Costly care
- Source: Global Times
- [00:25 August 04 2009]
- Comments
A private health checkup center offers a customer medical checkup service with top examination facilities. Photo: IC
By Guo Lu
What do wealthy Chinese value most? Chen Feng whose recent physical checkup cost him 10,000 yuan ($1,460) at a Guangzhou health inspection center may be typical.
Chen owns a Guangzhou-based medium-sized wine company and has an annual income of about 2 million yuan ($293,000).
“My most recent investment has nothing to do with my business. It’s all about my health,” he said.
Chen became a customer of the Ciming Guangzhou health management center in July. It’s a branch of the Beijing Ciming Health Checkup and Management Co Ltd, which is the largest domestic healthcare management center by market.
“I’m 44 now and I care about myself more than the business, since I have a high risk factor for middle-age illnesses,” said Chen, “That’s why I bought a membership in Ciming.”
“Ciming offers me an annual medical checkup service with top examination facilities, as well as health improvement suggestions like regular text messages that remind me to take pills or recommend a healthy menu. I think the price is worth it,” Chen added.
Chen is not the only one interested in a posh healthcare service. A survey covering over 3,000 Chinese elites who live in the big cities such as Beijing, Shanghai and Guangzhou showed that over 60 percent of the interviewees said they would accept an annual expenditure of 2,000 to 3,000 yuan ($293 to $439) for health services.
The survey was conducted last year by Southeast University and Nanjing AHCC Health Consultation Co Ltd. Most of the responders had an annual income of about 500,000 yuan ($73,200).
Huge profits
“Before 2002, Chinese had limited knowledge of healthcare, not to mention a professional health checkup center,” Lu Hongyan, a physician from Guangzhou Oversea Chinese Hospital, told the Global Times.
“After 2003 when SARS spread and people realized the importance of healthcare, the number of private health checkup centers started to boom, ” Lu said.
According to a recent research from Tiantu Capital, a Beijing-based venture capital company, the total value of the health checkup market in China was over 20 billion yuan ($2.93 billion) by the end of 2008, with an average gross profit rate of 50 percent.
The research report pointed out that the health checkup industry is new as well as profitable.
“There are over 5,000 health checkup centers in China, over 80 percent of which are the subsidiaries of public hospitals, but the number of people who use them is less than 10 percent, while in the developed countries the rate is as high as 70 percent,” said the report.
“Big cities like Beijing have a general market scale of 1 billion yuan ($146 million), and the scale is still growing. The rate for such increasing could be 20 percent to 30 percent during the next decade,” the report added.
stered capital was 15 million yuan ($2.20 million) at the beginning and then reached 55 million yuan ($8.05 million) after three years of rapid expansion.
The company has an operating income of more than 200 million yuan ($29.3 million) at the end of 2008, up 32 percent from a year ago despite the bad economy.
Moreover, in the first quarter this year, the company’s gross operating income reached 3.5 million yuan ($512,000), 90 percent up from the same time last year.
According to Ciming’s website, the company expanded its branches to 45 this year, covering 17 major cities such as Beijing, Guangzhou, Shenzhen, Shanghai, and Wuhan.
Membership levels
Many private health centers have a membership system that offers different health management services depending on how much members are willing to spend. While they don’t offer medical treatment services, the centers can recommend hospitals and physicians and smooth the way for care if needed.
The rates for individual memberships can vary from 2,000 yuan to 10,000 yuan ($290 to $1,460) annually, and some are even as high as 80,000 yuan ($11,700), according to a report by the Guangzhou Daily last month.
Ciming, for example, features eight different options (A to H) that offer increasingly more services depending on the level. The average rate (C) is about 1,500 yuan ($220) for the basic physical checkup service while the most expensive one (H) that includes the most comprehensive services costs 9,562 yuan ($1,400).
“We started the H service in Beijing in 2007 and signed up 46 customers the same year. Among all the customers, 35 were males with the average age of 45, who were mainly corporate executives, senior civil servants, academics and celebrities that are under a lot of pressure throughout the year,” said Cui Qixiang, a specialist from Ciming.
“We have special VIP services for these customers, including free text message reminders of individual healthcare, one-on-one customer specialists who offers treatment assistance and recommendations for booking visits to public hospitals,” Cui noted.
However, the number of these premium level customers is still small. According to Ciming’s figures there were 100 H-level clients last year, which accounted for less than 0.1 percent of the company’s total membership of 88,854.
Zhu Yonghua, an industry analyst from Tiantu Capital, told the Global Times that, “there is a lot of room for developing the high-end health service market in China. Spending more than 10,000 yuan is reasonable, since wealthy people in China may have money, but have little access to the best medical help so far.”
