Listed private hospitals suffered three major "soul torture"? Insiders: No need to over-interpret!

On March 15, a letter of assistance signed by the Department of Structural Reform of the Health Commission (hereinafter referred to as the "Letter"), which was widely circulated on the Internet, attracted industry attention.

The Letter proposes three "soul tortures" that refer to the listing and financing of for-profit medical institutions.

Affected by this, the stock prices of many private listed medical institutions have fallen to varying degrees.

In this regard, industry experts believe that the market is suspected of over-interpreting the "Letter", and assisting in providing research data is a routine behavior every year, nothing more.

Three "Soul Tortures"

As mentioned in the above-mentioned "Letter", in order to promote the sustainable and standardized healthy development of social medical services, the relevant departments are now required to assist in providing relevant research materials in three aspects.

These three aspects all point to the issue of listed financing of for-profit medical institutions:

Is it in line with the policy guidance for the development of the health industry?

Will there be a bad demonstration within the healthcare industry?

Will it lead to the risk of disorderly expansion of social capital?

Affected by this, the stock prices of many private listed medical institutions have fallen to varying degrees. According to statistics from the health community, at the close of the market on March 15, Aier Ophthalmology fell by 11.41%; Tongce Medical, Samsung Medical and others fell to a halt; Sharp Aisi and Yingkang Life fell by more than 7%.

In this regard, some insiders revealed to the health community that there is no need to over-interpret the "Letter", and every year the Department of Structural Reform of the Health Commission will organize the association to carry out regular research data collection activities, which is only a basic understanding of the industry situation.

Large scale, small role, private hospitals only care about expansion?

In fact, as early as the 2009 medical reform plan, private hospitals have been placed in an important position.

In the new medical reform plan, it is proposed to actively promote the development of non-public medical and health institutions, form a medical system with diversified investment entities and diversified investment methods, moderately reduce the proportion of public medical institutions, and form a pattern in which public hospitals and non-public hospitals promote each other and develop together.

Since then, by 2015, the number of private hospitals has surpassed that of public hospitals for the first time.

In the report "Number of National Medical and Health Institutions at the End of November 2021" released by the Health Commission, it can be seen that as of the end of November 2021, there are 36,000 hospitals in the country, of which 25,000 are private hospitals, accounting for nearly 70%. Compared with the same period in 2020, the number of public hospitals decreased by 38, while the number of private hospitals increased by 1377.

However, contrary to its expansion trend, the number of patients received by private hospitals did not meet "expectations".

From January to November 2021, the total number of medical and health institutions in china was 6.05 billion, an increase of 22.4% year-on-year. Among them, public hospitals had 3.22 billion visits, an increase of 28.3% year-on-year; private hospitals had 580 million visits, an increase of 24.8% year-on-year.

Although from the data point of view, the number of patients received by private hospitals is also rising, but the increase is lower than that of public hospitals. And the absolute number of visitors is only 18% of that of public hospitals.

It is more than twice the size of public hospitals, but the number of patients received is less than 20% of the former. Patient pressure in China remains at the end of public hospitals.

Sober capital is needed: private hospitals lose an average of 5.2 million yuan

The mismatch between the size and the number of patients received reveals the contradiction in the development of private hospitals, which was once accused of "barbaric expansion". Many analysts have pointed out that the intervention of capital is one of the main drivers of the "barbaric expansion" of private hospitals.

However, in the past two years, after the news of the bankruptcy of private hospitals and the collapse of IPOs, the enthusiasm of capital has also cooled down year by year.

In 2019, China's total financing in the medical service sector was 14.43 billion yuan, and by 2020, this figure has plummeted to 5.8 billion yuan, a range of nearly 60%.

Financing is the lifeblood of the expansion and survival of private hospitals, and losing the attractiveness of capital means losing "half-life".

