Opportunities for the Chinese Private Healthcare Market in China

Racepoint Global

Recently China has seen high-end health services rise rapidly, including private premium health and medical tourism. Although China’s public hospitals still receive more than 88% of patients, the proportion of those
opting to use private hospitals has increased from 17.2% in 2005 to 42.2% in 20121.

The State Council of the People’s Republic of China predicted that by 2020 the total scale of health services industry in China would be well over $8 Trillion2. A powerful signal that has been officially sent by the government to market
investors and industries practitioners.

China is the world’s second largest economy and most populated country. The 2015 China Private Wealth Report highlighted that the size of the Chinese high net worth population (with investment assets of more than 10
million RMB) is expanding quickly. In 2014, those high net worth individuals exceeded 1 million, with a majority of these individuals in provinces such as Guangdong, Shanghai, Beijing, Jiangsu, Zhejiang, Shandong and Sichuan3.

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There is a favorable political environment in China for the ongoing development of private premium health services. Since 2009 the Chinese government has released over 16 documents to encourage the social capital to penetrate
the healthcare industry in order to meet the demand across all levels. Premium  health services are even included in the Outline for the Planning of the National Medical and Health Service System (2015-2020)3. What is more, Sino-foreign joint venture and cooperative medical institutions are gaining more and more popular in China. For example United Family Healthcare runs more than five hospitals and clinics in China. According to the report of Healthcare of Chinese HNWIs 2016 by Hurun Report, 37% of high net individuals are willing to receive medical service overseas [4]. Medical tourism agencies are emerging in first tier cities and an increasing number of oversea hospitals started setting up their referral office in China.

Driven by favorable policies and capital investments, the healthcare market in China has huge potential
and it is the right time to do something.

Levin Ai | 艾云飞

Account
Coordinator, Shanghai

References:

1.
National Health and Family Planning Commission of PRC.
2013 China health statistics yearbook. 2013.

2.
The State Council of the
People’s Republic of China. Several Opinions of the State
Council on Promoting the Development of the Health Industry 2013 [Available
from: http://www.gov.cn/zwgk/2013-10/14/content_2506399.htm.

3.
Bain & Company in collaboration with China Merchants Bank. China
Private Wealth Report 2015.

4.
General Office of the State Council. Notice of the
General Office of the State Council on Issuing the Outline for the Planning of
the National Medical and Health Service System (2015-2020) Beijing; 2015
[Available from: http://www.gov.cn/zhengce/content/2015-03/30/content_9560.htm.

5.
Hurun Report . Healthcare of Chinese HNWIs 2014. 2014.

Image Source: http://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/health-care-in-china-entering-uncharted-waters