China recently announced a new five-year road-map for reform of its healthcare sector. The National Planning Guideline for the Healthcare Service System (2015-2020) is the first comprehensive five-year blueprint targeting keys areas for development by 2020.
Faced with the challenge of insufficient resources and poor quality of service in the sector, the reform of the healthcare sector is both a social and strategic priority for China. Despite the introduction of the initial healthcare reform plan a decade ago, the healthcare sector continues to be burdened by resource shortages and underdevelopment in rural areas.
TTC is particularly well placed to increase existing services and develop new services for its 360+ clinics and 18 million clients in the following key areas formally specified in the plan.
1. Traditional Chinese medicine
Traditional Chinese medicine is one of the key target areas for development. By 2020, one Chinese traditional medicine hospital is to be established in every county and municipality. In addition, there will be a target for traditional Chinese medicine hospitals to have 0.55 hospital beds for every 1000 residents in a community.
Traditional Chinese medicine is the core business of TTC and TTC is well positioned to continue being a leading provider of traditional Chinese medical services. The 2020 target will provide opportunities for TTC to not only provide traditional Chinese medical services in the TTC clinics but to also support hospitals with outpatient services and at-home care.
2. Institutional cooperation for senior care
To meet the increasing demands of an expanding ageing population, the Government calls for the cooperation of medical service and senior care institutions. In particular, medical service institutions are encouraged to allocate beds for senior care. In turn, senior care institutions will be allowed to provide limited medical care where conditions permit. The Government encourages senior care services to be provided at the local community level and home care services to be made available to alleviate the burden on the hospital system.
TTC's client base includes middle aged and old aged individuals and the introduction of aged care courses in the TTC education institute will enable TTC to provide a comprehensive range of aged care services to individuals through TTCs extensive network of clinics and in-home services.
3. Embracing technology
New technological advances have made the provision and management of healthcare more accessible. New technologies such as the IOT (internet of things), cloud computing, mobile internet and wearable gadgets have resulted in the proliferation of online healthcare products and applications. The Government will continue to encourage the adoption of online healthcare products. Following the introduction of China's telemedicine guidelines last year. It is expected that telemedicine will continue to thrive in the coming years.
Technology will enable TTC to connect with clients daily, allowing them to schedule treatments, purchase required health products and engage directly with their therapist. In addition, TTC can provide an extensive range of health information and educational materials to its clients.
Health Cities Initiative by the China National Health and Family Planning Commission
The cities are required to integrate practical exploration and theoretical innovation to form new and innovative methods to build healthy cities.
In a further boost for the Chongqing based TTC, the city of Chongqing was included in the thirty-eight cites and districts in China recently chosen as the first batch of pilot healthy cities by the National Health and Family Planning Commission (NHFPC). TTC was founded in Chongqing more than 16 years ago.
According to the plan, China will promote healthy lifestyles, improve health services, optimize health industries, and build a medical system that can provide basic health and exercise services to every citizen by 2020.
The scale of this new opportunity is reflected in the municipality of Chongqing which has a population in excess of 30 million.
Being a leading healthcare company in Chongqing, TTC will be at the forefront of the working with the Chongqing authorities to support Chongqing being a health city. In addition, with clinics in many of the other cities chosen for the healthy city pilot, TTC can also support the authorities in those cities to become healthy cities.
China Healthcare Industry Forecasts
The scale of this rapidly developing healthcare market in China is reflected in the statements by the Vice chairman of China Insurance Regulatory Commission (CIRC) who forecasts health service industry revenue of Rmb8tn in 2020 and senior care industry revenue of Rmb10tn in 2030.
The Australian healthcare sector, by comparison, is estimated to be approximately Rmb 0.82tn (AUD 160bn ) growing to Rmb 1.23tn (AUD242 bn) by 2020.
About Traditional Therapy Clinics Ltd
Traditional Therapy Clinics Limited (ASX:TTC) is a franchisor and the owner of one of the largest chains (by number of clinics) of traditional therapeutic health and wellness clinics in China. It currently has 346 franchised clinics and 26 owned clinics in operation. It is a well established business with a strong growth profile, employing a repeatable and scalable business model. TTC has a highly recognised and respected brand, having received the prestigious Chinese Well-Known Trademark designation from the State Administration for Industry and Commerce. It operates within a strongly regulated industry sector of significant scale, which offers opportunity for further growth.
TTC is an ASX listed company employing around 1,000 staff across 27 of the 33 administrative divisions in China. More information is available at www.ttcltd.
Traditional Therapy Clinics Ltd