China will ease curbs on foreign investment in joint-venture hospitals, its government said yesterday, as it deepens a sweeping overhaul of the national healthcare system aimed at cutting costs and sprucing up overloaded public services.
China is an appealing market for pharmaceutical firms and manufacturers of medical equipment, with spending in the industry expected to nearly triple to US$1 trillion by 2020 from US$357 billion in 2011, consulting firm McKinsey & Co Inc said.
In a healthcare reform plan for this year published on its Web site, the Chinese State Council — the country’s Cabinet — said it aims to relax limits on foreign investment in hospitals across the country.
Photo: Reuters
The plan involves overhauling the management of medical joint ventures that involve overseas partners, including “reducing restrictions on the percentage of foreign ownership in medical JVs [joint ventures] and collaborations,” the council said in a statement.
The move would increase the number of cities where investors from Taiwan, Hong Kong and Macau can set up wholly-owned medical institutions, as well as allow overseas investors to set up wholly-owned hospitals in designated areas, such as the Shanghai free-trade zone.
The statement gave no details of the timeframe of the easing or of the changes in holdings.
The ambitious overhaul also aims to bolster insurance coverage and crack down on graft, key areas for Chinese President Xi Jinping (習近平), who is looking to improve access and cut healthcare costs for the country’s nearly 1.4 billion people.
Since 2009, Beijing has spent 3 trillion yuan (US$480 billion) on healthcare reform, but the system still struggles with a scarcity of doctors, attacks by patients on medical staff and a fragmented drug distribution and retail market.
Beijing will tighten up on drug distribution by clamping down on fake drugs, kickbacks to doctors and illegal sales tactics, the government said in the statement.
The authorities have intensified a crackdown on graft and high prices in the country’s healthcare sector, with executives at British drugmaker GlaxoSmithKline PLC charged with corruption earlier this month.
Authorities will also aim to bolster drug price monitoring and transparency, as well as toughening price supervision of imported drugs and medical equipment, the council said.
The government said new policies would increase prices for medical services, such as surgery, while lowering drug prices by reducing mark-ups and through a government-run medicine procurement scheme focused on lowering costs.
China’s underfunded network of 13,500 public hospitals relies heavily on drug sales, contributing to inflated prices, kickbacks and tension between patients and doctors.
About 40 percent of public hospital revenue in 2011 came from prescribing drugs, Chinese Ministry of Health data show, while medical services contributed slightly more than half, with state subsidies and other income making up the rest.
Health authorities are also to extend to the whole country a special insurance system to help battle major illnesses.
Many people complain that serious illnesses can bankrupt households under the current system, where patients often have to pay much of the cost out of pocket.
Beijing also plans boost subsidies for basic medical coverage by 14 percent to 320 yuan per person annually, the Chinese Ministry of Finance said on Tuesday.
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