreements and fast-track visas for foreign doctors in high-demand specialties and reforming licensing requirements to address the shortage of nurses and caregivers.

Elevating Shanghai as a destination for medical tourism

As an international city, Shanghai has the potential to promote medical tourism as a key part of attracting clients and clinicians both nationally and globally.

City leaders should promote Shanghai's centers of excellence, grant access to clinical trials, enhance insurance integration and establish a comprehensive infrastructure and policy framework for medical tourism.

By implementing strategic reforms inspired by international best practices, Shanghai can effectively address existing gaps while solidifying its position as a sustainable, accessible and globally competitive health-care hub.