Health Reform as the Source of Economic Innovation: A New Paradigm for Growth

Editor’s Note: On July 15, 2019, the State Council issued a series of documents on the “Healthy China Action,” comprehensively promoting a shift from a disease-centered approach to a health-centered one.

What Changes Will Healthcare Institutions Make? A contributing author to Health Circle attempts to discuss the integrated design framework for the transition from healthcare reform to health reform, focusing on the shift in the core of reforms, the transformation of revenue models, and economic innovation. The article aims to provide some healthcare institutions with exploratory ideas and adaptive tools for specific plans and actions.

“How Healthcare Institutions Can Align with the National Health Strategy”As the first article in this series, starting from the shift in the focal point of reform, we discuss how healthcare institutions can transform their mindsets.

"How Will the Revenue Model of Medical Institutions Transform Under the Background of Healthy China?"This is the second article in the series, which will explore how healthcare institutions can transform their practices from the perspectives of health performance and the transformation of revenue models.

This is the third article in the series, which will explore how to implement health reforms from the perspective of economic development.

From the perspective of total national economic output, the healthcare and pharmaceutical industry accounts for approximately 7% and is not considered a heavyweight sector driving national economic development. However, the transition from medical reform to health reform reveals the significant role of healthcare institutions in cultivating a healthy population. This approach not only reduces total healthcare expenditures, thereby lowering social costs, but also leverages healthcare institutions as the primary service setting for continuous chronic disease management. By developing effective lifestyle intervention tools—supported by scientific research, service delivery, standard setting, and information technologies such as big data and artificial intelligence—it is possible to achieve evidence-based, tangible health outcomes. This fosters mutual trust between contracted users and health services, enables precise matching of trust-based services and supplies, promotes wealth creation through a healthier regional population, and drives more robust regional economic growth.

I. Health Reform and the Establishment of a Modern Hospital Management System

Against the backdrop of national healthcare reform and the continuous implementation of health strategies, the role of medical institutions is gradually shifting from a sole focus on disease treatment to a service model centered on prevention and driven by health outcomes. To achieve evidence-based health outcomes, a new hospital management model is required to align with the progressively established tiered diagnosis and treatment system. In particular, the efficacy of close-knit medical consortia in providing health services to regional populations will continue to improve. In addressing disease treatment, emphasis is placed on data-driven evidence to enable personalized precision medicine, facilitate the research and development of new drugs and technologies, and innovate products and standards for rehabilitation and health maintenance.

The modern hospital management system is primarily aimed at achieving the established goals of healthcare reform, and it also aligns with the Healthy China strategy outlined in the 19th National Congress of the Communist Party of China: providing comprehensive and lifecycle health services to the people, strengthening the grassroots medical and healthcare service system, andGeneral PractitionerWorkforce Development. Completely eliminate the practice of subsidizing healthcare with drug profits, and improve the system for ensuring drug supply. Adhere to prevention first, advocate healthy and civilized lifestyles, and prevent and control major diseases. The modern hospital management system also serves as a tool for implementing policies, systems, and management measures to realize macro-level indicators.

Within the current framework of healthcare reform, medical institutions are reducing costs and expanding revenue streams to promote a shift in healthcare toward a health-centered model. The core concept requires increasing the weight of non-clinical departments, and based on the results of clinical research, precisely applying effective non-medical interventions to lifestyle modifications for patients as well as contracted individuals and families.

For example, in recent years, within the field of clinical nutrition exploration, low-carbohydrate diets—which have shown strong indications for conditions such as diabetes, hypertension, hyperlipidemia, polycystic ovary syndrome (PCOS)-related infertility, nervous system tumors, epilepsy, and chronic kidney disease—can achieve good patient compliance through effective therapeutic interventions during hospitalization. Furthermore, precise dietary and nutritional interventions can be implemented during hospital stays and post-surgical recovery, enabling personalized lifestyle interventions tailored to specific conditions, thereby addressing disease treatment using ingredients readily available from markets and supermarkets. It is therefore imperative to establish clinical nutrition as a first-line therapeutic approach without delay.