For example, in a recent case, on February 21 this year, the Xuzhou District People's Court in Yibin City, Sichuan Province, issued two announcements in succession. It has been ruled to accept the bankruptcy liquidation cases of Yibin Shunan Hospital Co., Ltd. and Yibin Aidi Eye Hospital Co., Ltd.

Behind these failures, without exception, they are inextricably linked to "blind scale-up".

The person in charge of a private hospital told the health community that only those private hospitals with consumption attributes have greater financing needs, and the truly comprehensive private hospitals do not need financing, nor can they take the "capitalization" route at all.

"It is easy for private hospitals such as stomatology and medical aesthetics to form standardized processes, and rapid expansion can be achieved with the help of capital," said the person in charge, "but comprehensive private hospitals pay more attention to treatment, and their core is the level of doctors, so the model cannot be copied at all."

The consequences of disorderly expansion have led to an imbalance between supply and demand.

According to the data released by the Health Commission, the total income of private hospitals in mainland China in 2020 will be 670 billion yuan, but the expenditure will be as high as 800 billion yuan. This means that private hospitals have an overall loss of more than 130 billion yuan in the year.

If the average reaches 25,000 totals, the average loss of each private hospital in 2020 will reach 5.2 million yuan.

Therefore, the closure, deregistration and reshuffle have become the most severe situation that private hospitals will face.

According to statistics, in 2019 and 2020, the number of private hospitals in the mainland reached 347 and 685 respectively.

There is no need to over-interpret

Once the "Letter" mentioned at the beginning was circulated, the share price of Aier Ophthalmology was the "most seriously injured" side.

The health community contacted company executives on the matter, but the person "did not comment" on the matter.

However, from the "Third Round of Inquiry Letter" issued by the Shenzhen Stock Exchange to Aier Ophthalmology, it can be found that the refinancing of private hospitals has indeed received attention from regulators.

However, a review of the public information of the Health Commission shows that "the state's support for social medical treatment has never changed."

Following the June 2019, the Health Commission and 10 other departments jointly issued the "Opinions on Promoting the Sustainable and Healthy Development of Social Medical Services".

In June 2020, the Law on Basic Medical Care and Health Promotion was promulgated, which clearly stipulates that the state shall take various measures to encourage and guide social forces to establish medical and health institutions in accordance with the law, and support and regulate the cooperation between medical and health institutions organized by social forces and medical and health institutions organized by the government to carry out various types of medical business, discipline construction, and talent training.

In terms of tax policies, in 2019, the VAT exemption for small and micro enterprises will be increased from 30,000 yuan per month to 100,000 yuan, and some local taxes and surcharges will be reduced for small-scale VAT taxpayers within 50%. Eligible for-profit medical institutions can enjoy the above preferential tax policies in accordance with regulations.

In terms of medical insurance, the designated medical institutions of social security such as basic medical insurance, work injury insurance, maternity insurance, and medical assistance implement dynamic management, and more qualified social medical institutions are included in the designated points, and the coverage of social medical insurance is further expanded.

The Health Commission also encourages commercial insurance institutions and social medical institutions to jointly develop diversified and personalized health insurance products to complement basic medical insurance. According to preliminary statistics, in 2019, there were 20,228 designated social hospitals in medical insurance, accounting for 96.4% of the national social hospitals.

In January 2021, the Health Commission's letter on the reply to proposal No. 3451 (Medical sports No. 517) of the Third Meeting of the 13th National Committee of the Chinese People's Political Consultative Conference mentioned that it will continue to encourage and guide banking financial institutions to increase credit support and product innovation, and actively meet the diversified financing needs of medical market entities, including for-profit medical institutions.

"No one can do a monopoly, medical institutions have consumption radius, and even the best private hospitals are limited to the scope they can cover." There is no need to over-interpret the Letter, which circulated on March 15." The aforementioned industry insider said so.

The source | the WeChat public account of the health industry

Written by | Old Zhao next door

Responsible editor| Crab Boss