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Plan will ease curbs on joint-venture hospitals

Zhao Shengnan and Wang Qingyun
Updated: Jan 20,2015 10:22 AM     english.gov.cn

China will ease curbs on joint-venture hospitals as the State Council, China’s cabinet, passed a plan on national medical and healthcare service system on Jan 19 to upgrade and balance the country’ long-complained medical service.

The plan encouraged social forces to found new non-profit medical institutions with public hospitals, to participate in public hospitals’ restructuring, and to develop professional groups for hospital management.

The document, passed at a State Council executive meeting presided by Premier Li Keqiang, was the latest move by the government to open China’s huge private hospital sector and overhaul its healthcare system.

In August, China issued a circular saying Beijing, Tianjin, Shanghai and another four provinces were allowed to carry out a pilot program where foreign investors can set up their wholly foreign-owned hospitals.

Previously foreign stakes in hospitals were not allowed to exceed 70 percent. There are also restrictions including their minimum investment, and no more than 20 years’ cooperation between domestic and foreign investors.

The period of 20 years will possibly pose a concern for foreign investors as it often takes a long time for a hospital to start making profits, said Ma Jin, a professor studying hospital management and health policies in Shanghai Jiao Tong University.

“A hospital may have just begun to make money after operating for 20 years, while investors would face new policy uncertainties when they have to decide to renew the contract or not by then,” he said.

China is an appealing market for foreign investors, with spending in the industry expected to nearly triple to $1 trillion by 2020, consulting firm McKinsey & Co Inc said.

The Chinese government has increased investment and deepened reform aimed at cutting costs and sprucing up overloaded public services, especially in the rural area.

The differences in the quality of medical services remain as health infrastructure in the countryside is especially limited, while big public hospitals in cities like Beijing were always overloaded.

The meeting on Jan 19 urged the build-up of village doctors to secure billions of rural residents’ health.

There should be at least one village doctor serving every 1,000 rural residents across the nation. Village clinics can upgrade equipment with government subsidies or through private operation, said the meeting.

The village doctors should be enjoy regular free training, and those who have education higher than junior college could have training opportunities in big provincial and municipal hospitals, it said.

Their income should also be raised and more subsidies would go to those who working in remote and border area with harsh conditions, it added, calling for studies on the possibility of contracts between village doctors and rural residents.

The meeting also ratified 2014 government special allowance to 4,914 professionals who made remarkable contribution to the nations’ development.

In another development, Li presided over a State Council plenary meeting earlier on Jan 19 to discuss a draft of government work report.

The premier usually delivers the report at the annual session of the National People’s Congress, China’s parliamentary body, in Spring.

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