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Talk of the Day -- Cool response to China's medical care opening

Talk of the Day -- Cool response to China's medical care opening

China announced Friday that healthcare service providers from Taiwan, Hong Kong and Macau will be able to operate fully-owned hospitals in all of its 333 provincial cities. Investors from Taiwan were originally restricted to running fully owned hospitals in four Chinese provinces -- Jiangsu, Fujian, Guangdong and Hunan -- as well as in the special municipality of Shanghai. The new market-opening measure, however, has been met with a lukewarm response from Taiwan's healthcare community. Medical sources said that unless manpower recruitment and health insurance coverage issues can be resolved, the new opening policy is not likely to attract further Taiwanese investment in China's hospitals. The following are excerpts from a special report in the Saturday edition of the United Daily News on the painful reality of Taiwanese investment in the Chinese hospital sector: Taiwan's Landseed International Medical Group was the first to get the green light for a fully owned hospital in Shanghai after such investment was allowed under the Cross-Taiwan Strait Economic Cooperation Framework Agreement in 2011.
Landseed International Hospital Shanghai is also the largest fully foreign-owned general hospital in China. Superintendent Chang Huan-chen said Landseed managed to roughly break even last year. "But there is still a long way to go before we can earn back our initial investment," Chang said.
Landseed Shanghai now has 100 beds, 30 full-time physicians and 30 part-time practitioners. Chinese patients made about 150,000 visits to the hospital last year, Chang said. Due to high investment costs and low returns, Landseed is still the only Taiwanese conglomerate that has set up a fully owned hospital in China since 2011, he said. According to him, China's new opening of the industry will have a limited effect on attracting Taiwanese medical groups to follow suit because of the various hurdles. First of all, Taiwan- and foreign-owned hospitals in China have a hard time recruiting medical practitioners.
Chinese medical doctors tend to prefer working at China's public hospitals over private ones. Under China's current system, physicians' evaluations and promotions are based solely on performances at public hospitals, while service records at private hospitals are overlooked. As a result, few qualified Chinese physicians are interesting in work at foreign-owned institutions. The fact that Taiwan and China do not mutually recognize each other's medical certifications also makes it difficult for Taiwanese hospitals in China to hire full-time physicians from Taiwan. Furthermore, China does not yet allow its people to seek medical services at foreign hospitals -- including Taiwan-invested ones -- in all fields, effectively discouraging Chinese citizens from visiting foreign-owned hospitals. "China must take steps to remove these barriers if it truly wants to liberalize foreign investment in the hospital sector and speed up its healthcare reforms," Chang said.
Hung Tzu-jen, general manager of Shin Kong Medical Group, shared Chang's view, saying that few large Taiwanese healthcare groups would invest in China's hospital sector untill bold steps are made to improve the medical investment climate. "At the moment, operating hospitals in China can hardly be profitable. Besides manpower recruitment difficulties, many existing Chinese regulations make it hard for foreign hospital operators to earn any profits," Hung said. (Jan. 11, 2014).
Economic Daily News: Cheng Cheng-chieh, a former deputy superintendent of BenQ Medical Center in Nanjing in Jiangsu Province, which was established by Taiwan's BenQ-AUO Group and Chinese joint-venture partners in 2008, said skilled Chinese physicians prefer China's public hospitals. "Private hospitals can only hire retired Chinese physicians in their 60s or 70s or newly graduated ones. Worse yet, it is equally difficult to recruit qualified nurses," Cheng said.
Without famous physicians on their rosters, private hospitals, including wholly or partially Taiwan-owned medical institutions, often have hard time attracting Chinese patients, he added. (Jan. 11, 2014). (By Sofia Wu)