China’s Government Led Initiatives for More Private Hospitals

To ease the burden on public hospitals and provide better services, the Chinese government has already encouraged private investments in healthcare facilities. In this regard, China’s State Council is leading a nationwide effort to incentivize investments and streamline the approval process for private healthcare facilities.

Some of the measures taken so far include the following:

• The Chinese government is looking to increase the number of private hospitals, relieving the strain on resources at always overcrowded public hospitals, which sometimes creates tensions that hurt the doctor-patient relationship and impair the quality of services provided;
• Doctors working at public hospitals have been allowed to practice at private facilities as well to avoid shortages of medical professionals in the private system. In the Healthy China 2030 initiative, China set the goal of raising the number of licensed doctors to 3 per 1,000 people by 2030 from 2.31 in 2016;
• The State Council promotes the purchases of complementary private health insurance to cover deductibles, copayments, and other cost-sharing as well as filling coverage gaps. This policy enables the insured to receive some healthcare services that are very expensive and not covered by public insurance as well as going to private hospitals, which often offer higher quality of patient care.
• To provide financial incentive, Chinese residents are allowed to claim up to 2,400 yuan (renminbi) per year in income tax deductions for individual premiums paid for “qualified” private health insurance products from July 1, 2017, and
• According to a Bloomberg Business article, China will attempt to encourage venture capital and financial institutions to invest in new, small- to mid-sized healthcare businesses. Qualified private institutions will also be able to list shares and sell bonds to raise funds.

As part of the support to grow private hospitals, China’s Ministry of Finance announced on October 8, 2015 that the country would spend around $1.5 billion to subsidize private hospital reform in 2016.