HONG KONG: Doctors and medical service providers in this special administrative region (SAR) may soon be able to run wholly owned clinics and hospitals on the mainland, a source said.

The Chinese mainland and Hong Kong will sign an annexe to the Closer Economic Partnership Arrangement (CEPA) this summer, which will give the green light to Hong Kong service providers to set up the clinics, a source familiar with the CEPA said.

That will mark a big opening of the mainland's medical market, and Hong Kong doctors will be the immediate beneficiaries.

The licensees will have to be permanent residents of Hong Kong and be recognized by the local hospital authority. They will also need to have had a medical license for over five years and they must pass a qualification tests.

Qualified Hong Kong medical workers are allowed to run self-owned or joint-venture clinics, hospitals and medical centers.

Allowing Hong Kong healthcare companies to operate freely on the mainland is expected to improve the quality of local services. File photo

Currently, overseas investors are allowed to run joint venture hospitals on the mainland, and the mainland partner must hold no less than a 30 percent stake.

The central government is now hoping to bring Hong Kong's quality medical services to the mainland, especially to community clinics that lag behind in services and facilities, the source said.

The government will not interfere when it comes to prices and locations, but doctors are encouraged to head to western region.

Hospitals and clinics to open in western China will enjoy favorable tax policies and lower investment and property costs.

Banking on the country's massive population and fast-growing economy, overseas medical groups started tapping the mainland market as early as the late 1980s.

By the end of 2006, over 100 overseas medical institutions had set up joint ventures with their local counterparts, and Hong Kong institutions accounted for over 30 percent.

Since the agreement was first introduced in 2003, more than 100 medical professionals in Hong Kong have written the CEPA qualification test and roughly 60 have passed.

Mainland consumers have welcomed overseas medical groups, arguing that overseas groups create competition with local firms and therefore boost the healthcare market.

A survey conducted by a market-consulting firm that interviewed over 500 middle-class mainlanders found that 86 percent of respondents think the current healthcare system is unsatisfactory, while 54 percent said they would turn to overseas medical service providers.

Respondents of the survey, which covered Beijing, Shanghai, Guangzhou, and Chengdu, indicated that Hong Kong clinics would only benefit mainland's upper classes who can afford the high charges of overseas-educated doctors.

"Patrons of Hong Kong or foreign doctors are mostly celebrities, rich businessmen, Hong Kong and Macao investors and expatriates who live on the mainland," the report said.

Nevertheless, overseas-funded hospitals will bring a better quality of services and create competition among medical groups, it said.

(China Daily 06/15/2007 page13)