China’s First Medical Mall Wins Approval

China will have its first medical mall now that the Zhejiang provincial government has waived a key requirement for the project, as the country seeks to relieve its overburdened public health care system.

The Quancheng International Medical Center has won approval from the Health and Family Planning Commission of Zhejiang province, which on Tuesday waived a requirement that health care facilities must all have a certain number of different medical departments.

The $15-million project, in Hangzhou, capital of the eastern China province, is backed by retailers Hangzhou Jiebai Group Co. Ltd., Baida Group Co. Ltd. and diagnosis technology developer Zhejiang Dian Diagnostics Co. Ltd.

Medical malls, which emerged in the U.S. in the 1980s, are a collection of independent clinics that share space, equipment, operating theaters and other resources. They can also invite doctors from hospitals to conduct occasional consultations.

The concept of a medical mall is not new, but the project is of interest to the health care community because it lowers the regulatory threshold for privately run clinics, said Eric Chong, director of consultancy Hong Kong Institute of Asclepius Hospital Management.

China’s 16,000 private health care facilities outnumbered its 12,000 public hospitals in 2016, but they received only 12.8% of patient visits in the country, according to the National Health and Family Planning Commission.

Patients in public hospitals often have to wait for long periods to see a doctor, only to find their consultation time has been squeezed. In an effort to make the sector more balanced, Beijing has been encouraging private-sector involvement in the health care industry.

In May, the State Council issued a document that vowed to build a “diversified” health care system by offering private capital easier access to the industry.

The medical mall in Hangzhou will partner with the Sir Run Ru Shaw Hospital of Zhejiang University School of Medicine, allowing the facility to offer surgeries — a service beyond the capabilities of most private clinics.

Besides the medical mall in Hangzhou, a new clinic chain, Tencent DoctorWork, which is backed by tech giant Tencent Holdings Ltd. and Sequoia Capital, has also landed in Beijing and Chengdu. The facility offers services both online and offline, and will share some health care personnel — such as physicians — with hospitals.

The consultant Chong said that this type of shared-clinic will not become a major force in health care because of gaps in knowledge, capabilities and medical vocabulary among professionals from different institutions.

“This kind of medical mall must establish a highly efficient communication system to connect the clinics,” Chong said.

Contact reporter Coco Feng (renkefeng@caixin.com)