Dive Brief:
- A pilot program was launched in China in July that will allow foreign investors to fully own hospitals in the cities of Beijing, Tianjin and Shanghai and the provinces of Jiangsu, Fujian, Guangdong and Hainan. Up to this point, investors could own up to 70% of hospitals or joint ventures.
- The Chinese government appears to be hoping that foreign investment will make it easier for its low-income residents to receive treatment at hospitals. Also, that greater efficiency and technology will be realized through the ventures.
- Healthcare spending in China is expected to hit $1 trillion in 2020. in 2013, there were 11,300 private hospitals in China, up from 3,200 in 2005, according to Deutsche Bank. The organization estimates that 8,000 more public hospitals will become private in the next decade.
Dive Insight:
Up until now, foreign investment in China's hospital system has been geared toward the nation's middle class. A 2013 article in Forbes said that early investors have been successful, proving demand and that Chinese citizens trust Western-owned medical facilities. But healthcare has not followed the same path as foreign investment in other industries thus far: China typically moves an industry out of its restricted category and then allows joint foreign investments, before gradually moving to whole ownership. Instead, up until now the sector has "limped along" largely due to how localities interpret the regulations on foreign investments.