Controversy brews over foreign-owned hospitals

The United Family Hospitals & Clinics - a US-China healthcare joint venture, made 2 billion yuan ($294 million) in profits in 2008.(Xinhua Photo)
Foreign ventures are said to have been given the green light to further enter into China's vast medical market by establishing solely owned foreign hospitals - a move that has stirred hot debate about the nation's ongoing medical reforms.

China's medical authorities have roughly reached a consensus to allow solely invested foreign medical organizations into the country, China Business News reported Tuesday, quoting "authoritative" but unnamed sources.

Meanwhile, the Ministry of Health did not directly respond to the report Tuesday, but the possibility of further change on the limits seem to remain.

Such a reform is regarded as a first "pragmatic step" after the Chinese government announced in February that it would encourage "social funds" to enter into various medical fields. According to an ambitious medical-reform plan publicized in 2009, the State Council vowed to invest 85 billion yuan ($13 billion) into the health and medical sector by 2012.

According to a report issued by the Ministry of Health in 2000, the upper limit of foreign funds is 70 percent of the total investment in Chinese medical institutions.

The 19 joint-venture hospitals in Shanghai, such as the United Family Hospitals & Clinics - a US-China healthcare joint venture, made 2 billion yuan ($294 million) in profits in 2008, according to Outlook Weekly, a journal run by the Xinhua News Agency.

Li Ling, a professor specializing in medical reform at Peking University, illustrated how these hospitals bring in huge profits.

"These foreign-invested medical institutions supplement the high-end health need in our society," he said.

Li also told the Global Times that regulations on joint-venture hospitals are important to keep patients safe. "Only those foreign hospitals that have high standard professional skills are permitted to invest in China. Start-up hospitals, which dream of digging for gold here, are not welcome."

Pan Zhongying, president of United Family Hospitals & Clinics, said her hospital mainly targets foreigners living in China, but anticipates more Chinese patients if the Chinese market opens to foreign solely funded hospitals.

"The biggest problem I meet here is the language barrier," said Virginie Mangin, a French journalist in Beijing. "I don't think the quality or the environment of foreign hospitals is better than Chinese ones, but the doctors can speak English. I think that's why they are three times as expensive as in France."

Peter Davis, an American who has gone to both Chinese hospitals and joint-venture hospitals during his seven years in China, said, "It's good to know there is another option for medical care that doesn't mean being 'treated' with placebo drips in crowded, unsanitary conditions that resemble bus or train stations rather than hospitals."

He Jingbin, with International SOS in Beijing, told the Global Times that the opening of the Chinese health market to foreign hospitals will help accelerate healthcare reform, but he doesn't think foreign hospitals will shake the dominant position of State-owned hospitals in the short term.

"Foreign hospitals need to be audited by China's social security
authorities and align their pricing with that of Chinese ones. But their profit-making nature makes it difficult for them to lower their service rates," He said.

Song Shengxia contributed to this story

By Liu Linlin, Global Times