Pioneering Value-Based Care in China: A Conversation with Dr. Felix Lee, Co-CEO of The GBA Healthcare Group

The GBA Healthcare Group (“GBAH”) is a value-based care organization founded in 2014 in Hong Kong. It has been pioneering private-public partnerships for healthcare services with various regional governments in the Greater Bay Area (GBA). GBAH has delivered primary care training and credentialing to over 3,000 doctors and nurses in the GBA, and built over 200 private-public-partnership clinics and hospitals in partnership with regional governments. Through such a vast service network, GBAH is creating innovative alternative payment models with commercial health insurers based on family medicine and preventive care practices to implement value-based health insurance propositions. The goal of GBAH is to make healthcare services more accessible, accountable, and affordable to everyone.

GBAH is a strategic controlling investment holding of Chow Tai Fook Enterprises Limited (“CTFE”), the flagship private investment holding company of the Cheng Family in Hong Kong.

At the helm of GBAH is Dr. Felix Lee, Co-CEO and Head of Healthcare Investments at CTFE. Dr. Lee’s transition from investment banking in 2014 to becoming GBAH’s first employee marked the start of an ambitious journey to bring value-based care to China. His leadership has been instrumental in shaping the company's long-term strategy and leading its expansion into the Greater Bay Area in mainland China.

In this interview, Dr. Lee opens up about the missteps in GBAH’s early days, the turning points that prompted a shift in direction, and how the company is now positioning itself as a leader in value-based care in China—focused on improving patient outcomes while managing costs effectively. His candid reflections highlight the vital role of aligning healthcare innovation with a nation’s healthcare infrastructure and social security framework—ensuring care delivery and payment models are practical, scalable, and sustainable.

Dr. Lee challenges pharmaceutical and healthcare leaders to look beyond profit maximization, advocating for greater collaboration with commercial insurers through innovative payment models. “Healthcare can’t just be about chasing the highest margins — it will kill the much-needed balance of incentives and rewards amongst payers, providers, and patients,” he cautions, emphasizing the need for solutions that tackle high-cost chronic diseases in ways that create value for all stakeholders in an aging society.

This is a story of transformation, resilience, and the pursuit of meaningful impact in one of the world’s fastest-growing healthcare markets.

Core Strategy

Kelly: Could you share GBA Healthcare’s core strategy and the key opportunities the group envisions in mainland China with our readers?

Dr. Felix Lee: The core of our strategy is really about addressing the growing gap between health span and life span. People are living longer, but they’re spending more years in poor health – and that’s the problem we’re focused on solving.

We believe the key is strengthening primary care. If we can empower primary care physicians to do more – not just react to illness but work proactively to manage health – we can start closing that gap. It’s not just about cutting costs but shifting focus from episodic care to long-term health management.

Right now, the system is geared towards addressing disease after it happens – we get excited about the next oncology drug, CAR-T therapy, or AI-driven discovery. But fewer people are asking how we can prevent these conditions in the first place. Simple, earlier interventions often cost far less than developing the next blockbuster drug.

Our goal is to build a healthcare model that emphasizes prevention and continuity of care – so fewer people end up needing those expensive treatments down the line. It’s a global issue, but we believe the way China’s healthcare system is structured gives it a better shot at addressing this gap.

Kelly: So, your strategy focuses on shifting from treatment to prevention. That aligns with what the Chinese government is doing with the Healthy China 2030 plan. 

Dr. Felix Lee: Exactly. The key difference between how China and the U.S. approach innovative medicine is really about practicality. In China, the government isn’t going to pay U.S.-level prices for drugs, even if they’re highly effective. There’s been a lot of pain in the market – companies have IPOed in Hong Kong but are struggling to get reimbursed in China. The government supports biotech development but won’t introduce drugs the system can’t afford. 

Kelly: Indeed, prevention is cheaper and better for everyone, but we still need innovative medicine. Some illnesses are inevitable, and drugs – even expensive drugs often cost much less than inpatient care—especially when we can introduce them earlier in the treatment process.

Dr. Felix Lee: Absolutely. The system is driven by practicality. If I have $100, I need to make it go as far as possible. Our strategy works on two levels. First, we focus on prevention through stronger primary care networks, reducing the need for costly treatments. Second, we work with insurers to free up funds for innovative drugs by lowering reimbursement costs for preventable chronic diseases. 

If fewer people need expensive treatments, insurers can afford to cover innovative drugs for those who truly need them. It’s a win-win – prevention reduces costs, and more capital is available for breakthrough medicines. That’s the balance we’re trying to strike.

