China’s Rising Private Healthcare Sector: New Opportunities for Foreign Medtech Companies

Until recently, China’s hospital landscape revealed many imbalances. The public system provided 90 percent of medical services in China, compared to only 10 percent by the private sector. Patients from rural areas had to travel far to receive high-quality, life-critical surgery, which was only available in more developed coastal cities.

2015 marked a turning point in these aspects of China’s healthcare system. For the first time ever, the number of private hospitals exceeded that of public hospitals.

The importance of growth in the private healthcare sector was outlined by the Chinese government in the 13th Five-year Plan, while the latest “Hospital Construction Guidance,” issued in July 2016, encourages investment in private health centres so they can grow in scale and improve the quality of their services. This marks a fundamental change from the previous Guidance issued back in 1994, which defined private hospitals as merely “supplementary” to public healthcare.

This shift in policy direction opens up great business opportunities for foreign Medtech providers. But seizing these opportunities will require a deep understanding of the needs and purchasing models of private hospitals. Identifying the right targets within the private healthcare sector, finding the adequate access channels and allocating appropriate resources to penetrate it in width and depth will be key success factors.

For a deeper discussion about how this shift in China’s healthcare landscape could affect your business, contact our China Consulting Team manager Marshall Chen at marshallchen@fiducia-china.com.