Chinese Private Hospitals to Receive Benefit from Regulatory Relief

Published Date : Dec 04, 2015

With China relaxing its bureaucratic procedures for hospitals that apply for basic medical social insurance, private hospitals will be the biggest beneficiary for a surge in outpatients, as stated by analysts.

Recently, a batch of local governments have slashed the administrative approval process that is required by medical institutions that are applying for basic medical social insurance (BMSI), which includes Lanzhou and Shaanxi province. Earlier in mid-October, Beijing had issued an order that stated to relax the bureaucratic procedures that are needed to seek the insurance be relaxed, which has led to the move come in place.

The move is one that have been launched in China in a series of supportive policies, in order to boost the private hospital sector and to reduce the burden on the public health care system, as stated by analysts from Fitch Ratings in a report.

For year, In China, the public hospitals have been overwhelmed with demand, as patients refrain from going to private hospitals. This is because, currently, most of the private hospitals are not covered under the government medical insurance programme in China.

On the contrary, outpatients at public hospitals are required to pay only a token amount with cash for prescription drugs. Earlier in June, the State Council stated that it will encourage investment from private parties in the hospital sector in the form of tax-favored treatment, which will streamline the approval process that is required to establish an hospital, thereby, allowing private parties to have access to diversified funding sources and to cut red tape that will encourage the flow of talents freely among the various medical agencies.

As per the latest relaxation of the BMSI, which is not bound by any deadline for implementation, however, it is a good start to enhance the competitiveness of private hospitals.