Market Insight

Hospital Overcrowding to Spur New Opportunities for Medical Technology Market in China

April 15, 2015

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The rapid expansion of healthcare spending in China has led to improved healthcare facilities increased patient access. As a result, pressure on large metropolitan hospitals has intensified. Overcrowding is now increasingly common in large hospitals, putting at risk China’s target to achieve the 90% patient in-county-visit rate by 2020.


To counter this effect, the Chinese government has announced a new swathe of investment to develop county-based hospitals, offering a new opportunity for medical technology vendors in China. On January 4th 2015, the NHFPC released a formal supporting list of 500 county-level hospitals which will be highly supported by the central and regional government in the next 3 years  


On review of this list, IHS found a clear imbalance in support by region, providing a clearer view of how this new addressable market will develop:


According to this information, Sichuan will be the fastest growing province for county-level hospitals. Sichuan is expected to become the most developed healthcare center of excellence in South-West and North-West China. Zhejiang, Jiangsu, Shandong and Hebei province are projected to become strategically important Tier 1 supported provinces due to the increased supported from the government. IHS is expecting positive development in the above provinces. Despite the lower numbers of Tier 2 hospitals, the importance of these cannot be underestimated due to the support from economically strong provinces such as Guangdong and Fujian.


It should also be noted that the development of county-based hospital infrastructure has not always been delivered as intended. Enhancing grass-roots hospitals has been the major emphasis of the NHFPC (National Health and Family Planning Commission) since the “Chinese Medical Revolution” in 2009. However, development has not been as quick as the initial expectation proposed by the NHFPC, raising some concern over the new 2015 plans.


On the upside, the new list of county-level hospitals will provide a better map for suppliers in the healthcare industry, especially for the medical electronics providers. Having already experienced strong growth in the metropolitan tier 3 hospitals, suppliers are now turning their attention to the lower tier hospitals and rural areas. IHS predicts that there will be more chances in the previously mentioned high-supported provinces; this could result in huge financial gain for medical technology suppliers. Meanwhile, providing adequate medical electronics to these county-level hospitals will be a key factor for suppliers. The government recently developed a ‘preferred supplier’ list for medical technology which significantly favors local vendors.


For multinational suppliers to see the same growth in tier 2 and tier 1 hospitals as they experienced in the heyday of development in metropolitan hospital, they will be required  However, the equipment needs for county-level hospitals are very different from tier 3 and tier 2 hospitals in big cities in China. To make it clear, mid-range and low-end medical electronics with reasonable pricing strategy should have more opportunities among county-level hospitals in the next 3 years in China.

Research by Market
Healthcare Technology
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