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BIZCHINA / Medicine |
Siemens to explore healthcare marketBy ()
Updated: 2007-06-25 11:20 Three years ago, South Korean business conglomerate SK Group made a stir in China's medical care market by opening the first comprehensive joint venture hospital in Beijing. Another Fortune 500 company, Siemens, is now taking a similar bold move in what could potentially be the world's largest healthcare market. The German conglomerate will build a 1.5-billion-yuan comprehensive hospital in Shanghai. The 1,000-bed hospital, due to start operation before the World Expo 2010, will be 40 percent owned by Siemens and 46 percent owned by Tongji University, a prestigious university in Shanghai. Hospital operator Asklepios Kliniken will hold the remaining shares. The hospital, in which 30 percent of the physicians will be expatriates, will mainly target foreigners in Shanghai. Affluent local Chinese with an annual income of over 300,000 yuan are also potential clients. The Chinese government allowed no more than 30 percent of foreign investment in hospitals in 1997. But the investment cap was raised in 2000 when foreign investors were permitted to control a maximum of 70 percent of a joint venture hospital. For many Chinese, a visit to public hospitals can be an overwhelming experience due to the huge crowds and little privacy. Yet affluent Chinese patients are demanding premium services and the existing medical facilities at public hospitals can hardly fully satisfy that demand. That is where joint venture hospitals come in. While China looks like a potentially big market for international-level healthcare, there are also warning signs for healthcare investors, analysts say. The high cost is the major challenge. Joint venture hospitals have to absorb higher costs for imported medical equipment, expatriate managers and physicians, and imported medicine. That could explain why most joint ventures in the country are either clinics or adopt a "hospital within hospital" model, occupying one or two floors in a Chinese hospital. The size of the few stand-alone independent hospitals is much smaller than Chinese public hospitals. Most joint venture hospitals are specialized in some field instead of providing full services. (For more biz stories, please visit Industry Updates)
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