Private hospitals to improve China's healthcare system

Reporter Song Wenjing of the International Channel Shanghai has been speaking to one healthcare expert, who says more needs to be done before hospitals can really offer comprehensive medical resources to patients.

Ma Jin is a city legislator and a researcher at Jiaotong University's medical school. He says the real beneficiaries from more private investment would be non-profit, non-public medical organizations, especially the ones with high-end medical services. That's because for-profit private hospitals already have separate pricing systems registered with the local price bureau. But is relaxing price controls the key to getting more capital into the healthcare sector? Ma says no.

"Non-profit private medical organizations do enjoy tax exemptions, but shareholders are not allowed to get bonuses. They also have limitations on personnel expenditures, and financial disclosure is required. Neither the current medical service system nor the insurance system is led by the private sector. That's the real problem that hinders private capital from entering the healthcare sector." Ma said.

Ma says for now, non-profit, private medical organizations account for less than 10 percent of the city's overall medical facilities. Most are psychiatric rehabilitation centers and nursing homes for seniors.

But Ma says attract more social capital to VIP services in non-profit private medical facilities would be a good way to expand the supply of basic medical services, because the organizations are likely to use the money from their so-called VIP services to subsidize their basic medical care.

"While the government is easing more restrictions on the market, its supervisory role is still important, to prevent service fraud, price fraud or monopolies. It also requires the government to further improve public medical facilities, as a way of stabilizing the prices." Ma said.

Ma says another challenge involves doctors. In western countries, hospitals with the best medical services are often privately owned. But in China, private hospitals often have difficulty finding and hiring good doctors. The best doctors in China work for public hospitals, which provide them with a stable job and the best medical facilities.