Some external investors are frustrated by overly restrictive regulations for investment in mainland hospitals, according to the head of a leading Taiwanese medical group, even as Beijing continues to encourage private investment in health care.
In particular, investors from Hong Kong, Macau and Taiwan say they are struggling to open hospitals for more affluent patients, as the mainland's regulations on medical institutions are directed more at facilitating the establishment of general hospitals rather than upper-tier ones.
That's a problem facing the Taipei-based Landseed International Medical Group, which will formally open its Shanghai Landseed International Hospital on June 26.
It will be the mainland's first wholly externally funded hospital, according to its president, Dr Victor Chang.
'There are many requirements we think are unreasonable,' he said. 'For instance, if we want to purchase equipment such as a CT scanner, we must have at least three doctors to run it; but in Taiwan, we are required to have only one doctor. Another example is that, for some departments, we are required to have a minimum amount of space, but we don't need that much space.'
As a result, they aren't allowed to open some departments, such as oncology, at the Shanghai facility.
Still, the hospital plans to provide comprehensive services, including family medicine, paediatrics, plastic surgery, rehabilitation, gynaecology, obstetrics and traditional Chinese medicine, unlike most overseas-funded medical institutions that focus on providing only selected services.
'We feel the demand from high-end customers for one-stop health service in first-tier cities, such as Beijing, Shanghai and Guangzhou, is prominent,' Chang said.
In late 2010, mainland authorities announced that they were encouraging 'social investment' - referring to private and overseas funding - in the medical sector. They issued a directive allowing investors from Hong Kong and Macau to set up wholly owned hospitals in Shanghai, Fujian, Guangdong, Hainan and Chongqing , while allowing Taiwanese investors in Shanghai, Jiangsu , Fujian, Guangdong and Hainan.
'For other overseas investors, I would like to say there is huge potential in the mainland market, but you should be patient, because the process of amending these restrictive regulations will be very slow,' he said.
'I also suggest that they establish joint ventures first, in order to gain more experience and familiarise themselves with the special regulations here, as well as with officials' mainland mindset.'
External investors are currently barred from building wholly owned hospitals on the mainland.
The Landseed group has operated on the mainland since 2000, running a joint-venture hospital in Shanghai for 10 years and co-operating with about 200 hospitals across the country by providing hospital-management advice and medical staff training.