Wholly foreign-owned hospitals are coming with "more choices".

Reporter Ding Yayi, Yang Shasha, and Ma Tong

In September this year, the Ministry of Commerce, the National Health Commission and the State Food and Drug Administration jointly issued the "Notice on Carrying out Pilot Work on Expanding Opening-up in the Medical Field", which has a very important policy - it is proposed to allow the establishment of wholly foreign-owned hospitals in Beijing, Tianjin, Shanghai, Nanjing, Suzhou, Fuzhou, Guangzhou, Shenzhen and Hainan Island, a total of 9 places (except for traditional Chinese medicine, excluding mergers and acquisitions of public hospitals). The notice sparked discussions in the domestic and foreign media about the establishment of wholly foreign-owned hospitals.

What is the difference between seeing a doctor in a foreign-invested hospital?

In early October, Ms. Zhang, 33, traveled from Wuhan to Shanghai for a gynecological examination at a foreign-invested hospital. "I made an appointment with the doctor online in advance, and the registration fee is quite high compared to other hospitals, the first registration fee is 500 yuan, and then it is 200 yuan each time." Ms. Zhang told the Global Times that the assistant doctor would take a look at her medical history, measure her blood pressure, fill in basic information, and take blood to check her hormone levels that day, and the report would be issued in about an hour and a half. During the visit, the attending doctor will personally do a B-ultrasound, see and communicate with the patient for about half an hour, and make a diagnosis according to the patient's condition. Finally, other doctors will prescribe the diagnosis and treatment plan. "The whole process took about four hours. In addition, there are people to guide the whole process, and the pace is relatively relaxed. ”

Zhuang Yiqiang, director of the management center of Guangzhou Alibi Hospital, told the Global Times that compared with public hospitals, foreign-funded hospitals often adopt more international management methods, which is not only reflected in the medical process, but also in the patient experience. In addition, the management model of foreign-funded hospitals is relatively flexible, and they can formulate their own service standards according to international practices and the needs of patients.

IHH Medical is one of the first foreign medical service providers to enter the Chinese market. Shanghai Parkway Hospital is a Sino-foreign joint venture general hospital jointly funded by IHH Medical Group, Shanghai Hongxin Medical Investment Holdings and Taikang Insurance Group. The hospital provides appointment-based medical services, independent observation beds, etc. Secondly, as a member of the IHH Healthcare Group, Parkway Healthcare is able to provide international referral services to patients. In an interview with the Global Times, Zeng Qinglian, regional CEO of IHH Medical (North Asia), said that five years ago, a Hong Kong patient suffered from unknown pain in the outer thigh for a long time after undergoing left hip replacement surgery, resulting in painkiller dependence and anxiety. Later, he contacted an orthopedic specialist through Shanghai Parkway Hospital, and the doctor found that the patient had problems with both hip joints and operated on him. The patient then returned to live in Hong Kong and was able to continue his follow-up in Hong Kong as Gleneagles Hospital Hong Kong is a member of the IHH Medical Group as Parkway Hospital Shanghai.

Which populations are served

The development of foreign-funded hospitals in China's medical service market can be traced back to 2014. In the same year, the former National Health and Family Planning Commission and the Ministry of Commerce allowed foreign investors to set up wholly foreign-owned hospitals in seven provinces and cities, including Beijing, Tianjin, Shanghai, Jiangsu, Fujian, Guangdong and Hainan, through new establishment or mergers and acquisitions. Except for investors from Hong Kong, Macao and Taiwan, other foreign investors are not allowed to set up TCM hospitals in the above-mentioned provinces (cities). But in less than a year, the policy was tightened. In March 2015, the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) issued a revised version of the Catalogue for the Guidance of Foreign Investment Industries, which included medical institutions in the restricted category. Later, in 2017, the State Council issued the Catalogue for the Guidance of Foreign Investment in Industries, which once again clarified that the participation of medical institutions is limited to joint ventures and cooperation.

