Back to Page Authors: Xuanyi Nie

Keywords: policies, private hospitals, case studies, Beijing, Shenzhen, market incentives, policy instruments

Abstract: Chinese cities were recognized as growth machines over the past decades, and the pro-growth policies lead to the vast expansion of urban territories but often overlooked the significance and agency of healthcare services, thereby undermining social benefits in the cities. As the knowledge economy in the cities demands an increasingly skilled and educated workforce, the city population in return demands better medical care. Understanding that cities are and will continue to be the foundation for economic growth in China, the immediate challenge is to integrate the provision of healthcare service with urban development. The rise of private hospitals as a recent urban phenomenon suggests that the burden is on the shoulder of private providers – the number of private hospitals in China doubled to a total of 16,900 from 2011 to 2017, counting 57.2% of the total number of hospitals. While national-level policies encourage the development of private healthcare facilities, local-level policies at cities are rather tested and implemented under varying institutional and market contexts. This brings the question to a more fundamental level – what shapes the land policies for private healthcare facilities. This paper responds to this question by firstly examining the general trend and existing models of developing private hospitals in China. Understanding that different local governments achieve the same end results with different policy instruments, this paper identifies Beijing and Shenzhen as two case study cities to further interrogate the differences and causes inland policies for private healthcare facilities. Land in both cities is a scarce resource compared to their populations, both are growing in population, and both need more service providers in healthcare. But their attitudes toward land policies are drastically different - Beijing is a politically centralized and administration-oriented city with less room for experiments while Shenzhen, on the contrary, has served as the pioneer city for policy reforms in China, and has pushed forward many experiments including incentives such as reducing the land price for hospital development. While developers in both cities favor the acquisition of existing properties, this paper finds that the incentives and causes behind are significantly different. Land policies for private providers are shaped by administrative decisions and strategic planning in Beijing while the market-driven policies in Shenzhen are undermined by the lack of institutional resources in healthcare. This paper backs this hypothesis with reasoning from interviews with government officials, and statistical evidence.