Unbalanced use of medical resources in China
Data source: Health and Family Planning Commission, Statistics Bureau, Shanghai Securities Research Institute
The medical service sector has performed strongly this year. The Shenwan Medical Service Index has risen by about 70% this year, and several stocks such as Aier Ophthalmology and Tongce Medical have risen by more than 100%. With regard to investment opportunities in the pharmaceutical industry, many brokers believe that the demand for medical services by Chinese residents will continue to expand, and they will continue to be optimistic about the medical service sector next year.
Southwest Securities pointed out that at present, China's medical service resources still face the problems of insufficient total amount and unequal distribution. First, the medical service personnel do not match the development of the overall medical industry, and the service gap is large. Since the reform and opening up to 2018, the compound growth rate of China's health expenditure has reached 17%, but the compound growth rate of the number of employees is only 1.12%. Second, the structural imbalance of medical services is obvious and is still growing. In 2019, tertiary hospitals accounted for only 8% of the total number of hospitals nationwide, with 2.06 billion visits, accounting for 53.7% of the total number of hospitals nationwide. The current situation of the load of tertiary hospitals led to long waiting times for medical services, poor service experience and other problems. Third, the geographical distribution is uneven. Some provinces with relatively low economic development but dense population have greater demand for medical resource allocation.
Shanghai Securities said that medical insurance is improving the standard of doctors' service payment, and the price increase of public hospital services will weaken its price advantage over private medical institutions. In fact, the special registration fees of some public hospitals are basically the same as those of private medical institutions, but the medical experience has not kept up. Therefore, private medical care has sufficient room for development in the fields of rigid demand and low price sensitivity, such as ophthalmology, stomatology, pediatrics, reproduction, etc.
"Looking forward to 2021, we are optimistic about the medical service sector." Zhu Guoguang, an analyst at Soochow Securities, said that, first, the medical demand is rigid. As the epidemic situation has delayed the time of medical treatment, with the domestic epidemic well controlled, the demand for medical treatment has rapidly recovered; Second, with the continuous improvement of residents' consumption awareness, the medical service track has long-term investment value, and the leading enterprises are more prominent; Third, policy immunization. With the further promotion of the fee control policy of the Medical Insurance Bureau, medical services as a risk aversion track are more worthy of investment.
In terms of market size, Pacific Securities pointed out that the current scale of the three major medical service markets of ophthalmology, stomatology and physical examination services is 100 billion yuan, and the growth ceiling is above 300 billion yuan. According to its analysis, the ophthalmology sector continued to grow from 2012 to 2018, with a compound growth rate of 14.7%. The scale of the private market increased from 8 billion yuan in 2012 to 20 billion yuan, with a compound growth rate of 20.23%. The ophthalmology sector has high barriers to entry, less competitive pressure in the industry, and chain hospitals have a strong competitive advantage.
In the field of stomatology, according to the data of the Prospective Industry Research Institute, the scale of China's oral service industry increased from 20 billion yuan to 88 billion yuan from 2008 to 2017, with a compound growth rate of 17.9%. Pacific Securities believes that, as the aging population brings about an increase in the demand for dental business such as planting and filling, and the consumption upgrade brings about an increase in the proportion of high-end businesses such as planting and orthodontics, together with the improvement of people's awareness of oral protection, the industry will continue to grow at a high speed in the future, with high switching costs for oral customers, and advanced entrants have the first mover advantage.
In addition, the health examination market in China has a strong demand and the market scale has been expanding. It has increased from about 47 billion yuan in 2012 to about 150 billion yuan in 2018, with a compound growth rate of 21.6%. Compared with developed countries, the coverage rate of health examination in China still has much room for improvement.
However, the market is concerned about the risk of the industry facing too rapid increase in human costs, which may reduce its profitability. For this reason, Guoyuan Securities said that most of the head service agencies have established their own training systems to self cultivate young talents to resist the substantial increase in human costs caused by the participation of high-level medical personnel. In addition, when the long-term human supply cost increases, the head service industry pattern and competitive advantage are stable, with long-term, deterministic and endogenous growth. (Reporter Zhang Xiaojie)
(Editor in charge: Huang Sheng, Wang Zhen)