Private-Public Partnership

Partnering for Care Delivery

Kelly: Deploying a value-based care model that integrates commercial insurance with health management in mainland China is particularly challenging due to the dominance of public hospitals, which rely heavily on basic medical insurance and government subsidies, and the generally underdeveloped primary care system. However, The GBA Healthcare Group has successfully charted an innovative path through a private-public partnership in the Greater Bay Area. Can you share with our readers how this partnership works in practice?

Dr. Felix Lee: When we first started, we thought the way forward was to build private primary care clinics in cities like Beijing and Shanghai. But that put us in direct competition with class 3 public hospitals, which dominate those areas. At our peak, we had 15 private clinics and about 150 staff. As a non-medical professional, I was personally hiring doctors and clinic managers, constantly rotating between cities – one week in Beijing, one in Shanghai.  

But it became clear that this model wasn’t sustainable. Public hospitals had advantages we simply couldn’t match – very low to free land cost, subsidized rent, government payroll, and Yibao (BMI) reimbursements. By 2018, I realized that continuing down this path was a sure way to run out of cash. 

That’s when we shifted our strategy to focus on community health centers in the Greater Bay Area. But before jumping in, we thought hard about what we could actually bring to the table – something the government wasn’t already doing. This was a key turning point. 

Many fellow healthcare service providers are taking similar paths we took before – building their own clinics and hospitals, thinking that’s the logical way to break into the healthcare market. However, we wanted to try a different approach to expanding our service network through partnership, not competition. 

Here’s how our private-public partnership works today: 

Various regional governments had already built around 10,000 community health centers and stations in the Greater Bay Area, so we approached them with a proposition – let us improve the quality of your primary care doctors and nurses by introducing them to international primary care standards. Primary care physicians needed training anyway, and we could step in to provide it, starting with practical skills like diabetic foot exams, hypertension management, mental health care, and even basic dermatology. 

Once we built trust, we took it a step further. We proposed to the government that we put their doctors through our credentialing program. Once credentialed, these doctors would meet the standards for commercial insurers to start reimbursing their services. 

To build patient trust, we also worked with the government to redesign patient workflows at community health centers —improving patient flow, enhancing privacy, and upgrading facilities. Many clinics were built a long time ago, and improvements needed to be made to various areas, such as lighting, open exam rooms, and two doctors seeing different patients in the same space. We guided them in improving patient privacy, allowing for better services, and giving patients more time to consult with their primary care doctors — fostering greater trust.

So, naturally, the government said, “Well, you’re not a charity. What’s in it for you?” 

We kept it simple – when one of our commercial insurance customers walks into your clinic, please serve them well, and we will, together, obtain extra funding for services from commercial health insurers.

At first, the government was hesitant. “We’re a public institution. How can we accept funding from private insurers?” 

That kicked off a whole round of legal discussions. But eventually, they realized – actually, yes, especially under the Greater Bay Area policy framework, it is indeed possible to explore public institutions offering services funded by commercial insurers that BMI doesn't cover.

Today, we have 210 partnered clinics. If we had tried to build that network privately, it would have meant hiring over 6,000 staff and spending a significant amount of rent every year. This private-public partnership model lets us grow more sustainably while keeping costs low. 

We’re also not taking doctors away from the public system. Instead, we’re enhancing their capabilities, giving them the tools and incentives to deliver better care. It’s a win-win.

Distinctive Market Positioning to Integrate Commercial Insurance with BMI

Kelly:  When I read about the facilities you're creating for the doctors you’ve trained, I thought you were offering services under “self-priced, specialized medical services” (特需医疗服务) within public hospitals. 

Dr. Felix Lee: Oh, no – that’s a great question, but that’s not our positioning. You know the system well –there’s pure private care, which is the most expensive, and then there’s the VIP wing within public hospitals.

Kelly: Right, and those VIP services aren’t usually covered by BMI. I thought that’s where your services fit in. 

Dr. Felix Lee: No, that VIP wing typically costs about 70% of what private hospitals charge. For example, a surgery in a private hospital might cost $30,000, while in a VIP wing, it’s around $21,000. Regular public hospital care, though, costs significantly less – maybe $8,000. 

We sit somewhere in between –it’s a premium over public care, but well below the VIP wing pricing. 

Kelly: Ah, so when someone visits one of your partnered clinics, the physicians – having gone through your training – can provide a higher level of care than a standard outpatient visit. The clinic gets reimbursed for the regular portion through BMI, and you cover the premium portion on top of that.

Dr. Felix Lee: Exactly. And that’s important because it creates a new price point, allowing commercial insurance to step in and fund services within the public system. Public hospitals are under pressure – with DRG and DIP policies, their funding is tightening. What we’re doing is introducing new resources and better services without disrupting the core system. 

On top of that, we’re collaborating with the government to design new commercial insurance products that cover what BMI doesn’t – creating more options for patients seeking higher-value care. 

