18 August 2019

Private hospitals can become an investment focus

Medical reform is one of the key items on the agenda of the two ongoing political meetings in Beijing — the Chinese People’s Political Consultative Conference and the National People’s Congress.

As the country’s aging population bolsters the demand for elderly care and medical services, the government needs to map out a clear policy to address the issue, according to Hong Kong Economic Journal’s EJ tactics column.

One of the proposals is to promote the development of private hospitals, but there are many obstacles along the way.

The main difficulty lies in including private hospitals in medical insurance schemes. Recruiting and retaining medical and health workers are also proving to be very challenging.

The government should introduce laws defining the nature and status of private hospitals, while playing an active role in the development, promotion and oversight of such hospitals, the column notes.

At the end of last year, the country had about 11,300 private hospitals, up by more than 1,500 from the previous year. In 2002, they only number 1,823.

Despite their growing presence, it’s becoming increasingly difficult to meet the rising demand for elderly care and medical services.

This is where the importance of private capital comes in. By entering the medical market, it will not only help in providing the infrastructure and financing for the medical sector, it will also help in diverting funds away from property speculation, says EJ tactics.

Private hospitals can become a major investment theme. Right now, there are only a few related stocks; Shanghai Fosun Pharmaceutical (02196.HK) and Phoenix Healthcare Group (01515.HK) are some of them.

The two have staged a strong rally so far this year, and this could be a signal that positive policy changes are brewing.

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Freelance journalist

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