The number is twice that of the public, and less than one-fifth of the number of visits
On January 6, Henan Hebi Jingli Hospital, which once held the "first share of Central Plains Medical Treatment", was auctioned off.
Jingli Hospital was once a star project of the "Tenth Five-Year Plan" of Hebi City, and it was also the earliest private hospital in Henan Province to enter the capital market. In 2020, the leaders of Hebi City also personally witnessed a cooperation plan of Jingli Hospital.
Many halo blessings still failed to save this private hospital.
Jingli Hospital has been in a state of loss since its listing on the New Third Board in 2016; after 2019, it has been in a state of loss. At the same time, many problems such as hospital arrears of wages, loan financing disputes, and the inclusion of actual controllers as dishonest executors have also begun to ferment.
From "everyone's attention" to "falling off the altar", Jingli Hospital is a microcosm of the ups and downs of domestic private hospitals.
At the end of 2021, the National Health Commission released the China Health Statistics Yearbook 2021. The data shows that the overall loss of domestic non-public medical institutions in 2020 is 130 billion yuan, which is about 65 times the loss of public medical institutions.
Social capital is no longer a good business.
Monks more porridge less
The Health Commission's "Statistical Yearbook" shows that in the five years from 2015 to 2020, the number of private hospitals has maintained a continuous growth.
In 2018, the total number of private hospitals in China exceeded 20,000 for the first time, and by 2020, it had climbed to about 23,500, nearly twice the number of public hospitals, accounting for about 66% of the total.
According to the caliber of the National Health Commission, the hospitals here include first-, second- and third-level hospitals, as well as ungraded hospitals, excluding simpler medical institutions such as outpatient departments and clinics.
Comparison of the Number of Public Hospitals and Private Hospitals in China (2015-2020)
Favorable policies are the most important reason for the rapid development of private hospitals. According to the rough statistics of the Health Bureau, in the past five years, at the central level alone, more than 20 documents mentioned the need to encourage the development of private hospitals. The 14th Five-Year Plan also clearly states that it is necessary to "support the social medical service and encourage experienced practitioners to open clinics".
In this case, many private comprehensive or specialized hospitals, including Lu Daopei Hospital, Aier Ophthalmology, Tongce Medical, etc., have emerged and achieved good results. Taking Tongce Medical as an example, under the impact of the new crown epidemic in 2020, the company's net profit still achieved a 6% increase, reaching about 493 million yuan.
However, the "top students" who can be seen by the market are after all a minority, and struggling to survive and even operating at a loss is the whole picture.
According to the Statistical Yearbook, the total income and expenditure of all medical and health institutions in China in 2020 will be about 4.87 and 5 trillion yuan respectively, and the overall income will not be enough. In terms of segmentation, the overall loss of public medical institutions is about 2 billion yuan; the income of non-public medical institutions is 676 billion yuan, the expenditure is 806.7 billion yuan, and the amount of losses reaches 130 billion yuan, which is 65 times more than public medical institutions.
Another set of data may explain this huge contrast.
In terms of the number of patients, the total number of public hospitals received in 2020 reached 2.792 billion. In contrast, the number of private hospitals received only about 531 million visits, down 7% year-on-year, less than one-fifth of the former.
Revenue and Expenditure of China's Medical and Health Institutions in 2020
Private hospitals, which account for 66% of the total number of hospitals in China, only bear less than 20% of the country's patients, and it is not surprising that they have lost money.
At its root, the irreconcilable contradictions of private hospitals themselves may be the main cause. On the one hand, private hospitals generally have problems such as excessive diagnosis and treatment, irregular treatment, and irregular charges, which lead to an increasing sense of distrust of private hospitals in society; on the other hand, the high cost of operation and employment is also an important reason why many private hospitals are difficult to make profits.
For example, the aforementioned Jingli Hospital launched a strategic plan for talent recruitment for the whole country in 2017, promising a maximum one-time reward of 30 million yuan in subsidies and settlement fees.
