Starting from Scratch: Building China’s Private Healthcare System

By Daniel Barber for the Center for Law and Biomedical Sciences Blog.

Danny BarberBeing lost in translation is frustrating, especially when important ideas need to be exchanged. Needless to say, in a crowded banquet hall located Chengdu China, a UNESCO city of gastronomy, it wasn’t the famous flower pepper of Chengdu that was making me sweat. Through phonetics, pinyin, and many hand gestures, I was struggling to communicate with a local entrepreneur running an internet technology company that provides services to the private Chinese health sector still in its infancy. However, despite my ignorance of the Chinese language and the great challenge presented to our interpreter, a picture of the rapidly changing Chinese health care marketplace was starting to form. As our diligent interpreter frantically explained her employer’s position, I began to understand how drastically the Chinese healthcare market would change. Writing on a leather notepad frequently used for translation, she explained that Sichuan Province’s healthcare was currently comprised of 90% publicly run hospitals, whereas only 10% were newly-formed private facilities. Excitedly, she explained that private healthcare was projected to meet or surpass the percentage of public facilities calculated by number of hospitals in the next decade alone.

Apart from an initial moment of amazement at the possibility of such a transformation, I quickly remembered that this type of change has defined China in the last 20 years. Nothing about these projections was preposterous, especially in the city of Chengdu. Best known its brief western spotlight as the location of the Chinese ghost cities,[1] Chengdu exemplifies juxtaposition. In this city, you will find newly christened skyscrapers with inspiring architecture built adjacent to dilapidated multifamily housing which has yet to be condemned. In another spot you may find exotic sports cars parked in front of the most luxurious of western stores, while haggling for a 3 USD watch occurs down the neighboring alleyway. Thus, from a westerner’s perspective it was only natural to believe that such growth in private luxury hospitals was only a logical extension of the cultural transformation occurring in Sichuan.

In the many days since my labored conversation, I have reflected on how this transformation may impact Sichuan. While there is a great possibility that this conversion will dramatically increase the quality of health and life in the area, I have wondered whether these private enterprises are planning on, or are capable of, providing health services to the millions of people in Chengdu who cannot afford the relatively costly private pricing schemes.[2] I worry that, like the clearly obvious wage disparity in Chengdu, these costly private health care facilities accepting western insurance plans will serve to create yet another enormous disparity in Sichuan.

Danny is currently a second year law student at the University of Utah S.J. Quinney College of Law, where he is a member of the Utah Law Review. Danny graduated with an honors degree from Westminster College, receiving a B.S. in Neuroscience. Prior to law school, Danny worked as an analytical chemist and spent time in Utah’s venture community while obtaining his MBA from Westminster College. Danny is actively pursuing an interest in Intellectual Property law, and spent his 1L summer clerking for Austin Rapp & Hardman. For his 2L summer, he will be joining Maschoff Brennan as a summer associate. In his spare time, he enjoys many outdoor activities including running, hiking, and exploring Utah’s mountains.

 

[1] Large scale apartment complexes left idle for lack of either people willing or financially capable to inhabit them

[2] The pricing structure for a three night “VIP” stay in Chengdu’s Angel women’s hospital is 8000 USD or roughly 48,000 RMB. Our local interpreter explained that an average livable wage for Chengdu was approximately 24,000 RMB per annum. For an interesting perspective on the Angel women’s hospital that our group toured, see http://www.economist.com/node/21552264.