China's Rx: Foreign-Owned Hospitals

Beijing wants 20 percent of beds in private hands, many foreign, by 2015
U.S. private equity firm Carlyle Group is an investor in Chang'an Hospital's owner Photograph by Daniele Mattioli for Bloomberg Businessweek

Dr. Wang Jingming, who runs Chang’an Hospital in Xi’an in Northwest China, is brimming with ideas on how to boost income from the 1,000-bed facility, including wringing more profit from its convenience store, the canteen, and even the mortuary. He’s already installed electronic swipe cards to track patients—and to identify underperforming doctors by gauging their treatment times. If the former People’s Liberation Army senior colonel sounds a lot like a sharp-penciled private equity investor, he should: Chang’an in June sold majority control to Concord Medical Services Holdings, which is backed by the U.S. private equity firm Carlyle Group. Wang points to how China’s hospitality industry benefited when foreign investment and business know-how was encouraged in the 1980s. “It’s now our hospitals that need to be better managed,” he says.

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