Evening October 14, 2013, one of the major news channel CCTV 13 had longest discussion on a globalfocusing topic:New Health service policy-To promote health service industry development, which recently hasbeen announced by State Council of China. Various parties involved to the discussion, including Chinese public,researchers, and professional economist. It was deemed to be the top concerns of Chinese public in recent years.
About the Policy, the purpose of the new policy focusing on two aspects, one is Chinese public health servicesand the other aspect is China economic development. Basically, as the biggest reform to medical industry since 2009, thepolicy has several elements of tasks to be fulfilled to meet the policy purpose. They are:
Ø Complete open medical service market. To simplified application procedures and approvals; Encouraging both privateand foreigner investors to enter to Health service market, including to setup private owned hospitals, to establisholder people care center, children care center and all other such related services which are extremely lacking inChina.
Ø Encourage and lead investors to explore more investment strategies.
Ø Strengthen support policies through state financing and land using policies. State finance bureaus will provide a seriesof fund supporting programs to medical service providers.
Ø Providing preferable tax policy and pricing policy. The Hi-tech company polices will be applicable to medicalservice industries from now on. To cancel the pricing control regulation on private owned medical servicecompanies, instead of pricing control regulation, private owned medical services companies are applying tomarket pricing regulation. Private owned and state owned hospitals will have the equal price for water,power, gas and related facilities.
Ø Guide rational consumptions.
Ø Emphasized on industrial law, regulations, and supervision.
Ø Construct healthy life culture.
What Chinese public says to the new medical services policy?
Ø More private owned hospitals for public to choose
Ø More choices for expert doctors to compete positions, equal recruitment policy between stat owned and private ownedhospitals in the industry.
What is health service industry?
The reason for develop heath service industry.
Ø 1/3 of disease can be avoid by prevention.
Ø 1/3 of disease can be controlled by early discover.
Ø 1/3 of disease treatment effective can be improved by communication
Comparison total health expense per GDP between USA and China.
In 2011, total health expense equal to 17.7% of GDP in USA, other OECD countries are 10% of GDP,China only has total expense of 5.5% equal to GDP in 2011. China currently has total health expenseequal to 2.43 trillion RMB. Target 8 trillion RMG in2020. Thus, China health is an inconceivablepotential growing industry.
Benefit package to private owned hospitals:
Equal requirements between private owned hospitals and state owned hospitals
Market research display:
Ø 48% respondents believe health check fee is too expensive. 15% hospital services are bad. 30% replied too manypeople in hospital, long time waiting and avoid go to hospital for small disease.
Ø Researchers find that 60% of Chinese public don’t visit private owned hospitals. As they don’t trust doctorstechnical of private hospitals, and some mentioned not allowed for reimbursement before new policies.
Ø Private hospital owner commented: with equal competition polices, we save cost from tax and facilities, thenwe can improve our services qualities to attractive more customers.
Ø Dean of Xiangya Boai hospital commented: with new medical services policy, we can save 800k RMB each year.We can use savings to increase staff salary and attractive more experts.
Ø Dean of Beijing Sanbo hospital commented: under new medical policy, we can save 4m RMB each year frompreferred tax policy. We can use this amount of savings for improve hospital environment.
Ø YangShu, a industrial analyst stated that we now opening a large market with huge shortage of medical services forboth basic health services needs and high level health care services needs.
Ø Professionals commented that health services industry is an essential market following IT industry.
Eden Hall Global Capital Co., Ltd.