The question is – how do you encourage more people to purchase commercial health insurance? It’s all about designing products that create new incentives. 

We now have two teams – one focused on clinical innovation and private-public partnerships with the government on the care delivery side, and the other working on insurance product designs that incorporate value-based care principles. We're developing new commercial insurance products that integrate with BMI and reimburse services at different tiers. 

Kelly Ke: That makes sense – it aligns with the direction China is heading, with greater integration of commercial health insurance into the system.

Dr. Felix Lee: I think any foreign company looking at China really needs to understand how the government thinks. 

If people buy their own health insurance and use it to access services, with commercial payers covering part of the cost, that creates a new dynamic. It gives providers additional funding to deliver more patient-centered care and helps cover costs in a way that the public system alone can’t. 

That’s why I believe – if China really wants to drive innovation in life sciences, the key is to keep expanding commercial health insurance. But the system can’t treat insurers as just passive players collecting premiums and blindly covering expensive drugs. There has to be smarter product design and collaboration to make it work.

Navigating Public Hospital Performance Metrics Under Dual Stewardship

Kelly: China's public hospitals operate under dual stewardship: the NHSA oversees medical service pricing, procurement, and provider payment, while the NHC manages hospital administration and sets various performance metrics, such as per-visit costs (单次就诊费用), self-pay ratios (自费指标).  Have your collaborations with public institutions faced challenges due to these performance metrics? Or are there specific policies in the Greater Bay Area that have made it easier to integrate commercial insurance with public hospitals?

For example, when you directly reimburse public institutions for the premium portion of services, is that payment counted as part of their reimbursement, or does it still classify as self-pay by patients—potentially impacting the hospital’s self-pay performance metrics?

Dr. Felix Lee: You’re definitely well-versed in this space. The way I see it, reforms like commercial health insurance partnerships need to start in regions where the government has more tools (both in terms of national policy and fiscal support) for innovation – that’s exactly why we chose the Greater Bay Area. 

China is huge, and while the national strategy aims to lower the self-pay ratio, you can’t treat the whole country the same way. Right now, the national published self-pay ratio sits around 27%, but in some regions, it’s 30-40%. Western media often highlights this as unaffordable, comparing it to countries like Germany at 12% or the UK at 14%. But that’s only part of the picture. 

What often gets overlooked is the denominator – disposable income and local economic conditions play a big role in those percentages. Rather than focusing solely on lowering public hospital self-pay ratios under BMI, we need to guide the government to shift focus toward using commercial health insurance to help offset those costs.

Here’s how I explain it – if the total bill is 100, and the self-pay portion is 27, why not pool that 27 through commercial insurance? If everyone chips in, the individual burden might drop to 10-15 instead of the full 27. But when a major health issue arises, that pooled leverage kicks in to cover the full 27. 

That’s the mindset shift we’re guiding the government towards. Rather than fixating on the fact that 27% isn’t covered by BMI or subsidies, we help them look at how that 27% is financed. 

The goal isn’t just to lower public hospital self-pay-ratio – it’s to show how commercial health insurance can play a larger role in managing those expenses, both through the traditional approach of risk pooling and, more importantly, by implementing managed care solutions to reduce the costs of chronic diseases, ultimately supporting the public system more effectively.

Innovating Payment Models for High-Cost Chronic Disease Care

Kelly: In China, health insurance is still relatively new compared to the more established life and property insurance sectors. As a result, many insurers have adopted the same strategies and mindset used in life insurance for their commercial health offerings.

In life insurance, the focus is on accurate actuarial assessments, precise pricing, and selecting low-risk, healthy individuals. Growth is driven by heavy investments in distribution channels while keeping lapse rates under control. This approach has led to health insurance products that prioritize healthy populations while neglecting integration with health risk management.

However, this lack of integration between health insurance and health management has limited insurers' ability to cover broader populations and manage risks effectively. As a result, their capacity to fund innovative medicine remains constrained, slowing growth across the sector.

Could you share how The GBA Healthcare Group has successfully integrated insurance with care delivery—especially in chronic disease management—to help insurers mitigate risks and expand their role in the healthcare ecosystem?

Dr. Felix Lee: So if I go back to my investment banking days, if you look at the healthcare ecosystem—pharma, providers, and insurers—each operates with very different margins. Pharma companies often have net margins of 25-30%, sometimes higher if they're innovative. Providers, on the other hand, work hard but often operate with much lower margins and heavy CapEx (i.e. comparatively low operating leverage). Commercial insurers are somewhere in between—they generate revenue without needing to invest heavily in physical infrastructure, but they still carry risk. 

