On my latest visit to China, it was clear that healthcare spending is rapidly increasing. In fact, Persistence Market Research found that China is going to be one of the private healthcare markets to show the most growth in the world over the next five years, creating an ideal situation for joint ventures in China.
To get even more specific, experts are predicting the healthcare industry in China will reach an impressive one trillion dollars by 2020—and the private segment of the healthcare sector is expected to be accountable for 20% of that figure.
While an increase in average income and a higher occurrence of chronic diseases certainly play a role in the accelerated growth, the recent surge of the private healthcare market can be mainly attributed to healthcare reform and revised government policies.
One of the main emphases of the Chinese healthcare reform is to develop the infrastructure of the hospital system. A key part of this is introducing several measures that will entice healthcare investors to pursue joint ventures in China. This includes providing more opportunities for private hospitals to be built and increasing the amount of hospital beds at private facilities.
Currently, China’s government insurance offers no coverage at foreign hospitals, making it extremely challenging for residents to afford care at those facilities. Going forward, the government insurance is expected to expand their coverage to include private hospitals, allowing more people to use them for their healthcare needs.
Revised Government Policies
In addition to the measures enacted in the healthcare reform, it is anticipated that the Chinese government will ease up on many of the government policies that have been restricting the growth of the private healthcare market:
- Streamlining the Process for Foreign Physicians – As it stands now, if a physician wants to work in China, they have to pass the country’s medical test, which includes a two-hour written exam and a 20-minute oral presentation about a hypothetic treatment plan for a sample patient. Richard Saint Syr, M.D., a practicing US doctor in China, states that it is not rare to fail the test, and there is a year waiting period to try again. However, as Deloitte reports, the government is working on simplifying the process in order to encourage private healthcare growth and boost joint ventures in China.
- Improving the Importation of Medical Devices – The Chinese government currently requires strict testing and additional clinical trials for many of the high-end medical devices that are seeking importation into China. To help more of these devices get approved for use in China, Deloitte explains that the government is expected to make the approval process for bringing in this equipment much easier and quicker.
With the anticipated growth of the private healthcare sector, there has never been a better time to pursue joint ventures in China. For more information, contact Pacific Century Ventures today.