(Yicai) Dec. 2 -- China has allowed overseas entities to set up wholly-owned private hospitals in eight cities and one province to further open up China's healthcare sector, attract more overseas investment, and better meet patients’ medical needs.

The areas are Beijing, Fuzhou, Guangzhou, Nanjing, Shanghai, Shenzhen, Suzhou, Tianjin, and Hainan province, according to a plan issued by the National Health Commission on Nov. 29.

The plan includes general, specialty, and rehabilitation hospitals but excludes traditional Chinese medicine hospitals. It also forbids the acquisition of public hospitals by foreign entities.

The announcement comes nearly two months after the NHC, the Ministry of Commerce, and the National Medical Products Administration unveiled a pilot program to allow private hospitals in the above nine areas to be wholly owned by foreign entities.

China had more than 38,000 hospitals last year, of which less than one-third were public hospitals, according to public data. However, consultations at public hospitals accounted for nearly 84 percent of the total.

"Wholly foreign-owned hospitals will need to differentiate their role and service model from existing medical institutions," Cai Jiangnan, executive director of the Shanghai Chuangqi Health Development Institute, told Yicai. "This way, they will not only facilitate expatriates' access to healthcare but also attract a portion of the Chinese high-income population that originally sought advanced diagnostic and treatment overseas."

China should also welcome wholly foreign-owned hospital brands with ordinary service capabilities by providing them with the same regulatory support as other medical institutions, said Zhao Dahai, a professor at Shanghai Jiaotong University's School of International and Public Affairs.

As for whether wholly foreign-funded hospitals should become designated health insurance organizations, experts told Yicai that there have been precedents. However, their registration and medical service fees are much more expensive, so even if the health insurance program can refund a part, the sum patients have to pay out of their pockets remains substantial.

Therefore, the experts believe that the areas piloting the program should decide on their own, based on their health insurance financing amount.

Editor: Futura Costaglione