Interview Synopsis

China’s high-end private hospital development trends

  • Private Equity
  • Healthcare
  • Greater China

United Family Healthcare (UFH) is one of the leading players in China’s private healthcare market. Although public hospitals provide for the vast majority of the population, private operators have made huge gains within the past decade. A former C-level executive from Qingdao United Family Hospital Co Ltd gave Third Bridge Forum an overview of what this sector looks like.

Exploring how healthy China’s private hospital market is and what investors need to examine

China’s private healthcare market took off in 2012, “which saw the injection of significant amounts of capital into private hospitals. However, the trend began to slow down in 2015.” The long payback time, amounting to several years, puts off some investors.

The company’s development: “is in line with the need to promote better distribution of healthcare resources in China. We need diversified development in healthcare to address the difficulty people face in accessing healthcare resources, and that’s exactly what UFH is pursuing.” Unlike many private players, which often zone in on medical specialties, UFH offers general hospitals.

UFH carefully picks hospital locations, targeting areas where high-income people live. Another factor is where government support is available: “I think UFH succeeded largely because its development strategies are closely aligned with government policies.”

The Interview also covered what operational metrics investors should keep an eye on. One that the specialist highlighted was hospitals’ cost structures, and whether money was mainly put towards labour or rent. Paying attention to regional differences is also vital, as people’s attitudes toward private healthcare differ across the country.

UFH’s partnerships with Dr Smile Medical Group and Fosun Pharma, and its acquisition by New Frontier in late 2019 were also covered, as well as what a light-asset approach would mean for the company.

To access all the human insights from Third Bridge’s Interview, China’s High-end Private Hospital Development Trends, click here to view the full transcript.

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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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