A city that pioneered health-care reform by privatising all its public hospitals 11 years ago has decided to open a large public hospital to cope with a 'shortage of quality medical services'. Suqian, in Jiangsu, set an unprecedented example when it started selling its state-owned hospitals to privately run clinics in 2000 and then sold its largest hospital to a private medical group in 2003. The move was warmly received by doctors and academics at the time. Statistics showed that Suqian's medical sector assets totalled more than 4 billion yuan (HK$4.9 billion) last year, up 750 per cent on 1999, the year before it introduced the privatisation push and became an icon of mainland healthcare reform. But now, the city has said it will build a large public hospital because of demand from residents. The director of its public health bureau, Ge Zhijian , said that while the supply of medical services had been inadequate before 2000, the problem now was medical care of insufficient quality. Ge said the new hospital would be a modern class 3A hospital- the top classification on the mainland - with integrated teaching, research and medical services that would help train staff for county- and township-level hospitals. But the announcement has raised concerns among private hospital operators in the city. 'Could it be that the Suqian government is having second thoughts about its reform and might buy back the private hospitals?' the unidentified chairman of one private, county-level hospital told the People's Daily. Another private hospital chairman said: 'The competition has been hot. Every hospital has borrowed a lot of money to buy advanced equipment. Our equipment and technology will look outdated and the investment will go down the drain once this public hospital is there.' Suqian's health bureau could not be contacted for comment yesterday. Ge has tried to pacify worried private hospital owners. 'We fully support privately owned hospitals,' he said. 'However, if there is something individual hospitals can't do and can't do well, then the government needs to step in as the demand from the public is urgent.' Suqian party secretary Miao Ruilin also tried to assure the private hospital owners by holding a meeting with them, the newspaper said. 'There are some concerns about whether our medical reform is going backwards and I can assure you with certainty that the medical reform in Suqian will not go backwards or turn from side to side,' Miao was quoted as saying. 'Those hospitals which have been privatised will not be taken back. We will continue to encourage private capital investment in hospitals.' Peking University economist Professor Li Ling, welcomed the move and said its medical services market had finally been returned to normal. 'It will not work for Suqian to sell all the public hospitals,' Li said. 'The market does not function well in the area of medical services and it needs the intervention of government.'