On June 26, 2012, China’s first wholly foreign-owned private hospital opened its doors to patients in Shanghai. We are hopeful that this is the start of a broader trend of increasing private participation as China upgrades its healthcare services sector.
Anybody who has spent any significant time in a public Chinese hospital knows that there are few greater unmet needs in China than those existing in the healthcare services sector. China’s public hospitals are overcrowded and there are few alternatives, even for those willing to pay a premium for higher-quality care, shorter waiting times, and more personalized service.
Private investors – foreign and Chinese—have been eyeing China’s private healthcare services industry since the Chinese government began experimenting with limited private participation in 1989.
Progress since then has been slow. As of 2012, a dozen years after the start of the healthcare reforms, around 95% of all hospital beds in China are still in public hospitals, and there are only a dozen or so Sino-Foreign hospital joint ventures (mainly providing outpatient services to holders of private insurances and a very small segment of affluent Chinese nationals in first-tier cities like Shanghai, Beijing and Guangzhou).
Will the next ten years see more significant developments? This depends to a large extent on the Chinese government’s willingness to allow foreign participation in the sector.