Govt announces new rules allowing nonprofit status for privatehospit… – China CNC Machined Parts

The Ministry of Health issued a notice on its website yesterdaysaying that the government would allow private investors to set uphospitals as nonprofit medical institutions, which would bring moretax benefits to new private hospitals. The State Council in November 2010 asked the Ministry of Health andother related ministerial departments to encourage and guideprivate capital to establish more hospitals, and the newannouncement, backdated to April 13, is a step to implement such apolicy, the ministry said in the statement. The social, or private, capital can apply to set up for-profit ornonprofit medical institutions according to their business goals,the ministry said, scrapping a rule issued in 2000 stipulating thatindividually owned township clinics and incorporated, jointlyincorporated as well as China-foreign joint-venture medicalinstitutions should be generally categorized as for-profitorganizations. As for the private hospitals already established as for-profitorganizations, the ministry said that it would come up with anotherregulation to define how they can change their business categories.It did not provide a timetable. “The new measure can help encourage hospitals under differentforms of ownership to compete on a level playing field, becauseboth private and State-owned hospitals can now enjoy the same tax,land and wage policies. Semi Trailer Axle Parts

As a result, the move will improvehospitals’ service quality and benefit the patients,” YuDeming, chairman of the Chinese Pharmaceutical EnterprisesAssociation, a Beijing-based national trade body, told the GlobalTimes yesterday. “It also sends a signal to the State-owned hospitals thatcompetition is going to be fiercer,” Yu said. The market sizeof medical services in China is about 100 billion yuan ($15.8billion) a year, according to Yu. Nonprofit hospitals’ medical services incomes from such practicesas checkup, diagnosis and treatment are exempt from taxation, whilefor-profit hospitals have to pay all the taxes after a three-yeargrace period, according to the Ministry of Finance and the StateAdministration of Taxation. China CNC Machined Parts

As of the end of March, there were 8,864 private hospitals inChina, up over 21 percent year-on-year, according to the statisticsreleased by the Ministry of Health last week. But the number of patients treated in the private hospitals wasstill negligible, only around 3 percent of a total of 1.6 billiontreatments in the first quarter of 2012. Hospitals are heavy-asset investments. They are difficult to manageand the investment-return period is usually longer than eightyears. Private investors are reluctant to invest in the area if theplaying field is not level, a Shenzhen-based analyst told theGlobal Times. Trailer U Bolts

To let the patients enjoy the benefits brought by an increasingnumber of private hospitals, China should allow doctors and nursesto work freely in different hospitals under different forms ofownership, Yu said. Currently, doctors working in State-owned hospitals are onlyallowed to work in two additional places with permission.


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