Page 348 - 2020 White Paper on the Business Environment in China
P. 348
0 White Paper on the Business Environment in China
As of February 2019, there had been a total of costs, while painting a new reality where both
33,000 hospitals in China, an increase of 1,866 in patients and clinical talent flows towards private
the same period of 2018. In the first two months hospitals. Public hospitals work on the following
of 2019, there were 550 million patient visits to five aspects: construct better performance
hospitals in China, up 3.2 percent year on year. management systems, improve the patient
China’s medical resources have soared as well. By experience, introduce marketing management
the end of 2017, medical and health institutions systems and establish a solid relationship
had offered 7,940,300 beds, including 6,120,500 of mutual trust with patients, encourage
in hospitals, which meant 5.71 beds per 1,000 standardization of medical services and clinical
people, a figure that should number 6 (including processes, and optimize and integrate hospital
for inpatients) in 2020, according to the Circular on information systems. By leveraging the power of
Accelerating the Construction of Health and Old- both industrial and institutional capital, private
age Service Project. Also, China’s medical security hospitals will realize accelerating integration and
system has been improved. By the end of 2018, market expansion, and improving management
1,344.52 million people, or over 95 percent of the capabilities, technical expertise, service quality
country’s total population had been covered by the and scale-oriented operation. Nevertheless, the
basic medical insurance system, including 316.73 rapid market expansion will bring greater risks for
million urban employees, 4.5 percent more than in which careful decision-making is essential. Private
the previous year, 897.41 million urban and rural hospitals should carefully consider the local
residents, a year-on-year increase of 2.7 percent, economic context and competitive landscape, as
and 130.38 million rural residents who were under well as healthcare and tax policies, to determine
the new rural cooperative medical care system, a the appropriate strategic plan.
part of the basic medical insurance system.
There are four promising growth areas. The
Chinese hospitals are divided into public high-end premium healthcare market will extend
hospitals and private hospitals by economic type. into lower-tier cities, while main customer groups,
Policies concerning the reform of public hospitals on which key specialties focus, will shift from
have allured the inrush of social capital into the middle-class to high-end customers. At the same
medical care industry, leading to a surge in the time, services that integrate medical services
number of private hospitals. As of February with tourism are also expected to grow. Chain
2019, there had been 21,165 private hospitals in Specialty Hospitals with higher replicability and
China, including 2,185 new ones compared with service quality are expected to be hot spots for
the same period of 2018 and accounting for 63.9 investment. Meanwhile, with hospital reform,
percent of the total number of hospitals. Social particularly with increased medical professional
capital largely flows to specialized hospitals that mobility, private hospitals will be able to enter
need low investment but produce a high return specialty areas that previously held high technical
on investment and are in demand. In China, over barriers. General Hospitals have high barriers to
65 percent of private hospitals are specialized entry given its greater requirement for funds, talent
hospitals. Revenue of Chinese specialized and management. This also means that these
hospitals have been growing at a rate of 20 percent hospitals with high public standing will be hard to
or so over the years. Among specialized hospitals, duplicate with an apparent first-mover advantage.
ophthalmic hospitals, stomatological hospitals, Increased emphasis on quality of life and health
and plastic surgery hospitals are quite lucrative, services will accelerate the development of the
all with a profit margin of above 10 percent (R&M). health sector; the rapid development of health
capital markets, and the interest of traditional
Public hospitals are expected to hold a medical institutions towards telemedicine, mobile
dominant role in China’s healthcare system, health and wearable devices is evidence of this
retaining a strong pool of talent and medical change (Deloitte).
resources. However, national health reform is
forcing public hospitals to overhaul their revenue China will improve the sound development
streams, improve their service efficiency and cut of private hospitals in a bid to increase medical
348
As of February 2019, there had been a total of costs, while painting a new reality where both
33,000 hospitals in China, an increase of 1,866 in patients and clinical talent flows towards private
the same period of 2018. In the first two months hospitals. Public hospitals work on the following
of 2019, there were 550 million patient visits to five aspects: construct better performance
hospitals in China, up 3.2 percent year on year. management systems, improve the patient
China’s medical resources have soared as well. By experience, introduce marketing management
the end of 2017, medical and health institutions systems and establish a solid relationship
had offered 7,940,300 beds, including 6,120,500 of mutual trust with patients, encourage
in hospitals, which meant 5.71 beds per 1,000 standardization of medical services and clinical
people, a figure that should number 6 (including processes, and optimize and integrate hospital
for inpatients) in 2020, according to the Circular on information systems. By leveraging the power of
Accelerating the Construction of Health and Old- both industrial and institutional capital, private
age Service Project. Also, China’s medical security hospitals will realize accelerating integration and
system has been improved. By the end of 2018, market expansion, and improving management
1,344.52 million people, or over 95 percent of the capabilities, technical expertise, service quality
country’s total population had been covered by the and scale-oriented operation. Nevertheless, the
basic medical insurance system, including 316.73 rapid market expansion will bring greater risks for
million urban employees, 4.5 percent more than in which careful decision-making is essential. Private
the previous year, 897.41 million urban and rural hospitals should carefully consider the local
residents, a year-on-year increase of 2.7 percent, economic context and competitive landscape, as
and 130.38 million rural residents who were under well as healthcare and tax policies, to determine
the new rural cooperative medical care system, a the appropriate strategic plan.
part of the basic medical insurance system.
There are four promising growth areas. The
Chinese hospitals are divided into public high-end premium healthcare market will extend
hospitals and private hospitals by economic type. into lower-tier cities, while main customer groups,
Policies concerning the reform of public hospitals on which key specialties focus, will shift from
have allured the inrush of social capital into the middle-class to high-end customers. At the same
medical care industry, leading to a surge in the time, services that integrate medical services
number of private hospitals. As of February with tourism are also expected to grow. Chain
2019, there had been 21,165 private hospitals in Specialty Hospitals with higher replicability and
China, including 2,185 new ones compared with service quality are expected to be hot spots for
the same period of 2018 and accounting for 63.9 investment. Meanwhile, with hospital reform,
percent of the total number of hospitals. Social particularly with increased medical professional
capital largely flows to specialized hospitals that mobility, private hospitals will be able to enter
need low investment but produce a high return specialty areas that previously held high technical
on investment and are in demand. In China, over barriers. General Hospitals have high barriers to
65 percent of private hospitals are specialized entry given its greater requirement for funds, talent
hospitals. Revenue of Chinese specialized and management. This also means that these
hospitals have been growing at a rate of 20 percent hospitals with high public standing will be hard to
or so over the years. Among specialized hospitals, duplicate with an apparent first-mover advantage.
ophthalmic hospitals, stomatological hospitals, Increased emphasis on quality of life and health
and plastic surgery hospitals are quite lucrative, services will accelerate the development of the
all with a profit margin of above 10 percent (R&M). health sector; the rapid development of health
capital markets, and the interest of traditional
Public hospitals are expected to hold a medical institutions towards telemedicine, mobile
dominant role in China’s healthcare system, health and wearable devices is evidence of this
retaining a strong pool of talent and medical change (Deloitte).
resources. However, national health reform is
forcing public hospitals to overhaul their revenue China will improve the sound development
streams, improve their service efficiency and cut of private hospitals in a bid to increase medical
348
