U.S. Health Insurers Look To China For Growth


Aetna and other U.S. health insurers are wide-eyed over business opportunities in China now that the sleeping giant has lifted its own lids.

Hartford-based Aetna plans to announce today that it has opened a “representative office” in Shanghai. That is the first step of a lengthy process for foreign companies interested in doing business in the People’s Republic of China.

Other insurers, including UnitedHealth Group and WellPoint, have established such offices in China, and CIGNA has already hooked up with a Chinese company to sell supplemental health insurance there.

U.S. insurers, fighting each other for members in their own nation’s strained economy, have been searching for more growth opportunities and entering more countries around the world. China is just one of the latest prospects. But with 1.3 billion people, a developing middle class and even some affluence, it’s a powerful draw to U.S. insurers.

“It’s a real hotbed place for large U.S. multinational or multinational corporations [from other nations] to open or expand their offices,” said Martha Temple, president of Aetna Global Benefits.

In addition to covering the multinationals’ employees, U.S. insurers might want to serve Chinese nationals as well. China offers government health care to its people, but a growing number of people who can afford private insurance buy it, sometimes to supplement the national plan.

Aetna is still a long way from deciding what it wants to sell in China. Like other U.S. insurers, the company already insures expatriates around the world — typically employees of multinationals who work outside their home countries — including China.

Aetna provides health insurance for more than 325,000 expatriates in more than 100 countries, including 10,000 to 15,000 in China. The company follows expatriates to such far-flung places as the Kyrgyz Republic in central Asia, the Ivory Coast in West Africa and Brunei on the island of Borneo in Southeast Asia.

Now Aetna is exploring whether it should offer some kind of health insurance to Chinese citizens in China, sell non-insurance services, or other possibilities. Services could include disease management, aimed at improving the health of people with chronic conditions such as asthma and diabetes, or “case management,” to manage the care of individuals with complex and high-cost medical needs.

It’s unlikely Aetna would try to introduce managed care health plans like HMOs to China, but programs aimed at wellness and controlling costs might be suitable, Temple said.

“We may take things that we’ve learned here in the U.S. and export them out to China,” Temple said.

The government-provided health insurance in China covers the majority of citizens, but it’s limited. The private market there includes a few Chinese companies.

“It’s small. It’s emerging. It’s a very complicated market,” Temple said.

One of the reasons Chinese citizens buy private insurance is that China’s hospitals tend to have separate sections — one with multiple-bed wards for people on the government health plan and the other with one- or two-bed rooms for the privately insured, Temple said.

Aetna has plenty of time to make up its mind on China since it just opened its representative office March 31. The country requires such an office to be open at least two years before a company can sell its products there. Even then, a foreign company is required to join with a Chinese company to do business.

Aetna had a joint-venture life insurance business in China years ago but sold its international and financial services businesses to ING Group in 2000.

CIGNA opened a joint venture in Shenzhen, China, in 2003 with Shenzhen Dingzun Investment Advisory Co. Ltd. to sell life, personal accident and hospital indemnity insurance. The business now has several offices throughout the country.

In 2006, CIGNA chief executive H. Edward Hanway received the Marco Polo Award, the highest honor China gives to foreign business leaders, reflecting their role in the country’s economic development.

CIGNA’s international reach, though, spreads far beyond China. It has more than 4.4 million life, accident and health policies in force in Europe and the Asia-Pacific region.

Meanwhile, WellPoint Inc. — parent of Anthem Blue Cross and Blue Shield — joined three other U.S. companies to open a representative office in April in Kangzhong, China.

The venture, called WPMI LLC, will initially offer services to Chinese insurance companies such as claims processing and fraud detection.

UnitedHealth Group established its representative office in Beijing last year and has health service operations in India and the Philippines, said Daryl Richard, a spokesman for Uniprise, a UnitedHealth unit.

China, he said, “is among the markets where we believe we can partner with employers, government entities, and health care providers to help improve health administration and risk management, as well as the coordination of care delivered to consumers.”

Contact Diane Levick at dlevick@courant.com.

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