For specialized private hospitals such as Tonce and Rare that rely on doctors and services to attract customers, the cost of this item is even more amazing. Rare mentioned in the prospectus that employee benefit expenses accounted for about 38.6% in fiscal 2021.
Private hospitals also need to bear a lot of operating costs, such as rent and water costs. In terms of economic benefits, even private hospitals of the same level cannot compare profits with public hospitals.
Can you continue to take risks?
Going back in time to 2010, owning a hospital was once the "ultimate dream" of a public company.
Data show that in 2013, there were only more than 20 hospital mergers and acquisitions in China, involving an amount of about 2.1 billion yuan. But by 2016, those two numbers had soared to 108 and 16.1 billion yuan, respectively. China Resources Land Group has proposed a "small goal" of acquiring 30 companies in 5 years; Hengkang Medical, which was the "first share of private hospitals", has invested 4.3 billion yuan to buy 19 hospitals.
If hospitals can prescribe "regret medicines," these entrants may have to queue up first to register and refund the high tuition fees.
Since 2018, under the "combination fist" of cost control such as volume procurement and medical insurance payment method reform, private hospitals have gradually fallen into internal and external troubles: internally, management and operation are big problems; externally, drug prices have declined, grass-roots public medical care has risen rapidly, providing low-cost and efficient medical services, and the advantages of convenience of private hospitals have disappeared.
Especially after the outbreak of the new crown epidemic, the government's investment in public hospitals has been increasing.
According to the official website of the Ministry of Finance, during 2020, the funds subsidized to public hospitals in various provinces for "comprehensive reform" alone reached 10.086 billion yuan, not to mention other items such as training in health and health talents and special subsidies for the inheritance of traditional Chinese medicine.
At the same time, some local governments have also begun to act. For example, for those hospitals in Shenzhen that have been selected for the list of "provincial high-level construction hospitals", in addition to the provincial government subsidy of 300 million yuan, another 900 million yuan will be issued separately, and domineeringly said: "Please spend it within 3 years." ”
Financial subsidies are an important advantage that private hospitals do not have.
The Statistical Yearbook shows that in 2020, the number of public hospitals admitted nationwide fell by 15% year-on-year in 2019, a decline far greater than that of private hospitals, but hundreds of millions of financial subsidies saved public hospitals from large losses.
On the other hand, private hospitals can only take money from the market, and once there is no source of customers, loss and closure is an inevitable end.
At the end of 2020, Hengkang Medical began to transfer the hospital's assets and sold its Dalian Liaoyu Hospital for 90 million yuan. The annual outpatient volume of the local small second class can reach 160,000 at one point; in early 2021, Beijing New Mileage took over Hengkang Medical and started bankruptcy reorganization.
If you choose to survive, you may be able to survive for a long time, but it is also "difficult to escape death". In December 2021, Guangzhou Nanyang Cancer Hospital Co., Ltd. was declared bankrupt by the court due to insolvency. This was also a private specialized hospital with unlimited scenery, founded in 2009, with Sun Yan, the founder of China's Department of Oncology and an academician of the Chinese Academy of Engineering, as the honorary president, and received more than 90 million yuan of investment from Fosun Group. But at the time of bankruptcy, Nanyang Cancer Hospital only had more than 11 million yuan left on its books.
According to the data of Tianyancha, in 2019, the annual number of cancellations of domestic private hospitals was only 347. But by 2020, that number had risen to 685.
There are still people in the industry who do not accept defeat, and the rough statistics of the Health Bureau, driven by capital, including He's Eye Hospital Group, Rare Group, and Sanbo Brain Hospital, at least 10 private specialized hospitals will submit listing applications in 2021, including many "World War II" and "Three Wars".
Some industry views believe that the so-called "wave of closures" may be a round of reshuffling of private hospitals, screening out speculators who are eager to expand and venture forward, and what is left is naturally valuable.
Under the overall situation of the loss of the whole industry, can the leftovers be king?
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