In recent years, foreign investment in the hospital sector in China has primarily focused on joint ventures, with a relatively small number of establishments. However, a significant change is underway following a joint announcement from the Ministry of Commerce, the National Health Commission, and the National Medical Products Administration, which aims to expand pilot programs in healthcare. A crucial element of this new policy is the proposal to allow wholly foreign-owned hospitals to set up operations in nine designated areas: Beijing, Tianjin, Shanghai, Nanjing, Suzhou, Fuzhou, Guangzhou, Shenzhen, and Hainan Island.
From your perspective, how do foreign-funded hospitals create a different patient experience compared to domestic public hospitals? It’s been a decade since China began promoting foreign hospitals; what transformative changes does this new policy introduce compared to earlier efforts?
To explore these differences, I visited a foreign-funded women’s and children’s hospital in Shanghai. There, I found that patients benefit from dedicated staff members who accompany them during their visits, and doctors conduct consultations lasting at least 30 minutes with each individual. Notably, the attending physician takes full responsibility for patient care, making communication seamless via platforms like WeChat.
In terms of costs, the initial pediatric consultation for respiratory issues is priced at 800 yuan, with follow-up visits costing 500 yuan. Those with commercial insurance may receive partial reimbursements, which is relatively higher than the 300-400 yuan charged at public hospitals for special outpatient services.
The Shanghai facility features a women’s and children’s hospital, three general outpatient departments, and a maternity center, staffed by over 400 healthcare professionals, with roughly 10% having international medical experience. In 2023 alone, the hospital catered to over a million patients.
During my interviews, several common characteristics emerged among existing foreign medical facilities:
1. A commitment to fostering a warm and welcoming environment for patients.
2. A strong focus on service detailed experiences.
3. The implementation of widely accepted international practices, including appointment systems, initial physician responsibility, and established consultation durations.
4. Pricing for self-paid services or commercial insurance reimbursement typically exceeds special consultation fees at public hospitals, with some clinics charging premium rates.
For example, a foreign-invested comprehensive medical institution in Beijing not only displays these features but also benefits from employing esteemed specialists from major hospitals in the city. Patients with serious illnesses often struggle to secure appointments with specialists in public hospitals or face lengthy wait times for procedures.
Examining the evolution of foreign investment policies in China’s healthcare sector highlights a history of gradual change. Attempts to establish wholly foreign-funded hospitals began a decade ago. In 2014, regulations allowed foreign investors to open hospitals in seven provinces and cities, although most investment continued through joint ventures. A significant policy shift occurred in 2015 when the medical sector was classified as restricted in the foreign investment guidance catalog. Yet, in November 2023, the government eased these restrictions, permitting eligible foreign and Hong Kong, Macau, and Taiwan doctors to establish clinics in Beijing.
According to the National Health Commission, as of 2021, there were 302 foreign-invested medical institutions in China. While this figure seems minimal compared to over 1.07 million healthcare facilities nationwide, the latest policy marks a noteworthy change.
So, what differentiates this policy from earlier ones? Firstly, the expanded scope of openness now encompasses not just major metropolitan areas but additional cities and regions, allowing a broader range of locations to benefit from foreign medical resources. Secondly, the policy is more comprehensive and specific, clearly identifying trial locations and categorizing eligible fields for foreign investment.
From an expert’s point of view, this policy announcement represents a positive progression and could act as a “catalyst effect” within the healthcare industry. Following the announcement, healthcare stocks experienced a notable surge, signaling market optimism.
Dr. Wang Hufeng, Director of the Medical Reform Research Center at Renmin University, pointed out that allowing foreign-owned medical institutions to enter the market enhances ownership diversity and injects new vitality and growth opportunities into the healthcare sector. For patients, this policy expands their options, as various medical institutions showcase different focuses, services, and methodologies to meet diverse healthcare needs.
Given China’s economic growth and aging population, the demand for medical services continues to rise. The World Health Organization estimates that by 2040, roughly 28% of China’s population will be over 60, suggesting a sustained need for healthcare services.
However, the arrival of foreign institutions also raises concerns among domestic healthcare professionals. The competitive landscape in China’s medical market may evolve with the entrance of these entities.
Dr. Liu Guoen, Director of the Global Health Development Institute at Peking University, emphasizes that the influx of foreign hospitals will foster healthy competition among Chinese hospitals—not only between public and private sectors but also in direct comparison with top international facilities. While China is making strides in technology, there is a pressing need to enhance patient-centered services, which can create significant improvement demands.
Nonetheless, some people have additional concerns. There are worries about contrasting management practices and patient treatment habits across countries, which could lead to potential incompatibilities. Some industry insiders also express concern over foreign hospitals attracting talent away from domestic institutions. Questions also linger regarding how foreign hospitals will integrate with existing basic and commercial health insurance frameworks in China.
Experts agree that while the promising aspects of expanding pilot programs are clear, regulatory authorities must enhance oversight to ensure fair competition. Dr. Wang Hufeng highlighted that healthcare institutions will vie for top medical talent to boost service quality, striving to attract more patients and grow market share. Moving forward, policymakers need to consider a range of healthcare scenarios and develop effective, standardized management policies aimed at elevating overall service quality within the industry.
The introduction of foreign hospitals also raises concerns regarding compliance with China’s current food and drug regulatory framework and ethical issues, particularly in areas like embryo implantation and organ cloning. As we prepare for these challenges, how can we proactively devise strategies for approval processes and risk management?
Dr. Liu Guoen reassures that the establishment process for foreign hospitals in China has been carefully considered, including protections for critical genetic and biological information. He insists that these institutions must comply rigorously with Chinese laws and regulations.