Health care reform is an even bigger deal in China–and it will change the way to invest in that country
Health care spending has doubled from 2002 to 2007.
Tens of millions of people aren’t covered by any health insurance and as a result of the global economic crisis and the consequent economic slowdown millions who had insurance have lost it.
Despite the rise in health care spending the population isn’t getting any healthier. Infant mortality rates, which had steadily declined since World War II, have plateau-ed. Diseases once under control have re-emerged.
And too many people live in fear that they’ve only one illness away from poverty.
Yep, things sure are bad…in China. So bad that in January the Beijing government announced a plan to spend $124 billion by 2011 to provide some form of health insurance to 90% of the population.
That’s a huge amount of money. The dollars being thrown around in our own healthcare debate seem much larger—the draft bill now being debated in the Senate Finance Committee carried a price tag of $856 billion when first introduced by Senator and committee chair Max Baucus (D-MONT). But that’s what adding coverage for the 30 million uninsured in the United States would cost over 10 years. At $124 billion for two years the Chinese price tag is impressively large.
Especially if you remember that China is still a relatively poor country. U.S. GDP (gross domestic product) hit $14.3 trillion in 2008, estimates the CIA World Factbook. Depending on how you adjust for China’s undervalued currency, the CIA World Factbook puts the size of China’s economy at either just $4. 4 trillion (at the official exchange rate) or $7 trillion at what’s called purchasing power parity. (Purchasing power parity attempts to adjust official figures to take account of what people in different countries actually pay for the same goods and services.)
Either way you look at it—whether China’s 1,340 million people live in an economy half the size of the U.S. economy inhabited by 310 million people or one just one-third the size–spending $60 billion a year to improve health care in China has the potential to be revolutionary.
And I think it will be exactly that. Especially if it is, as I think likely, just the first wave of government spending in areas such as health care, education, retirement pensions. We are looking at the beginning of revolutionary change in the Chinese economy.
And for investors that revolution will totally change how to make money in China. Read more
40% of employers to hike cost of health insurance in 2010, Kaiser survey finds
It’s the incredible shrinking benefit.
Next year, like the current year and the year before that and the…, employer-provided health insurance will cost workers more. And fewer workers will get that benefit from their jobs at all.
40% of employers surveyed by the Kaiser Family Foundation as part of its annual poll say that in 2010 they will increase the co-pays that workers will have to take out of their own pockets when they see a doctor. About the same percentage say they will raise annual deductibles and raise the charge for prescription drugs. A slightly higher percentage, 41%, say they will increase what workers pay in premiums.
Oh, and 8% say they plan to drop coverage entirely. (About 9% say they will tighten eligibility for health benefits. No telling how many workers will lose insurance because of those changes.)
The numbers in the Kaiser survey are actually somewhat more positive than those in other recent surveys. (Now doesn’t that make you feel better?) Read more
