Health Care Rises in the East
Posh Private Clinics Crop Up In China, Filling Demand For Western-Style Services
By NICHOLAS ZAMISKA
Staff Reporter of THE WALL STREET JOURNAL
August 17, 2005; Page B1
BEIJING -- A wealthy senior partner at a big law firm here says he barely blinked at spending $70,000 on an imported BMW and more than $12,000 on a gold Jaeger-LeCoultre watch.
But last year when the attorney, Mr. Zhuang, was suffering from migraine headaches, he had to brave long lines and brusque service to see a doctor at a state-run hospital. The cost? Six dollars.
Mr. Zhuang, who declined to give his first name because of concerns about notoriety, would have jumped at the chance to pay a lot more for medical care that was more convenient and more comfortable. So late last year he did: He signed up for a private health program offered by Beijing Universal Medical Assistance Co., a unit of China Healthcare Holdings of Hong Kong. Now, he pays an annual fee of $3,700 and in return gets regular checkups, appointments with private physicians and, when necessary, access to some of the country's best hospitals -- all extraordinary luxuries compared with what is available to most people in China.
Many inpatients stay in swank rooms at the private Beijing United Family Hospital.
Crowded, dingy rooms and hasty exams at state hospitals were once the only option for rich, poor and middle-class patients alike in China. But now, private health care is starting to gain a toehold here, available to those wealthy enough to afford membership programs and high fees at for-profit clinics and hospitals.
"A growing number of well-to-do Chinese want international-standard health care and are prepared to pay handsomely for it," says Roberta Lipson, chief executive of Chindex International Inc., a Bethesda, Md., company that operates two swank, immaculate hospitals, in Beijing and Shanghai, under a joint venture with the Chinese government. Chindex's Beijing United Family Hospital, which opened in 1997 to serve the expanding population of expatriates, derives more than a third of its $22 million in annual revenue from Chinese patients, Ms. Lipson says.
For the most part, private clinics and hospitals don't yet offer big-ticket procedures, such as heart surgery or cancer treatment. For these, even wealthy patients continue to rely on state hospitals. Beijing United, for example, has only 50 beds and refers candidates for brain and heart surgery to local state-run hospitals.
But when it comes to primary health care, the state hospitals can't compete with private providers for wealthy patients. "The basic medical services cannot satisfy the needs of the rich people," says Steve Chen, a 35-year-old Beijing lawyer who says he earned about $250,000 last year. He recently signed up for a Beijing Universal Medical Assistance program offering him and his family primary medical care at an annual cost of around $12,400.
RELATED ARTICLE
• More Chinese Treat Their Aches and Pains at Drugstores1
"The demand is there," says Robert W. Pollard, director in China for the health-care arm of Synovate, a global market-research firm.
China's health-care system once was a standout in a sea of communist failures, delivering basic, near-universal care. But today, its state-run hospitals are ill-equipped to deliver the kind of private, convenient primary care that patients in the West take for granted.
On a recent afternoon at Peking Union Medical College Hospital, one of Beijing's best-known state hospitals, hundreds of people waited in a tangle of long lines, maneuvering around a woman lying motionless on a stretcher on the floor. A sign on a wall listed prices: one yuan (12 cents) to see a regular doctor, 10 yuan for a specialist.
Appointments at state hospitals are rare. It isn't uncommon for wealthy patients to have assistants or drivers camp out overnight for a good spot in line.
In contrast, Mr. Zhuang recently headed to a medical appointment at a posh Beijing clinic outfitted with faux French paintings, a giant flat-screen TV set and a miniature waterfall. "I need to stay healthy to make more money," he says. At such high-end facilities, patients sometimes pay with bags of cash.
The view outside the private Beijing United Family Hospital.
For Western companies, the barriers to entering the Chinese health-care market are considerable. Foreign investors may own as much as a 70% stake in a Chinese hospital, but they have to navigate a maze of regulatory obstacles before breaking ground on a new facility. Only 11% of China's 12,902 general hospitals are run for profit, and the vast majority of these operate under government-imposed price caps with local Chinese owners and without foreign investment.
But as Beijing relaxes investment restrictions, opportunities for private providers could multiply. Total health-care expenditures in China exceeded $80 billion in 2003, according to the Ministry of Health. Out-of-pocket payments by individuals are a growing portion.
Cindy He, a 34-year-old manager at the Beijing office of a U.S. company she declined to name, is a client of China's new high-end providers. She came of age in the aftermath of the Cultural Revolution in Xi'an, where her mother worked in state-run factories. Now, Ms. He reads Vogue and spends $100 for a perm.
She recalls the time she got a fish bone stuck in her throat and paid a doctor at a state hospital a little more than a dollar to get it out. Two years ago, when she found tiny spots along her jaw line, she had to wait all morning to see a doctor -- only to discover, upon entering the examination room, that the session would take place in front of other patients.
So Ms. He decided to try Beijing United Family Hospital, even though the cost of a doctor's visit would be more than 50 times that at a state-run hospital. "It's not just that I can afford it," Ms. He says. "There's something intangible. It's a bit about the status." On a recent dentist visit at the hospital, she bumped into a Chinese pop star.
Suning Fang is married to an investment banker at Goldman Sachs Group and pays $18,000 a year to send her 5-year-old son, Wesley, to kindergarten. She recently took him to a private hospital to be circumcised and have his tonsils removed. The bill came to more than $7,000 -- a significant sum, even for someone of her means. She paid with a credit card.
But when she discovered a lump in her breast and required surgery, she checked into a state hospital. "It's fine for me," Ms. Fang says. "But for my son, no way. I don't care how much it costs."
online.wsj.com |
