Page 390 - 2018 White Paper on the Business Environment in China
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8 White Paper on the Business Environment in China
2.14 Healthcare
Background and health institutions had offered 7.015 million beds,
namely 5.11 beds for per thousand people. According to
The acceleration of population aging and a Circular on Accelerating the Construction of Health and
growing awareness of health care have Old-age Service Project, medical and health institutions
prompted the rapid development of China’s hospital should provide an average of 6 beds for per thousand
industry. China’s more than 35-year-old “one–child people by 2020.
policy,” which ended in January 2016, successfully
stemmed population growth and ensured economic Driven by the reform of public hospitals and other
stability. The total fertility rate (TFR) dropped from policies, China has set off a wave of social capital inrush
3.78 births per woman in 1979 to 1.6 per woman in toward the medical industry and witnessed an upsurge
2016, but the effects of the one-child policy were not in the number of private hospitals. By the end of
all desirable. The proportion of elderly Chinese relative October 2016, there had been 15,798 private hospitals
to the overall population has increased significantly in China, accounting for 55.3 percent of the total
over the past decade and a half. Further, it appears that hospitals. However, the revenue of private hospitals is
repealing the controversial policy has not delivered less than 10 percent of the total hospital revenue. In the
the results sought by the Chinese government. Long- forthcoming years, Chinese private hospitals will grow,
term suppression of fertility in females and high costs with the number registering 20,262 and the revenue
associated with childbirth and childrearing significantly reporting 639.6 billion yuan by 2020. Specialized
reduced people’s willingness to have children in China. hospitals require low investment costs but trigger
Meanwhile, slow population growth also relieved high return on investment. Coupled with the robust
stress on scarce educational and medical resources. demand, they have attracted the fanatical investment
Due to improvements in quality of life and medicine, of social capital. Private hospitals occupy more than 65
the average life expectancy for China increased from percent of Chinese specialized hospitals. In recent years,
71.4 to 77 years and is projected to reach 80 in 2050. It the revenue of Chinese specialized hospitals has been
seems likely that this fast growing, yet aging population growing by around 20 percent. The current revenue
will raise concerns for the development of the world’s exceeds 300 billion yuan. Among specialized hospitals,
second largest economy. The elderly dependency ratio, ophthalmic, stomatological, orthopedics, and beauty
which represents the number of elderly people per hospitals enjoy exceedingly high profitability, with the
every 100 working people, will increase from 13.7 to profit margin of above 10 percent. For instance, Aier
46.7 by 2050 (Sferrazza, pt 1). Eye Hospital, the nation’s largest chain ophthalmic
institution, boasts over 100 facilities in the country and
Healthcare serves more than 3 million yuan outpatients annually.
The company achieved the revenue of 1.92 billion yuan,
As of October 2016, the country had built a total of the net income of 280 million yuan and the net profit
28,584 hospitals, an increase of 7,666 compared with margin of 14.6 percent in the first half of 2016 (RM).
that in 2010. These hospitals produced an estimated 708
billion yuan in 2016, soaring 163.3 percent over 2010. The increase in the number of elderly people
As of the end of 2015, a total of 666 million Chinese corresponds with rising life expectancy and prevalence
people had enjoyed urban basic medical insurance of chronic illness. With more and more Chinese suffering
and 670 million people held new rural cooperative from chronic illnesses, plus expensive treatment costs
medical insurance, marking the full coverage of medical and longer recovery times, the Chinese healthcare
insurance. At the same time, the national medical system is laden with tension. Moreover, chronic disease
390
2.14 Healthcare
Background and health institutions had offered 7.015 million beds,
namely 5.11 beds for per thousand people. According to
The acceleration of population aging and a Circular on Accelerating the Construction of Health and
growing awareness of health care have Old-age Service Project, medical and health institutions
prompted the rapid development of China’s hospital should provide an average of 6 beds for per thousand
industry. China’s more than 35-year-old “one–child people by 2020.
policy,” which ended in January 2016, successfully
stemmed population growth and ensured economic Driven by the reform of public hospitals and other
stability. The total fertility rate (TFR) dropped from policies, China has set off a wave of social capital inrush
3.78 births per woman in 1979 to 1.6 per woman in toward the medical industry and witnessed an upsurge
2016, but the effects of the one-child policy were not in the number of private hospitals. By the end of
all desirable. The proportion of elderly Chinese relative October 2016, there had been 15,798 private hospitals
to the overall population has increased significantly in China, accounting for 55.3 percent of the total
over the past decade and a half. Further, it appears that hospitals. However, the revenue of private hospitals is
repealing the controversial policy has not delivered less than 10 percent of the total hospital revenue. In the
the results sought by the Chinese government. Long- forthcoming years, Chinese private hospitals will grow,
term suppression of fertility in females and high costs with the number registering 20,262 and the revenue
associated with childbirth and childrearing significantly reporting 639.6 billion yuan by 2020. Specialized
reduced people’s willingness to have children in China. hospitals require low investment costs but trigger
Meanwhile, slow population growth also relieved high return on investment. Coupled with the robust
stress on scarce educational and medical resources. demand, they have attracted the fanatical investment
Due to improvements in quality of life and medicine, of social capital. Private hospitals occupy more than 65
the average life expectancy for China increased from percent of Chinese specialized hospitals. In recent years,
71.4 to 77 years and is projected to reach 80 in 2050. It the revenue of Chinese specialized hospitals has been
seems likely that this fast growing, yet aging population growing by around 20 percent. The current revenue
will raise concerns for the development of the world’s exceeds 300 billion yuan. Among specialized hospitals,
second largest economy. The elderly dependency ratio, ophthalmic, stomatological, orthopedics, and beauty
which represents the number of elderly people per hospitals enjoy exceedingly high profitability, with the
every 100 working people, will increase from 13.7 to profit margin of above 10 percent. For instance, Aier
46.7 by 2050 (Sferrazza, pt 1). Eye Hospital, the nation’s largest chain ophthalmic
institution, boasts over 100 facilities in the country and
Healthcare serves more than 3 million yuan outpatients annually.
The company achieved the revenue of 1.92 billion yuan,
As of October 2016, the country had built a total of the net income of 280 million yuan and the net profit
28,584 hospitals, an increase of 7,666 compared with margin of 14.6 percent in the first half of 2016 (RM).
that in 2010. These hospitals produced an estimated 708
billion yuan in 2016, soaring 163.3 percent over 2010. The increase in the number of elderly people
As of the end of 2015, a total of 666 million Chinese corresponds with rising life expectancy and prevalence
people had enjoyed urban basic medical insurance of chronic illness. With more and more Chinese suffering
and 670 million people held new rural cooperative from chronic illnesses, plus expensive treatment costs
medical insurance, marking the full coverage of medical and longer recovery times, the Chinese healthcare
insurance. At the same time, the national medical system is laden with tension. Moreover, chronic disease
390