The problem is if one player tries to maximize profits too much, it disrupts the whole system. Healthcare can’t just be about chasing the highest margins because if you push too far, it will kill the much-needed balance of incentives and rewards amongst payers, providers, and patients. There needs to be a balance—pharma may need to make a bit less, insurers may need to reimburse a bit more, and providers need a fairer share. 

Now, I know that sounds like something pharma CEOs wouldn’t want to hear, but hear me out. This doesn’t mean pharma companies can’t profit—it’s about shifting the model. Instead of relying solely on high drug prices and pushing volume, imagine if pharma companies became part of the total cost solution from the start. 

For example, in the U.S., Medicare Advantage plans cover a broad range of services for about $14,000 a year. Pharma companies see this pool of money and want a slice of it, but they often only get paid when the drugs are used. Now imagine if, instead, pharma companies participated upfront—say through pre-paid drug models tied to insurance policies. 

Let’s take GLP-1 drugs as an example. Every time a commercial insurance policy is sold, a portion of that premium could be allocated to the pharma company in advance, almost like credits. This reduces the risk, smooths the cash flow for pharma, and provides certainty. However, the payment per administration of the drug would be lower.

This shifts the focus from fighting over reimbursement to shared incentives for better outcomes. Providers benefit, too, because they don’t have to play the same tug-of-war over reimbursement rates. This approach could allow insurers to intervene earlier—say at BMI 25, instead of waiting for patients to hit BMI 27—ultimately preventing more costly health issues down the line. 

So that's the direction we are going forward. We’re exploring similar models with Yibao (BMI) —looking at which drugs reduce overall healthcare costs and finding ways to bring them into the system preemptively. 

It’s about creating long-term value, especially for chronic disease drugs that drive the most significant spending. This isn’t about solving every issue—oncology is a whole different challenge—but for chronic diseases, this could be the path forward. 

Kelly Ke: Could you elaborate on how you manage chronic diseases and integrate that into your insurance offerings? 

Dr. Felix Lee: Sure. On the commercial side, we work on a capitation model and manage medication costs. But on the clinical side, once a patient enrolls in our chronic disease program, they're paired with a family care physician. We don’t pay the doctor per visit but rather for total care. So, if someone needs frequent visits, great. If they’re stable, maybe just a few times a year. 

We also integrate test reports, manage prescriptions, and track everything through electronic records. Instead of penalizing patients for missing meds, we dig deeper—maybe it’s financial stress or personal issues. The focus is on building and growing that patient-doctor trust relationship, with us working quietly in the background, providing tools and tech to make it all seamless. 

Kelly Ke: Do you adjust benefits based on patient behavior? 

Dr. Felix Lee: Yes, but not in the usual way. We don’t suggest offering premium rebates if you’re healthy—that feels small and transactional. Instead, we propose to insurers to consider expanding your coverage. If you’re doing well, we propose to insurers to increase your benefit limits. For example, rather than saving $100 on premiums, you might get $20,000 more in inpatient coverage. It’s about rewarding positive behavior with meaningful value, not just token savings.

What’s Next?

Kelly: What’s next for The GBA Healthcare Group? Any plans to work more closely with pharma or MedTech?

Dr. Felix Lee: Absolutely. Our 2030 goal is to scale up to 10,000 doctors and nurses, expand to 1,000 clinics and hospitals, and deliver value-based care to 10 million members. We’re already making progress—at 4,000 doctors and 210 private-public partnership clinics and hospitals—and we will keep growing by 80 to 100 clinics a year.

We’re very proud that we’ve empowered such a large network of providers to improve patient health outcomes. Of course, the biggest challenge is continuing to expand the reach and adoption of the value-based care model to 10 million members. Such expansion requires a huge collective effort from governments, insurers, brokers, and distributors — all recognizing that a healthier population, achieved through active management of chronic diseases, benefits every stakeholder involved.

Now, for pharma and insurers, collaboration is essential. For every health risk insurers don't take, the cost of caring for those patients shifts to the public health system, straining the sustainability of the healthcare ecosystem for governments, providers, and pharma. I always say—pharma and commercial carriers aren’t rivals. We’re two sides of the same coin. 

We need practical solutions for high-cost diseases. It’s not just about new drugs. If we prevent hospital visits by managing diabetes better, we can significantly reduce major expenses, such as the cost of treating end-stage renal failure. Those savings can flow back into pharma for R&D. For example, if better diabetes care saves $500 million, insurers, pharma, and doctors can share that. Pharma gets the resources for the next big innovation, and insurers benefit from healthier patients. 

This is how we solve mass health issues.  Some companies, like Novo Holdings, are already moving in this direction and actively setting up teams to explore innovative partnerships with commercial health insurers. I hope more pharma companies partner with insurers to design alternative payment models founded on value-based care principles—because, in our aging world, we need to join hands to figure this out together.