Shanghai municipal government is undertaking more thoroughgoing health reforms in its effort to attract more private and foreign capital into medicine and healthcare in the city.

"A series of policies will be mapped out soon to develop private medical institutes, so that local residents may have access to a variety of levels of medical service offered by both public and private hospitals,'' the city's spokeswoman said during a weekly news conference held yesterday.

At present, the city's 79 private hospitals, with about 4,000 beds, make up only a small part of the city's medical facilities, there being a total of 430 public hospitals, with over 70,000 beds, and most of these private establishments are small or medium in size, with only 20 of them having more than 100 beds.

The new policies require that some of the excessive number of public hospitals be privatized or become jointly-run medical institutes to improve management of local medical facilities as a whole. And influential local people in the city will be encouraged to help manage public hospitals in a variety of ways, such as setting up hospital management companies.

The spokeswoman stressed that basic healthcare services for the public would be ensured, as the government will support the construction of public hospitals from the community level to the city level.

The new policy will also encourage enterprises and individuals to open medical institutes as well as pushing for public donations and foreign investment in the healthcare industry.

Private and foreign investors will be permitted to form joint ventures with local hospitals at the district and city level to ensure an adequate supply of trained personnel and sufficient technical resources.

However, foreign investors should still abide by the regulations set by the Ministry of Health which require that foreign investment should not be less than 20 million yuan (US$2.41 million) in any one project and that the Chinese side should hold over 30 per cent of shares.

Another exciting policy for private hospitals is that non-profit hospitals will also join the city's social medical insurance system, which covers 6 million of the city's total population of 16 million. At present, only a few private hospitals are approved to receive patients covered by insurance, which is a tremendous incentive for other private hospitals which would like to compete with public hospitals for a piece of the insurance money pie.

"The exciting policy creates potential business opportunities and the new management system will also greatly improve the operation of local hospitals,'' said Chen Guoxing, president of Shanghai Media Hospital Investment & Management Co Ltd.

Liu Chunlong, at Renai, another private hospital told China Daily that in recent days quite a number of district-level private hospitals have came to Renai to explore the possibility of co-operation.

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