Better standards

Tired of waiting in long lines to get your teeth treated? A bit scared of the medicine your dentist puts in your mouth? Want to get your teeth done without sacrificing your working hours?

"Come to Jiamei Dental," says Liu Jia, chairman of China's largest private dental clinic chain.

Coming after working hours is not a problem because the clinics close at 8 pm, much later than public hospitals.

Patients sit comfortably on big couches before meeting their dentists and strawberry-flavored medicine is easy to swallow.

As a rising number of Chinese become wealthy, their expectations for healthcare are also changing. While public medical facilities can take care of basic medical needs for the general population, they can barely satisfy the demands of the premium sector and that's where private hospitals and clinics fill a niche.

Jiamei's target consumers are about 30, have a college education and earn about $1,000 a month. Jiamei is not alone in China. Private dental clinics have grabbed a 30 percent share of the country's dental care market and foreign-invested dental clinics hold about 7 percent, Liu says.

Foreign investors are allowed to hold up to a 70 percent stake in joint venture hospitals in China, and in dentistry they can control up to 80 percent.

The Chinese healthcare industry possibly promises the largest market potential in the world, regardless of whether it is measured by existing facilities and consumers, or in terms of growth potential. But there are still warning signs for private investors. High costs are a major challenge. They have to endure higher costs for imported medical equipment, expatriate managers, foreign physicians and imported medication.

In order to be profitable, most private hospitals, including joint ventures, choose to specialize in certain areas and charge high rates. They are either clinics located in upscale hotels, or "hospitals within hospitals" that occupy one or two floors in a standard public hospital.

There are only a few stand-alone, independent hospitals, such as Beijing United Family Hospital and Clinics and SK Hospital Beijing. But they are much smaller than local public hospitals.

Liu says he has no plans to turn Jiamei into a full-service hospital. "Each medical practice can create an industry. If you want to build a chain business, you must be focused."

(China Daily 10/06/2008 page12)