Health Insurer to Offer
Chinese Broader Coverage
By ANDREW BROWNE
October 17, 2006; Page A8
BEIJING -- A U.S. health-care company says it has won approval to offer Chinese citizens a comprehensive medical-insurance package -- the first of its kind in China.
The move represents a breakthrough in a country where two-thirds of the population has no health insurance, and where existing private health-care policies offered by companies like American International Group are so limited that even those insured can sometimes face crippling out-of-pocket expenses.
Chindex International Inc., a Nasdaq-listed company that runs the United Family Hospitals and Clinics network in Beijing and Shanghai, will offer the package through a Chinese state-run insurance broker, according to its president and chief executive, Roberta Lipson.
It is believed to be the first so-called preferred-provider organization health-insurance plan in China. Under the plan, participants are covered for treatment of all kinds in the United Family facilities, as well as hospitals throughout China and overseas, Ms. Lipson told a news conference. The annual premium for an individual is $3,000 and the maximum deductible -- the amount those insured must pay themselves before insurance kicks in -- is $1,000.
The United Family network has become popular with expatriates in China by offering high-quality care, including foreign-trained doctors.
Mainland Chinese patients, who Ms. Lipson said constitute around 40% of the total patients, can't at present find domestic insurance policies to cover their visits and must pay cash in full. Foreign patients typically are covered under international insurance plans.
The new program will allow foreign and Chinese employers in China to offer the same health-care benefits to all their employees, both local and expatriate. "It levels the playing field," Ms. Lipson said.
Although it is priced far beyond the reach of most mainland Chinese, it represents a new insurance model that could help to reshape a health-care system in China that is in crisis as a result of years of government neglect, mismanagement and corruption.
Gaining regulatory approval for the program will potentially help Chindex expand in China. As a start, Ms. Lipson said the company plans to open two hospitals -- one in Beijing and another in the southern city of Guangzhou. A larger network will help the company reduce costs and allow it to cut charges for its patients and reduce the insurance premiums, she said.
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