BEIJING — Patients in China have long faced limited options when it comes to foreign-run health care, but that could change as the country raises the welcome ceiling for foreign hospitals.
On September 7th, the Chinese government announced that it will now be fully open to foreign hospitals in the cities of Beijing, Tianjin, Shanghai, Nanjing, Suzhou, Fuzhou, Guangzhou and Xinjiang, as well as cities on Hainan Island. Allowed.
It marked the latest high-profile push to open up the medical sector amid a decline in foreign investment, hoping to bring competition to domestic hospitals facing chronic problems such as rising costs, overspending and corruption.
While analysts said the welcome signal from the central government was clear, it was unlikely to translate into a flood of entries, given the significant challenges of running highly localized services in a heavily scrutinized sector.
These include regulatory uncertainty for a sector that has only recently opened up relatively recently, the need to build brand recognition among mass market customers, and concerns such as hiring and training local staff.
China first allowed foreign direct investment into the domestic medical institution sector in the late 1980s, and investment rules have varied over the years. It was only in 2015 that the first wholly foreign-owned hospital was established in Shanghai.
For now, there are few foreign hospitals left in China. National data showed that by 2021, out of more than 1.07 million health and medical institutions in China, there were only 302 foreign investments and 114 of them were hospitals. The rest were clinics and outpatient departments.
In China, foreign companies are often required to form joint ventures with local partners to operate in many sectors, including healthcare, although such requirements have been gradually removed in recent years.
Mr Jack Wu, a partner at Shanghai-based Acadia Consulting Group, believes the latest move to open up the market shows the Chinese government recognizes there is still a gap between foreign and local hospitals.
He told The Straits Times that the latest government notification, issued jointly by the three national-level agencies, is meant to tell lower-level administrative agencies to be bold in examining and approving such applications.
Mr. Wu pointed out challenges such as the long wait before investment returns can be expected. He pointed to Beijing United Family Hospital, which opened in 1997 and is the first foreign-invested hospital to operate in China.
The original brand, United Family Healthcare, was founded in 1997 by American entrepreneur Roberta Lipson. Now running 11 hospitals.
“For United Family, which provides comprehensive services, their investment is huge because they have to be staffed in different specialties, yet the patient load is less than that of public hospitals,” said Mr. Wu. The firm has advised hundreds of foreign companies to enter. china
He added that regulatory uncertainty over issues such as the process of bringing in second-hand medical equipment and the need for a license to transport foreign doctors from abroad add to the complexities.
Other foreign hospitals are banking on long-term trends, such as China’s aging population and growing wealth, even as the economy has slowed in recent years.
A spokesman for Raffles Medical Group welcomed the latest announcement, telling ST that with growing wealth in China, expectations and needs in healthcare are increasing, and that means “huge growth opportunities”. have
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