Peking University is building a new 2,400-bed hospital in Beijing which it claims will revolutionize medical care.

The new hospital - Peking University International Hospital - will employ different approaches to ownership, management, operational and patient services, Wang Yuling told China Daily yesterday. Wang is a director of the Board and the executive vice-president of Peking University International Hospital I&M Co, which is in charge of the project.

With an investment of nearly 3 billion (US$360 million), the hospital, to be built in Zhongguancun high-tech zone, is due for completion in 2007 and will provide services for the 2008 Olympic Games in Beijing, Wang said.

Currently, most of China's hospitals are State-owned and still operate under a planned economy. They have been criticized for their excessive medicine prices, low productivity and inadequate service.

The new hospital differs from most existing ones because it is a shareholding entity jointly owned by Peking University and affiliated companies.

Foreign investment is also welcome in the hospital's construction and management.

Although shares will be sold in the hospital, the facility will still be not-for-profit, Wang said. "What we earn will be reinvested in the hospital to provide high-quality medical service for more patients and to better develop Chinese medical science," Wang added.

However, some parts of the hospital, such as luxury medical services, will be open to investors who want to make a profit.

Peking University plans to work with a foreign management company to operate the hospital.

In contrast to existing hospitals, which usually give their employees a job for life, the new hospital will put their doctors and nurses on contract, Wang said. Employees will enjoy competitive remuneration for quality service.

Supported by the abundant medical resources of Peking University, the new hospital will form part of the PKU Medical brand, Wang said.

The hospital will also buy professional risk insurance for its employees to protect them from litigation.

Lawsuits have become a major headache for many doctors, most of whom are uninsured and are now starting to refuse to do high-risk operations.

Some patients who cannot afford treatment will also benefit from a special hospital fund that will cover their medical costs, Wang added.

The hospital will cover 250,000 square metres.

Chinese health authorities started reforming its medical system, especially its hospitals, in the middle of the 1990s, trying to resolve its service problems.

One important step it took was to separate hospitals into non-profit-making and profit-making ones.

Meanwhile, dozens of hospitals partially funded by foreign investors have been established with advanced foreign management ideas, bringing increasing pressure to bear on domestic health providers.

However, hospitals which are solely funded by foreigners are still forbidden in the country at present.

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