Innovative finance for lung cancer screening in China



Reports of cancer patients’ growing reliance on homemade or smuggled drugs illuminate the challenges confronting China’s health-care system in its battle against the nation’s most deadly disease.

Cancer claimed 2.2 million Chinese lives in 2013, with lung cancer taking the largest percentage, nearly 600,000 people. Worse, the incidence of cancer is rising rapidly due to severe air pollution, persistent tobacco use, and a rapidly greying population. This has strained health services and added to the financial burdens of patients and their families. According to a 2017 study in China, total treatment costs are estimated at 2.5 times of household income in 2014. Lost productivity adds to the economic impact.

Although the government is moving to lower drug prices and fast-track the approval of imported medicines, more can be done to save lives and reduce the costs of treatment. Foremost among them, we must address the cost and availability of cancer screening. When lung cancer is discovered early, the survival rate is 50 percent higher and treatment costs are lower.

To encourage early diagnosis, the China National Lung Cancer Screening Guideline recommends yearly low-dose CT imaging screenings for individuals who have smoked for more than 20 years. Despite this, China still relies primarily on ad hoc pilot screenings organised by municipal governments and NGOs that lack the resources to fund large-scale programmes. Moreover, screening costs, ranging from CNY400 to CNY700, are not covered by state and private insurance.

Adequate screening will require scaling up existing programmes. To accomplish this, costs, hospital staffing constraints, and the public’s limited understanding all must be addressed. Each calls for a creative approach that taps the resources of both the public and private sectors.

Several potential solutions were suggested earlier last year when the Milken Institute convened investors, donors, medical professionals and government officials in Guangzhou to address the problem. The meeting yielded practical strategies for closing the funding gap, including tiered pricing, public-private matching funds, and social-impact bonds. Local and regional prize competitions for the best public-outreach strategy could be employed to increase public awareness of the need for regular screenings.

How might these options work?

A tiered-pricing approach would categorize individuals by income and charge high or middle-income individuals more. Their payments would subsidise discounted pricing for those with lower incomes. The Aravind Eye Hospital in India has used this model successfully, although eye screenings and cataract surgery are easier to scale than cancer diagnosis or treatment. It will be necessary for clinics or hospitals to understand the volume and price levels needed to break-even or make a profit, and to conduct a simulation to determine the appropriate subsidy levels for lower-income communities in each city or province.

The second idea is for an anchor donor or government to match private funds dollar-for-dollar to encourage participation. However, free screenings should be avoided. Requiring patients to pay part of the cost will reinforce the perception that screenings are important. A survey may be conducted to gauge interest and demand from potential donors, and model the fund size.

Because many people have limited knowledge of cancer, there is a need for more effective public outreach. Many at-risk individuals are unaware that cancer begins long before the symptoms appear, and others may disregard testing because they believe cancer cannot be cured. The disappointing turnout for a colorectal screening programme from 2016 to 2018 in Guangzhou demonstrated the limitations of standard government campaigns relying on mainstream and social media. More creative approaches are needed. One solution might be to hold local or regional competitions that offer funding to the entrepreneurs who design the best campaign.

Any long-term solution must include new funding sources to supply more radiologists, nurses, and programme coordinators. A pay-for-performance social-impact bond issued by governments or hospitals could raise the necessary capital without additional government spending. If an increase in screening efficiency and early diagnosis leads to long-term cost savings for the government, a portion of the savings can be used to repay investors. If there is no improvement, the investors will bear all the costs. Selecting appropriate metrics to determine the return on investment is crucial for the success of this model.

The Chinese have a saying, “duìzhèngxiàyào,” which literally means “prescribing the right medicine for the illness.” A broader interpretation is that we must employ the right solution to solve a problem. Only by galvanizing the public and private sectors to provide sustainable funding for screening can the country manage the formidable economic and social strain caused by lung cancer.

Belinda Chng is director for policy and programs at the Milken Institute Asia Center in Singapore. Caitlin MacLean is senior director of innovative finance at the Milken Institute in Santa Monica, CA.