18 Nov 2009 10:27

Yunnan to allow insurance companies to invest in public hospitals

Shanghai. November 18. INTERFAX-CHINA - China's insurance companies will be allowed to acquire stakes in public hospitals under the government's healthcare reform plan, Yunnan Provincial government announced on its Web site on Nov. 17.

Yunnan is the first province in China to welcome the participation of insurance companies in the asset reorganization of public hospitals following the China Insurance Regulatory Commission (CIRC)'s issuance of a circular in June this year promoting the role of insurance companies in China's health care reform.

Commercial health insurance companies will likely warm up to the policy as many are struggling to generate profits at the moment, resorting to setting high insurance premiums which in turn slow down the development of China's commercial health insurance sector, the analyst said.

However, a Shanghai-based insurance analyst noted that it may not be easy for insurance companies to acquire stakes in public hospitals. "One potential problem is that insurance companies will prefer to invest in established hospitals with quality medical assets but such hospitals will not necessarily welcome external investment," said the analyst, who declined to be named.

- KZ