The three departments jointly issued the "Notice on Carrying out Pilot Work on Expanding Opening-up in the Medical Field", which once again released a signal of relaxing foreign-funded medical services. Commenting on the recent policy changes, Tsang told the Global Times: "We welcome these policy changes and look forward to new opportunities to further enhance our capabilities to meet the changing medical needs of the Chinese market through our local teams working with local communities." According to the official website of Parkway Hospital, the "hinterland" of China's Yangtze River Delta will become a "blessed land" for high-end medical care in the future, and China's high-end foreign-funded hospitals will usher in an era of scale.

So what kind of people will the WFOE hospital mainly serve? Citing Parkway Hospital as an example, Tsang said that their main clients include residents of the Yangtze River Delta region, patients who need international standard medical services, patients who are concerned about privacy and quality of service, and patients with commercial insurance or high-end medical insurance.

Zhuang Yiqiang said that compared with domestic hospitals, foreign-funded hospitals have higher costs and are usually not covered by medical insurance, which makes their service objects mainly concentrated in high-end customer groups with international commercial medical insurance. These groups may include foreigners working in China, Chinese Americans with foreign passports working in China, and domestic white-collar workers or even gold-collar workers who are willing to pay more for better services, and these insurances usually cover a wide range of medical services, including outpatient and specialty services, but at a relatively high price. The focus of services in foreign-owned hospitals tends to be on gynaecology, obstetrics and paediatrics, and these major customer groups have special needs in these areas.

It will bring a certain "catfish effect"

Li Jinghua, an insurance broker who has long been engaged in the research of high-end medical institutions, mentioned in an interview with the Global Times that although foreign-funded hospitals mainly serve high-end customer groups, with the opening of medical resources and the improvement of people's health awareness, these hospitals have also begun to gradually enter second- and third-tier cities. China's medical resources are unevenly distributed, and first-tier cities are relatively rich in medical resources, and the entry of foreign hospitals can help alleviate this problem. At the same time, the global medical resource network of foreign-funded hospitals provides more treatment options for patients with incurable diseases.

Zhuang Yiqiang analyzed that similar to Tesla's introduction in China, which has promoted the development of the domestic electric vehicle industry, these foreign-funded hospitals that have introduced foreign advanced medical equipment and management concepts can bring a "catfish effect" and promote the improvement of industry standards.

After the policy was relaxed, there was a concern about whether the entry of foreign-funded hospitals would lead to a skew in medical resources. In this regard, Zhuang Yiqiang said that compared with more than 30,000 hospitals in the country, the market share of foreign-funded hospitals is negligible, and the impact on the overall market is limited. According to the data of the National Health Commission, the number of foreign-funded medical institutions has reached 302 as of 2021, of which 114 are foreign-funded hospitals, accounting for 37.75%; There were 188 foreign-funded clinics/outpatient departments, accounting for 62.65%. The market share and output value of foreign-funded medical institutions are very small.

"For doctors in public hospitals, they are usually more inclined to work in their original units until retirement, because the treatment and medical protection after retirement are more generous. In addition, public hospitals can provide doctors with professional title evaluation and scientific research support, which are difficult for foreign-funded hospitals to provide. Therefore, although some retired doctors may choose to work in foreign-funded hospitals, this will not have much impact on the medical workforce of public hospitals. Zhuang Yiqiang said.

In terms of selecting talents, Zeng Qinglian said, "On the one hand, we select elites from our own talent pool; On the other hand, it has attracted many excellent doctors from public hospitals to join, and more than 50% of them have deputy senior professional titles. Tsang is a Fellow of the Hong Kong Academy of Medicine (Community Medicine), a Fellow of the Hong Kong College of Community Medicine and a Fellow of the Royal Australian College of Health and Service Executives. He believes that the competition triggered by foreign-funded medical institutions will help optimize the allocation of medical and human resources, promote the continuous improvement of medical institutions to seek services, and benefit patients. In addition, under the guidance of a series of positive policies, foreign-funded hospitals are expected to cooperate with public hospitals in terms of technology and talent training to achieve resource sharing, which will help improve the quality of medical services provided by public and private hospitals to patients. ▲