Prof Zhang Xuan

Feature on Zhang Xuan, Assistant Professor of Economics
School of Economics, Singapore Management University 

Addressing the challenges of an ageing population through health economics  

Data can unveil surprising insights regarding the impact of an ageing population on healthcare systems. Through her research, Zhang Xuan, Assistant Professor of Economics, looks at how healthcare components in society can be better structured to deliver optimal benefits to citizens.

With increasing life expectancy, declining birth rates, and lower mortality, the world’s population is ageing – and at a rate much faster than ever before.  By 2050, the global population of those aged 60 years and above is set to double to 2.1 billion. Between 2020 and 2050, the number of persons aged 80 years or above is expected to triple to 426 million.  

Many countries are facing major challenges in ensuring that their health and social systems can keep up with this demographic shift. One important aspect is the healthcare being rendered to the elderly.  

“It is not just the patients who are ageing – the same goes for the supply side as well, for example, the primary care physicians,” says Zhang Xuan, Assistant Professor of Economics at Singapore Management University (SMU). “In the coming decades, more and more physicians are going to retire, due to the same population ageing trend. This could have an impact on the patients that they are taking care of.”  

In a recent study that leverages data from the United States, Zhang evaluated the effects of the retirement of physicians on the costs and quality of health care on elderly adults. “What I found was that even though patients may anticipate the retirement of their primary care physicians, they will not take action until the physician is actually retired. The transition is not smooth at all.” She found that there is a huge dip in primary care for these elderly patients after their physicians step down, and some patients cannot find a replacement physician even five years afterwards.  

Some patients may even stop using primary care completely and turn to specialists, resulting in significant increases in medical costs. “There is also wastage of resources; we found that the retirement of the solo primary care physicians results in higher costs to their patients, as compared to the retirement of physicians who work in a group practice. This is often due to the medical records of the patient not being handed over to a new primary care physician in a private setting.”   

However, an interesting observation was that there tends to be a surge in the detection of new chronic conditions such as depression, osteoporosis, and Alzheimer’s disease in the patients. “This is probably due to them getting a second opinion on their health,” Zhang says. “When a primary care physician has taken care of her patient for quite a long time period, she may not be able to notice some change in her patient. It could be easier for a new physician to notice some abnormal symptoms of certain conditions.”  

The early detection turned out to be a benefit of this disruption in health care, and points to the importance of getting second opinions when it comes to diagnosis she elaborates.   

Data lends a helping hand   

Zhang’s key research area is on health economics. She explains that there are two main aspects to her field. The first is on the behaviour of individuals that can be related to the accumulation of their health capital. “For example, the things you eat, the activities and lifestyle you engage in, and the healthcare you receive are channelled into the building of your human capital, of which health is a component.”  

The second aspect of health economics, which Zhang’s research focuses on, is on the interaction between the components of a healthcare system. She deep dives into the relationship between the demand side, which consists of the patients, and the supply side, comprising the physicians, hospitals, and pharmaceutical companies. “My interest is in how these elements interact with each other, and with third party components such as health insurance companies as well as the government which acts like a regulator within the system.” 

Explaining her passion for health economics, Zhang shares that in her view, health economics is now a pressing issue. “Given the current global ageing population, the overall healthcare spending in society is expected to increase. This means that we need to be smarter in how we allocate our resources to contain the increase in healthcare spending, while ensuring a high quality of care for our elderly population.”  

Another reason why she enjoys health economics is because in her work, she gets access to real-world data. “These data come from various sources, such as surveys, government agencies, and health insurance companies. They provide great insights and opportunities to address what is really happening in the healthcare industry and how we can better improve the systems.” 

Maximising resources for the elderly  

In addition to ageing populations, the global pandemic also highlighted the need for smart spending in healthcare, Zhang says. “This means using minimal resources to try to achieve as much as we can.”  

One example would be marginal hospitalisations, where it’s not entirely clear whether, on a case-by-case basis, it is cost-effective to admit certain patients. She explains, “It’s not easy, but we can work on creating better decision-making processes to decide whether certain patients actually need to be hospitalised. We want to make sure that inpatient resources are reserved for someone who needs it more.”   

Another opportunity is in telemedicine, which has become much more prevalent given social distancing measures during the pandemic. “While telemedicine can help in freeing up healthcare resources, not all conditions can be efficiently addressed in virtual settings. We need more understanding on that.”  

Highlighting the important role of technology in advancing the future of healthcare, Zhang reiterates the usefulness of data in assisting economists and policymakers in crafting suitable guidelines moving forward. “The availability of data and the capability to now process them holds great promise in advancing healthcare systems. It also reveals fascinating insights that can help us tackle existing challenges of healthcare and the ageing population. This is one of the main motivating factors of my work in the health economics space,” she says.