Through the integration of clinical nutrition services, healthcare institutions can optimize performance under the Diagnosis-Related Groups (DRG) payment system and facilitate a transformation in hospital revenue models under global budget prepayment. This approach effectively reduces insurance expenditures for specific diseases within hospitals, thereby achieving controlled healthcare spending. By implementing contracted continuous management for patients and their families, positive health outcomes can be achieved outside the hospital setting. Leveraging interpersonal influences within families, this model expands the cumulative impact of contracted management across the general population. Supported by appropriate information technology infrastructure, evidence-based data on continuous health outcomes both inside and outside the hospital can be collected. This provides medical institutions with new revenue streams and enables management innovations beyond core medical systems. Driven by intrinsic financial incentives, tertiary hospitals are encouraged to proactively collaborate with lower-tier hospitals, maximizing the practical effectiveness of contracted continuous management. Furthermore, compensation within close-knit medical consortia can be allocated based on corresponding performance metrics, shifting from a disease-centered revenue model to a health-centered one. This creates an innovative pathway that aligns with national healthcare reform policies and health strategies, while supporting the sustainable development and innovation of medical institutions.

II. Emphasize Clinical Nutrition and Health Performance Tools

The recently published study in Frontiers Research, titled “Long-term Effects of a Novel Continuous Remote Care Intervention Including Nutritional Ketosis for the Treatment of Type 2 Diabetes: A 2-Year Non-Randomized Clinical Trial,” demonstrates that two years of continuous clinical low-carbohydrate nutritional intervention can reduce glycated hemoglobin (HbA1c), fasting blood glucose, fasting insulin, body weight, systolic blood pressure, diastolic blood pressure, triglycerides, and alanine aminotransferase (ALT), while increasing high-density lipoprotein cholesterol (HDL-C), without adverse effects such as osteoporosis. Meanwhile, it achieved a 100% reduction in sulfonylurea use and a 62% reduction in insulin dosage. The UK National Health Service (NHS) has established standards for low-carbohydrate therapy in diabetes management. Following NHS accreditation, DiabetesDigitalMedia, the largest online diabetes community in the UK, conducted continuous tracking of out-of-hospital managed patients in its low-carbohydrate nutrition program. Statistical data show that each diabetic patient saves the NHS an average of £945 annually in healthcare costs, equivalent to approximately RMB 8,100. If applied to China’s hundreds of millions of diabetes patients, this approach could directly reduce national healthcare expenditures by nearly one trillion RMB per year.

The tangible labor contributions toward cost containment achieved through clinical nutrition can be evaluated via health performance assessments conducted by tightly integrated medical consortia based on division of labor and collaboration. These assessments utilize data-driven evidence and documented practical workflows, thereby linking healthcare personnel compensation to health promotion and preventive care outcomes. This approach fosters intrinsic motivation within medical institutions to actively employ non-clinical service tools centered on improving the health performance of enrolled patients, further facilitating the widespread implementation of lifestyle interventions.

It is worth noting that low-carbohydrate diets are merely one of the health performance tools in current clinical nutrition, grounded in long-term evidence-based data. Other clinical nutrition strategies, including low-fat, high-protein, and high-fiber diets, also demonstrate scientifically validated health benefits in both inpatient treatment and outpatient lifestyle interventions. Medical institutions at all levels should base clinical nutrition on diagnostic and laboratory data to personalize nutritional prescriptions, thereby driving transformative changes in inpatient diagnosis and treatment. Meanwhile, greater research and innovation in nutritional therapy should be pursued through multidisciplinary collaboration, establishing a robust supportive role for non-pharmacological interventions in disease management. This approach aims to achieve the dual objectives of controlling healthcare insurance costs and enhancing health outcomes.

