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Healing Private Healthcare
Not long ago , Chinese authori- ties unveiled a package
of measures, which included relaxing price controls over
non-public hospital services , in order to encourage private
capital to enter the healthcare sector. The measures were
announced in a notice jointly issued by the National
Development and Reform Commission (NDRC ), the National
Health and Family Planning Commission , and the Ministry of
Human Resources and Social Security. Upon issuance of the
notice , private healthcare-related stocks jumped by an average
of 2.25 percent in China ’s Ashare market, with some even
soaring to the daily limit. Does this measure mark the sprouts of
spring for private hospitals in China ?
Prolonged Process
Prior to the 1980s , the overwhelming majority of Chinese
hospitals were publicly-owned , and patients had to endure long
waits to consult a doctor in public hospitals , which were often
criticized for unsatisfying services. After China ’s reform and
opening-up , the government began to introduce private capital
into the healthcare sector, in hopes of breaking the monopoly
of public hospitals and forcing them to improve their services
through market competition.
In the late 1980s, investors from Putian City , Fujian
Province , became the first group to test the waters of private
healthcare in China. They earned their first windfall establishing
private clinics , and then spread their wings nationwide through
contracting or acquiring other hospitals. It is estimated that 80
percent of large private hospitals are run by Putian investors.
Over the past two decades, private hospitals have mushroomed
throughout the nation.
However , the door of China ’s hospital market didn ’t
open to foreign investors until 1997 when the country began to
approve Sino-foreign joint venture hospitals. However ,
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