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High-priced healthcare
By Andrew Moody and Ding Qingfen (China Daily)
Updated: 2009-12-07 07:50

Since then, there has been a wave of foreign hospital investments in China. By 2008, an estimated 300 proposals for the establishment of hospitals in China had been approved by the Ministry of Health.

One company on the expansion trail is Parkway Health, a Singapore-based hospital group.

It opened the Gleneagles International Medical Center in Shanghai and is now looking to expand to Beijing and Guangzhou.

Jeffrey Staples, the company's CEO, said the group had ambitious plans.

"We will put in place the investment so that we can open a number of new facilities in 2010," Staples said.

All eyes now are on the details of the Chinese government's proposed healthcare reforms, which are still being finalized.

Many in the private sector hope they will allow Chinese people to obtain reimbursement for at least part of the cost of their medical treatment at private, as well as public hospitals.

Anna Zhao, an expert in the healthcare sector for UK Trade and Investment at the British Embassy in Beijing, said she believes such a move could be a key stage in the development of foreign hospitals in China.

Policy questions

"Everything really depends on the new strategy, and we are awaiting what the policy will be," she said.

"If the government opens the door to private providers, it wants them to be complementary to the current system, rather than competing," Zhao added.

Another major issue is the lack of private medical insurance in China. Foreigners who buy private healthcare in China typically utilize the private medical policies they have in their home country, which offer worldwide coverage for an extra premium.

The US-based insurance holding company American International Group Inc (AIG) entered the China market in 2005.

However, private medical insurance is relatively undeveloped in the country, and Chinese consumers typically find it too expensive.

"Without access to private medical insurance, it becomes a bit of a decision each time when it comes to accessing private medical care at a foreign hospital since you are having to pay cash rather than rely on your policy covering you," said Lipson, who is CEO of Chindex International, which runs Beijing United Family Hospital.

Yang Shichun, vice president of American Pacific Medical Group, a leading US medical services provider that owns 10 medical health facilities in China, said many foreign companies are playing a waiting game, wondering whether to enter the market.

"Actually, many big names have not entered China. They are observing," he said.

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Yang said it is still far from straightforward to operate in China, citing the requirement that foreign companies find Chinese partners before opening for business.

A major problem is that the fees foreign hospitals charge often price Chinese consumers out of the market, he added.

"We have fantastic equipment and facilities, but the high fees are not always acceptable," Yang said.

Xu, the Beijing mother who gave birth to Qi Qi at Beijing United Family Hospital two years ago, said she is convinced it was worth paying the high cost.

"It was the level of personal attention you got that impressed me. We were able to discuss my living and eating habits. I liked to stay up late and drink coffee. The doctor said I could do that if I gave up Coca-Cola. In the State system, it would have been a straight no," she said.

"My husband was also allowed to be with me during delivery, which is not possible at a lot of public hospitals," Xu said.

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