III. Emphasizing the Integration of Clinical Medicine and Sports Science

Scientifically sound and rational physical activity not only promotes health in the pre-disease population but also facilitates further improvements in clinical treatment outcomes, thereby enhancing social participation and achieving a broad improvement in health performance across the entire population.

Distinct from sports medicine, sports medical science is a branch of sports science. It represents the culmination of competitive sports technology for cultivating high-level athletes, integrated with multidisciplinary clinical medicine. Over the years, it has established a standardized system suitable for treating various diseases based on athlete models, playing a significant adjunctive role, and even a direct therapeutic role, in clinical treatment.

Taking chronic obstructive pulmonary disease (COPD), a common condition in respiratory medicine, as an example, sports exercise guidance provided by professional physicians and exercise instructors, coupled with regular, quantified participation in exercise within a group-based model, can effectively reduce the frequency of hospitalizations for severe COPD exacerbations and significantly decrease medication usage. According to research from the Integrated Sports and Medicine Project in the Department of Respiratory Medicine at Guang'anmen Hospital, China Academy of Chinese Medical Sciences, adherence to exercise management for more than three consecutive months can reduce COPD maintenance medication usage by over 60%.

Integration of Sports and Medicine conducts exercise assessments based on each patient’s skeletal, muscular, cardiac, and vascular factors, enabling the formulation of personalized exercise prescriptions to prevent sports-related injuries, enhance physical function, and prevent disease.

The integration of clinical medicine and sports medicine can be implemented within hospitals. Additionally, based on patients’ actual conditions, out-of-hospital group exercise management may be selected, and wearable devices leveraging advanced communication technologies can enable real-time online training monitoring, thereby achieving continuous exercise management both inside and outside the hospital. Through data-driven evidence, health performance outcomes can be obtained, thus establishing performance evaluation criteria that allow healthcare professionals to receive compensation for health performance achievements through non-medical interventions.

IV. Big Data and Artificial Intelligence Oriented Toward Prevention

On increasingly robust interoperable information platforms, if the healthcare system can achieve health-centric, evidence-based data utilization with the goal of improving health outcomes, the intrinsic drive to form tightly integrated medical consortia will become even stronger. This will simultaneously promote interoperability among healthcare institutions in the application of disease data and health performance tools, including clinical nutrition and integrated sports-medicine approaches. Furthermore, continuous data accumulation will enable better health performance management for enrolled users within these tightly integrated medical consortia, thereby providing a basis for payment by both basic medical insurance and commercial insurance regarding cost-containment and performance-based compensation. Meanwhile, the constantly accumulating data on medical and lifestyle interventions will be organized into a structured framework, significantly facilitating new drug development and the application of new technologies—particularly novel non-medical technologies—in both clinical and non-clinical settings.

Healthcare and health services naturally constitute a scenario for universal human-information interaction. In the era of interconnectedness, the symmetric dissemination of information and the precise delivery of popular science knowledge will become fundamental characteristics of doctor-patient interactions, both within and outside medical institutions. Regarding the precise matching of information dissemination, artificial intelligence (AI) can not only assist physicians in clinical diagnosis and treatment but also ensure that lifestyle and behavioral interventions precisely reach enrolled patients and their families. This facilitates the robust implementation of lifestyle interventions and, by leveraging principles of behavioral psychology, influences and modifies health behaviors across populations. Ultimately, this achieves comprehensive lifestyle intervention encompassing dietary nutrition, scientific exercise, and mental health, while simultaneously fostering mutual trust between doctors and patients.

In summary, health reforms implemented within healthcare settings have brought about not only transformations in hospital management but also a shift in the medical model. By leveraging continuous data-driven evidence, these reforms can effectively stimulate endogenous “consortium-building” momentum within the healthcare system, thereby facilitating the establishment of medical alliances and even broader health consortia. Furthermore, this approach aligns with national policy directives, addresses social governance risks and crises arising from excessively rapid growth in healthcare expenditures, and significantly contributes to the advancement of the Healthy China initiative.