Healthcare Administration Files IPO Prospectus to Expand Preventive Health Management Solutions

Healthcare Administration, translated into Chinese as "health management," has at its core the following objective: health insurance institutions systematically manage the health of their insured clients (including patients with diseases and high-risk populations) to effectively control the onset or progression of diseases, significantly reduce the probability of insurance claims and actual medical expenditures, and minimize losses from insurance payouts. On the other hand, it also refers to a process of comprehensively managing health risk factors for individuals or populations. Its purpose is to mobilize the initiative of individuals and groups, making effective use of limited resources to achieve optimal health outcomes. It encompasses areas such as public healthcare system management, medical service system management, and hospital network management.Health management refers to both an industry and a discipline. Extensive preventive medicine research conducted domestically and internationally has demonstrated that for every 1 yuan invested in prevention, 8.59 yuan can be saved in medication costs, along with approximately 100 yuan in associated expenses such as emergency care, lost productivity due to absenteeism, and caregiving services. Health management is a form of preventive medicine that addresses root causes. It provides health education to individuals and populations, enhances awareness and capacity for self-management of health, assesses and monitors lifestyle-related health risk factors, and delivers personalized interventions. These measures significantly reduce disease risk and improve individuals' quality of life.

Early health managers were known as patient advocates. At that time, more than half of the members of the American Hospital Association were nursing graduates. Other hospital administrators included physicians, general faculty members, and clergy. Today, this profession is no longer confined to hospitals; numerous specialized health management companies have emerged. “Health Manager” has become an emerging profession. In Western countries, health management programs are a vital component of the healthcare system and have been proven to effectively reduce individuals’ risk of disease while lowering medical expenditures. It is reported that the United States spends approximately $218 billion annually on health management, accounting for about 1.43% of its total economic output. The share of health management spending in the U.S. economy rose from 0.9% in 2009 to 1.43% in 2012. Experience in the United States demonstrates that effective proactive prevention and intervention increase the likelihood of patients adhering to prescribed medication regimens by 50% and enable physicians to prescribe more effective medications and treatments with a 60% higher probability, thereby reducing patients’ overall risk by 50%.

In China, with the continuous improvement of people's living standards and the growing elderly population, health management has gradually become a focal point of public attention. The health management industry in China is developing rapidly; currently, there are over 3,000 professional health management companies in the country, several of which have secured tens of millions of dollars in financing. It is estimated that more than $1 billion in domestic and foreign capital will be invested in China’s health management sector. In China, new types of portable, mobile, and interconnected healthcare terminals and informatization products have reached a level of detection capability, accuracy, and cost-effectiveness that allows for their widespread adoption in Chinese households. Personalized and modern health management, fully leveraging modern medicine and informatics as well as the advantages of contemporary communication technologies, can precisely identify target populations through standardized operational procedures. This approach provides an interactive platform for doctor-patient communication and offers targeted, low-cost solutions and pathways for health improvement.



The Difference Between Healthcare Management and Healthcare Administration

These two concepts are easily confused, as both can be literally translated into Chinese as “health management.” In reality, however, they represent two distinct aspects of the healthcare industry. The distinction between them is somewhat analogous to that between sales and marketing. While both sales and marketing generate revenue for a company, they accomplish this goal in different ways. The sales department serves as the face of the company, engaging with customers through face-to-face interactions, whereas the marketing department expands the corporate customer base through channels such as advertising. The primary difference between healthcare administration and healthcare management is that the latter focuses on healthcare institutions, while the former emphasizes personnel management.

An efficient healthcare administrator will be thoroughly familiar with their institution to better understand patient needs, thereby facilitating more effective health management.

Current Realities of Health Management in China

Currently, health management remains a novel concept for the majority of people in China. The target demographic for health management services is relatively narrow, primarily focusing on individuals with higher economic incomes. Public awareness remains low, and certain core principles of health management have yet to gain widespread acceptance. For instance, some individuals may spend tens of thousands of yuan annually on cigarettes, yet consider spending a few hundred yuan on health management “too expensive.” When illness strikes, they are forced to incur substantial costs seeking consultations with renowned specialists. In reality, proactive prevention through health management could help them avoid such unnecessary expenditures.

The first company in China registered for health management services emerged in 2001. Currently, there are approximately 3,000 such companies. Although the health management sector has achieved a certain scale, it remains in its early stages overall in China, with the following issues still present:

1) Government support for health management needs to be strengthened.

2) Public awareness and acceptance of health management are low.

3) The operational mechanism of health management is not yet mature.

4) The development model of health management companies remains to be explored.

Text | Xu Huiting

Edited by | Huang Jia