More hospitals to be foreign funded

Foreign investors have been given the green light to set up wholly owned hospitals in Shanghai and six other province-level jurisdictions, the government said yesterday.

The decision reflects China’s drive to open up the private health care sector as it seeks to take the pressure off the hard-hit state-run system.

Along with Shanghai, the cities of Beijing and Tianjin, and the provinces of Jiangsu, Fujian, Guangdong and Hainan are taking part in a pilot scheme that was launched last month, the Ministry of Commerce said in a statement.

Approvals for overseas-owned hospitals will be overseen by provincial governments, the statement said, adding that only investors from Macau, Taiwan and Hong Kong will be allowed to practice traditional Chinese medicine.

The three were previously the only overseas investors permitted to set up wholly owned hospitals, while investors from elsewhere were allowed to own no more than a 70 percent stake in a joint venture with a local partner.

The statement did not set any minimum requirement on the size of the foreign investment, though it did outline several other conditions of entry.

First, foreign investors must be able to demonstrate previous experience of health care investment and management.

They must also either: introduce leading management concepts and service, introduce advanced technology and equipment, or improve the health capability and make up for a local shortage of health technology, funds and equipment, the statement said.

Chinese hospitals often lack funding, and there is a steep gap between urban and rural care, which often leads to graft and tension between patients and doctors.

Widespread corruption has also made it harder for China’s poor to get access to health care, despite Beijing ordering hospitals to not turn away patients who need emergency treatment.

According to a Deutsche Bank report published in June, the number of private hospitals in China rose from 3,200 in 2005 to 11,300 last year.

The Chinese mainland’s first wholly Taiwan-funded hospital was Shanghai Landseed Hospital, which opened in the city in 2012.

Last year, the first wholly Hong Kong-invested hospital, the C-Mer Dennis Lam Eye Hospital, opened in Shenzhen, south China’s Guangdong Province.

Meanwhile, German health care operator and medical product provider Artemed Group said last month it plans to open a foreign funded hospital in the Shanghai’s pilot free trade zone.

Despite the increase in joint venture hospitals, several have complained of difficulties recruiting doctors.

This is mostly due to government policies controlling the movement of medics away from state hospitals and restrictions on the introduction of foreign doctors.

There has also been a low uptake of private medical insurance among Chinese people.

The president of Shanghai Landseed Hospital was quoted by the Economic Information Daily as saying that despite having a capacity for 1,000 patients a day, the facility handles only about 300 to 400.