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Private players offer new treatment

By Yao Jing | China Daily | Updated: 2014-04-05 11:56

"Competition will be less around ownership and more about differentiated value propositions and efficiencies," said Bruce Liu, a partner at Roland Berger who specializes in the medical sector.

Liu said the government's policy focus on the private sector doesn't mean just high-end facilities.

"The policies are especially positive for those intending to serve the mainstream population," said Liu.

Liu also cautioned that medical care is a bit different from other businesses, since it doesn't offer quick returns. "Compassion and passion beyond mere economic considerations sometimes may make the difference," he said.

The key to success for a high-end hospital lies in a clear definition of target segments, compelling value proposition for patients, commercial insurance and the physicians and staff, Liu said. Patience and perseverance in navigating the regulatory hurdles and building the brand are vital as well.

Liu estimated that China's health industry will more than triple within seven years. Opportunities abound for both high-end and mainstream segments.

Women's & Children's Hospital is also at the premium level. US-based Warburg Pincus LLC invested $100 million at the end of 2013 in Beijing-based Amcare Women's & Children's Hospital to help it expand.

Amcare, set up in 2006, owns three hospitals in Beijing and Tianjin. It is going to set up new hospitals in Shanghai, Shenzhen and Hangzhou.

"We're short of medical talent as we expand, and we hope to attract more qualified staff," said Hu Lan, chief executive officer of Amcare, during a joint interview in March.

Unlike many who are enthusiastic about the potential for private hospitals, Hu is not that optimistic. "Amcare has not encountered many hurdles at the policy level. However, it is difficult to make the private sector a core part of the country's health industry. It's not yet a completely market-oriented economy," said Hu.

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