>> China opens healthcare market
China opens healthcare market to private investment
The Shanghai International Medical Center doesn’t plan to target patients with minor diseases like fevers or colds, but rather individuals with major medical needs. By the time it opens early next year it will have cost 1.5 billion yuan, and be the first domestically owned private hospital in the city.
"Private organizations can provide higher-quality service to satisfy a different kind of patient. If you have only the public hospitals which need to provide basic healthcare services to everyone, then who will satisfy the demand for higher quality healthcare?" Zhang Chengyu, Hostital Director of Shanghai Int'l Medical Center said.
Despite health ministry encouragement, it still remains very difficult to get official approval to set up a private hospital. Zhang says some of the regulations set up for public hospitals are simply too out of date for modern private institutions.
"Our doctors often work at different hospitals and institutions. But the health authorities will only allow you to build a hospital when all of your employees work exclusively for you. But in fact, these doctors are able to complete some of their work using tele-imaging technology, and they don’t need to actually work in my hospital." Zhang Chengyu said.
Once the new hospital opens, it will charge patients on average five times the amount that a public hospital would. A healthcare professor points out that to make this quality of healthcare available to people other than the rich, however, means that China’s system of commercial health insurance system must be improved.
"We start to have middle-class people and rich people. They still have a huge demand to purchase what we call "the complementary" health insurance, because right now, the social insurance only provides quite a limited, basic insurance coverage. It is very likely that in the next five to ten years, private health insurance will play a big role in China, because the demand is there." Cai Jiangnan, Professor, CEIBS said.
The government says the value of China’s healthcare industry will reach 8 trillion yuan by 2020, almost double this year’s figure.