Development of foreign invested hospitals in China: obstacles and coping strategies

Abstract

Since the Chinese government allowed foreign investors to open hospitals in China, the development of foreign invested hospitals has been slow. This paper reviews China’s policies and regulations on foreign invested hospitals. The purpose is to identify obstacles hindering the development of foreign invested hospitals and to propose strategies to overcome these obstacles. A case study was conducted to collect data from four foreign invested hospitals in China. The primary data include interviews, field surveys, and site visits. The secondary data include articles from newspapers and websites, hospital documentations, and media reports. The case study revealed four major obstacles facing foreign invested hospitals: unfavorable tax regulations, high service fees, low power status, and difficulty in physician recruitment. To overcome these obstacles, this paper recommends that foreign invested hospitals should develop external relationships with the government and other China’s public hospitals, reduce misunderstanding from patients and physicians, and select location and size wisely. This paper should be valuable for foreign investors who are interested in opening hospitals in China by helping them understand the regulatory context, avoid pitfalls, and develop suitable strategies.