Seattle company invests in private hospitals in China

Global Business

China’s aging population and growing middle class is a business opportunity too good for U.S. company Columbia Pacific Management to pass up. CCTV America’s Chris Casquejo reported this story from Seattle.

The Seattle company said it’ll invest $200 million to build two hospitals in Wuxi and Changzhou, cities in the coastal province of Jiangsu.

China expects foreign-owned hospitals to provide expertise in hospital management, advanced medical technology, and improve medical services.

“We see the tremendous market demand for private health care. We think the Chinese consumer has the ability to pay for private health care and to access better care,” Bee Lan Tan, president of Columbia China said.

With 250 beds each, the two hospitals will offer specialized treatment for clients who are wealthier and older.

A 2012 survey found that about 30 percent of China’s urban population currently possess some kind of private health insurance, while another 20 percent are planning to buy some in the near future, another area where Columbia Pacific Management sees opportunity.

“We are increasingly seeing a lot of Chinese buying a lot of private insurance so that they can access private health care,” Tan said.

Private health care is a growing sector in China.

There were 11,300 private hospitals in China last year, up from 3,200 in 2005. Industry analysts predicted another 8,000 will be privatized in the next 5-10 years.

Columbia Pacific is already in the hospital business in Asia, owning and operating 27 hospitals in India, Vietnam, Malaysia, and Indonesia.

But there are limits. Only investors from Macao, Taiwan, and Hong Kong can practice traditional Chinese medicine.

According to McKinsey & Co., health care spending in China is expected to nearly triple by 2020, climbing as high as $1 trillion every year.