China Opens the Door for Foreign Healthcare Providers
By Thomas | Published December 06, 2010
The government of China has announced that it is to encourage the development of the private healthcare sector in the country. The news paves the way for foreign firms to gain greater access to the Chinese private healthcare market.
The news comes from the State Council – China’s cabinet office – which is backing investment from the private sector in a bid to meet the growing demand for healthcare services in the country. The new policy will provide overseas healthcare companies, with more flexibility in establishing a new business within the private health sector.
The move by the Chinese government is designed to encourage investment from overseas business to meet the increasing demand for private healthcare services in the country stemming from its rapidly expanded economy. Economic expansion has brought increased affluence among the population of China, which in return has lead to a growth in demand for private healthcare. Now the Chinese government has opened the door for foreign investment by providing greater freedom for the establishment of private healthcare institutions in the country.
Currently Chinese regulations only allows foreign firms to enter the private healthcare sector in China through a joint venture with a Chinese partner, together with a cap on the level of capital which may be held in a Chinese operation. However, the recent announcement by the central government in China will mean a gradual easing on the level of investment permitted by a foreign firm in the private healthcare sector.
The new policy also supports the use of social funds to participate in government hospital reforms, with the conversion of some government run hospitals into private medical facilities.
Part of the reform will enable foreign firms to invest more financial capital in healthcare institutions in China, with the government making the process of establishing a business in the private sector easier and quicker to achieve in an attempt to ensure healthcare demands are met.
Joint-ventures which currently exist in the private healthcare sector will still be able to get official approval from provincial authorities in China, while the new arrangements for foreign firms wishing to set up a completely foreign-owned private healthcare facility will need to receive approval by the Ministry of Health and the Ministry of Commerce in China.
The Chinese authority’s decision to cut the red tape in the planning process for foreign companies engaged in the provision of healthcare in China is intended to ensure that the country’s healthcare needs are met partly by easing some the pressure on the Chinese public healthcare system.
As constraints are eliminated, the intention is for foreign healthcare providers to establish larger-scale hospitals throughout China – to be run alongside smaller healthcare facilities – leading to an overall improvement in medical services across the country. Also the provision of foreign-run hospitals is planned to play an important role in meeting the needs of patients seeking higher standards of healthcare services.
As the new policy is implemented and a positive effect on the Chinese healthcare sector is delivered, patients will be rewarded with a better choice of medical care, with benefits to be gained from overseas expertise.
The ParkwayHealth’s Gleneagles Medical & Surgical Center is based in Shanghai and is currently one of the leading foreign-Chinese medical providers in the country. ParkwayHealth established the partnership with the locally based Huashan Hospital and Fudan University in order to provide a higher standard of medical care with a broad range of health services, which include specialist inpatient care, paediatric care, family medicine, cardiology and general surgery.
Premier hospitals such as the ParkwayHealth’s Gleneagles Medical & Surgical Center are being strongly encouraged under the new policy being installed by the Chinese government.
In a statement the government said it will privatize some publicly owned hospitals and private medical agencies will receive the same preferential tax policies as public hospitals.
The majority of partially foreign healthcare providers already present in China offer small to medium sized medical centers providing a range of procedures and healthcare services. These are predominately in the largest cities such as Shanghai and Beijing, taking advantage of demand from expats and the more affluent local population seeking private medical care.
The United Family Hospitals has a network of healthcare facilities which are present in Beijing, Shanghai and Guangzhou, being one the first foreign-Chinese healthcare joint ventures in China. United Family Hospitals offer an extensive range of medical services and products to patients in hospital facilities that are up to western nations’ standards.
The proposed policy reforms – enabling increased foreign investment in the private healthcare system in China – will mean more competition and an improvement in medical standards through overseas firms looking to capitalize on the opportunities being implemented by the Chinese authorities.
First listed on the Singaporean stock exchange in 1975, Parkway Holdings has become one of the top-quality integrated healthcare providers in Asia in the intervening years. Parkway now operates 16 hospitals in Asia, with over 3,400 beds throughout Singapore, China, Malaysia, India, Brunei, and the UAE. Parkway also boasts a nursing and health science college, extensive diagnostic, imaging and laboratory resources and the largest foreign owned medical network in Shanghai.
United Family Healthcare
Healthcare is the product of Chindex (previously the U.S.-China Industrial Exchange), which was started in the early 1980s to sell technological equipment in China. In 1993 Chindex started to focus entirely on medical equipment which gave them the knowledge and connections to start United Family Healthcare’s first hospital in 1997 as a joint venture between Chindex and the China Academy of Medical Sciences, called Beijing United Family Hospital and Clinics (BJU). Since then United Family Healthcare has expanded, adding two additional satellite clinics in Beijing as well as 3 more hospitals in Shanghai, Guangzhou and Wuxi.