Further opening-up of China’s medical sector to foreign investment is expected to promote high-quality services and better meet wider public healthcare needs, experts said. A circular, jointly issued by the Ministry of Commerce (MOFCOM), the National Health Commission (NHC) and the National Medical Products Administration (NMPA) in September, allows wholly foreign-owned hospitals to operate in Beijing, Shanghai, Tianjin, Nanjing, Suzhou, Fuzhou, and throughout the island of Hainan. Decision-makers intend for public hospitals to guarantee the basics, while foreign-owned ones provide diversified services to meet the rising demand for more personalized, higher-standard medical treatment, industry experts said. Accounting for the dominant 80% of the country’s total medical services, public hospitals stick to their priority of answering the demands of public welfare,” said Liao Xinbo, former Deputy Director of Guangdong’s Health Commission. “The spillover functions of public hospitals that are difficult to support through public medical insurance can be met wholly by foreign-funded medical institutions,” Liao added. These other functions include the use of advanced technologies and innovative therapies, and medical treatment usually done overseas, he said.
The market size of Chinese patients who travel overseas for medical treatment exceeded CNY3 billion in 2019, and surpassed CNY4 billion within three years, according to a report by Insight and Info, a Chinese portal specializing in industry analysis. Developed countries, such as the United States and Japan, were the main medical travel destinations, the report said. Many top international hospitals are different from their counterparts in China in terms of patient care, technology, management models, and service awareness.
Liu Guo'en, Dean of the Institute for Global Health and Development at Peking University said that “China’s public hospitals, especially the tertiary ones in big cities, are often overcrowded and are not in a position to provide patient-centric medical services.” Although some public hospitals have provided high-end medical services through their international departments, they are still limited due to the background and management methods of these hospitals, industry observers said. Wholly foreign-owned hospitals are not subject to the same restrictions on public medical insurance, and can set prices independently. This allows them to avoid institutional constraints and introduce industry game-changers, they said.
In 2021, there were more than 300 joint-venture medical institutions in the country with foreign investment. Around 38% were hospitals, and the rest were clinics or outpatient departments operating under an asset-light business model. Shanghai Towako Hospital, China’s first wholly foreign-owned hospital, opened in the Shanghai Pilot Free Trade Zone in 2016. The Japan-funded hospital specializes in assisted reproductive services and was profitable within three years of opening. It has had 300,000 patient visits, and provided medical assistance to nearly 2,300 babies delivered there. The United States’ investment firm Bain Capital backs APMG, which funded the Shanghai Xiehua Brain Hospital. The hospital opened in July in the Shanghai New Hongqiao International Medical Center and provides high-quality medical services for patients with central nervous system diseases. Industry insiders believe that more wholly foreign-invested hospitals will help normalize relevant rules and regulations.
While unveiling the new policy in September, authorities called for stepping up services for foreign enterprises willing to participate in trial programs. Wholly foreign-invested hospitals will help accelerate the introduction of new drugs, medical equipment, and technologies into China, industry insiders said. The move will also create a channel for medical talent from overseas to work in the country. “With a rising number of such hospitals, it will also further improve social and living security for expats in China, thereby helping the country to attract high-level talents from around the globe, enhancing international academic exchanges and promoting the development of various disciplines and scientific research innovation,” said John K. Hsiang, Chairman of Jiahui Health's Executive Committee. The company operates the Hong Kong-owned Jiahui International Hospital in Shanghai, which opened in 2017. It also runs outpatient clinics in Shanghai, Suzhou, Hangzhou, Zhejiang province, and Shenzhen, Guangdong. Fifteen percent of Jiahui’s doctors are expats, and the company provides medical services in more than 10 languages. The Shanghai hospital alone has an annual outpatient volume of 600,000 visits, and has provided medical services to over 500,000 families from more than 180 countries.
Hsiang said one important service offered at foreign-invested hospitals is connecting patients to medical resources abroad. “Based on cooperation with more than 30 top-notch medical institutions around the world, including Boston-based Massachusetts General Hospital, Jiahui is able to provide international telemedicine consultations and prioritizes referrals to overseas hospitals for patients,” he said, as reported by the China Daily.
