By staff reporter Gong Jing

A recovering patient in Nanjing said he was stunned by his experience at BenQ Hospital, a facility owned by the Taiwanese IT giant of the same name.

“They are like hotel servants,” he said, referring to BenQ's friendly doctors and nurses.

The private hospital stay was unlike anything the patient had seen during previous stays in China's public hospitals, which make up 80 percent of the mainland's medical institutions. He said a doctor familiar with his condition was in charge of treatments throughout a procedure, making him feel comfortable. At Chinese hospitals, however, patients have to explain their conditions separately to each medical staffer.

Chinese hospital operators have apparently started to learn from the Taiwanese, who started launching facilities on the mainland this spring.

BenQ Hospital opened May 12 as an investment of the BenQ Group. Another Taiwan-funded hospital that opened in May was Xiamen Chang Gung Hospital in Xiamen, Fujian Province, which was financed by Taiwanese billionaire Wang Yung-ching and his Formosa Plastics Group.

More than a dozen other Taiwanese firms are currently eyeing the mainland hospital market. China's deputy health minister, Gao Qiang, disclosed in May that the ministry has approved operations for 14 Taiwan-funded healthcare institutions. Meanwhile, Taiwanese doctors with at least five years experience have been declared eligible to work on the mainland.

The moves are believed to signal the health ministry's interest in learning from Taiwan while reforming the mainland's laggard healthcare sector.

China has been working on “marketization reform” of its healthcare sector since the 1980s, with the goal of pushing for a market-oriented model.

But the task has had limited success. For example, the government tried to stop financing public hospitals, but the financial burden consequently forced hospitals to seek revenues from drug sales, causing a surge in medication prices. And doctors sought to supplement low salaries with drug sales rebates, leading to a crisis in confidence among patients.

The Taiwanese System

BenQ's Dr. Chen Zhitan told Caijing that doctors in Taiwanese hospitals spend more time with patients than is typical in public hospitals, where doctors are often too busy to give individual attention.

In addition, better services are affordable. Medical care costs at BenQ are similar to those in other Nanjing hospitals that are rated Class A, which is the highest grade for a Chinese public hospital. Patient spending at BenQ is also covered by medical insurance.

The hospital's general manager, Chen Yishan, told Caijing that 80 percent of the hospital's medical resources are designed for ordinary patients, while the rest is aimed at wealthy patients. Medication and treatment prices are in line with Chinese government regulations.

An average patient payment at a Beijing Class A hospital is 26,000 yuan, which is higher than the price tag at Xiamen's Chang Gung. At the same time, the average monthly salary for a Beijing doctor is around 3,000 yuan, while Chang Gung doctors can earn 30,000 yuan.

In Chen's view, the mainland's healthcare sector faces the same problems that Taiwan confronted in the 1980s, when inefficient, high-cost public hospitals dominated the market.

Formosa Plastics helped change the sector by launching its first Chang Gung Hospital in Taiwan in 1983. A market-oriented management model was adopted, bringing competition to public hospitals and encouraging private hospitals.

To date, private competitors in Taiwan have raised their market share to around 80 percent, boosting the efficiency level of the entire healthcare sector.

China's Reform Effort

A healthcare reform expert in Beijing said a lack of government investment in China's public hospitals, and a wide gap between doctor workloads and earnings, are major reasons for problems in the mainland sector.

China gave foreign capital its first to access to the healthcare market in 2005 by allowing joint ventures. This step followed Beijing's commitments as a new member of the World Trade Organization.

In 2001, Wang and his Formosa Plastics proposed a US＄ 436 million investment to build Chang Gung hospitals in several mainland cities. But seven years passed before the dream became a reality.

Chang Gung's difficult journey to the mainland underscores the Beijing government's hesitation to open the market to competition, which may threaten the dominance of state-owned public hospitals.

Chen recommended the government encourage competition by letting foreign and private players enter the market.

Now the Taiwanese have arrived. But Chinese hospital officials are not necessarily shaking in their boots.

A senior manager at a Nanjing public hospital told Caijing his facility is paying close attention to BenQ. But he still thinks the city's public hospitals will survive the Taiwanese invasion.

An expert on China's medical reform told Caijing the government's decision to allow foreign-funded hospitals will not bring rapid changes to the market, since the number of public hospitals is bound to dwarf the newcomers for some time.

Moreover, public hospitals continue to operate under government policy protection. And the line between the market and government responsibilities is fuzzy.

Nevertheless, Chen is optimistic about the future of BenQ and Chang Gun in China. He thinks the Taiwan experience will help these new hospitals succeed on the mainland.

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