Medical Industry in China 2014 - 2018: Market Size, Shares, Trends, Analysis and Forecast Report by

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As a public service provider, medical institutions are regulated by National Health and Family Planning Commission of China and other related government departments. Uneven regional distribution of medical resources exhibits the uneven economic development in aspects of medical institution classification, assets scale, revenue and expenditure, and distribution of private and foreign-funded medical institutions for profits. Developed regions like Shanghai, Beijing, Guangdong and Zhejiang have more advanced medical technology.

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According to the Chinese government, the total medical expense was approximately CNY 2,891.44 billion (about USD 466 billion) in 2012, up by 18.8% compared with that in 2011. The medical expense per capita was CNY 2,135.8 (approximately USD 344) at a growth rate of 18.2%. The total medical expense and expense per capita are increasing rapidly due to economic growth and population aging. In 2012, the total medical expense accounted for 5.57% of GDP, 0.42% higher than that in 2011. However, the percentage was much lower than that in developed countries.

The number of medical institutions was 0.962 million by the end of November 2013, including 24,000 hospitals, 0.923 million primary medical institutions, 12,000 public medical institutions and 2,000 other institutions. The number of hospitals and public medical institutions increased by 1,564 and 247 respectively while that of primary medical institutions decreased by 1,606 compared with those in November 2012.

The number of visits in medical institutions reached 6.41 billion in January to November 2013, up by 8.2% YOY, including 2.41 billion in hospitals (up by 9.5% YOY), 3.79 billion in primary medical institutions (up by 7.3% YOY) and 0.21 billion in other institutions. The number of visits in public hospitals was 2.17 billion (up by 8.9% YOY) while that in private hospitals was 0.24 billion, up by 15.6% YOY, which exhibits rapid development of private hospitals in China.

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The medical system in China was controlled by public medical institutions for a long time, leading to problems such as lack of competition, uneven resource distribution, poor service and underdeveloped technology, as well as frequent disputes between doctors and patients. Hindered by certain interest groups, the development of the medical system fell far behind other industries in China. The new government attempts to reform the medical system which exhibits great market potential. According to CRI, new entrants such as private and foreign-funded enterprises are bullish about the prospect of the medical industry due to the reform measures. New medical institutions need at least 3-5 years to make profits while M&A institutions need much shorter period of time by taking advantage of the existing employees, equipment and patients of the purchased medical institutions.

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