China’s State Council recently promulgated the roadmap for health care reform in 2011–15, setting forth objectives, benchmarks and goals to be accomplished during that period. In particular, the Chinese Government intends to encourage the establishment of non-public medical facilities.
McDermott Will & Emery has a strategic alliance with MWE China Law Offices, a separate law firm based in Shanghai. This China Law Alert was authored by MWE China Law Offices lawyers Leon Liu and Teresa Lou.
On 14 March 2012, the State Council, China’s chief administrative authority, promulgated the roadmap and implementation plan on health care reform for the 12th Five-Year Plan period (2011–15) (the Roadmap). The Roadmap is the guiding document for further health care reform over the next four years. It sets forth the objectives and benchmarks of the reform as well as the goals to be accomplished during 2012–2015. Five-Year Plans are a series of social and economic development initiatives shaped by the Communist Party of China through the plenary sessions of the Central Committee and national congresses. Each Five-Year Plan is established for the entire country and typically contains detailed economic development guidelines for all regions.
The Roadmap states that the Chinese Government will continue to encourage the establishment of non-public medical facilities. It further states that the Government intends to have non-public medical facilities provide 20 per cent of the total hospital beds and medical services in China by 2015. To achieve this goal, the Government will adopt the following measures set forth in the Roadmap.
- Expand the scope of medical facilities that non-governmental enterprises can establish. This measure encourages non-governmental entities, such as business enterprises, charity institutions, funds, commercial insurance organisations and foreign investors, to establish medical facilities (non-public medical facilities). Individuals from Hong Kong, Macau and Taiwan with the appropriate qualifications also are encouraged to set up private clinics.
- Provide a favourable environment for the operation of non-public medical facilities. This measure fully implements the preferential policies for non-public medical facilities in relation to pricing, tax, medical reimbursement unit listing, land, qualification recognition and the establishment of key academic subjects. The non-public medical facilities established by non-governmental entities will enjoy the same policies on tax and pricing as public medical facilities.
- Encourage non-public medical facilities to expand their operations. Non-profit medical facilities will be afforded preferential treatment by the Government, and non-public medical facilities are encouraged to expand into larger medical groups.
Previously, the State Council issued the Opinion for Further Encouraging and Guiding non-governmental entities in the Setup of Medical Facilities (Opinion) on 26 November 2010, which elaborated upon various aspects of the policy to encourage the establishment of non-public medical facilities. The fact that the newly promulgated Roadmap reiterates the essence of the policies set forth in the Opinion shows that the Chinese Government considers non-public medical facilities to be an important element in China’s health care reform. However, it remains to be seen whether the Chinese Government will eliminate existing obstacles to the establishment of non-public medical facilities by non-governmental entities, such as previous restrictive policies on obtaining land for building premises and on hiring doctors from public hospitals.