Grace Palma, CEO of China Med Device [Image from LinkedIn]
The public healthcare system in China is getting overcrowded. Medical resources are getting stretched thin and this is particularly evident in level III public hospitals. The government, aware of the challenges, has opened up the healthcare system to private investments as outlined in its 13th five-year plan. At the same time, the Chinese government encourages physicians to practice at multiple facilities.
In the statistical comparison of public and private hospitals in China below from the National Health and Family Planning Commission published in 2017, the compound annual growth rate (CAGR) of public hospitals has been flat over the last 7 years while the private hospital CAGR has been 16%. The number of private hospital beds has experienced a CAGR of 31% compared to 6% for the number of beds in public institutions. Market research firm Frost & Sullivan estimated that the revenue from China’s private hospitals will triple to $90 billion by 2019 from 2016 levels.
[Image from China Med Device]
Despite the rapid growth of private hospitals, only about 10% of services are provided by the private facilities. Level III hospitals are still very crowded, especially for more serious diseases or major surgeries. For instance, on Feb 27, Beijing Cancer Hospital received 2,927 outpatients by 4 p.m., which is past its daily capacity and had to turn down any additional patient. The general private hospitals are more functioning like small community hospitals. They tend to provide more routine care.
The Chinese middle and upper classes have seen their income rise significantly as well as their expectations in medical care. In 2015 alone, Chinese citizens spent $10 billion in overseas medical care. China’s outbound medical tourism has grown at a rate of 500% over three years. This exponential growth is encouraging the development and construction of hospitals equipped with the latest technologies. The growth is fueling the construction of top-end specialty and general private medical facilities in China. These two types of hospitals are equipped with the latest technologies, comparable to their US or European counterparts. They hire top physicians from the public level III hospitals and oversea physicians to provide the care.
Hospital groups from the U.K., U.S. and Singapore have already heavily invested in the private healthcare space in China. On Feb. 2, representatives from International Hospitals Group, led by British Prime Minister Theresa May, signed a contract with Keyi Real Estate for an international hospital in Hangzhou, eastern China. The total investment will be $133.7 million.
China Med Device provides turn-key solutions for western medical device/IVD companies to enter China with regulation and commercialization services. It has offices in Beijing, Suzhou and Boston.
The opinions expressed in this blog post are the author’s only and do not necessarily reflect those of MedicalDesignandOutsourcing.com or its employees.
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