Hong Kong has traditionally been a magnet for medical tourists from the mainland for its premium healthcare services, but Guangdong is on track to give the city a run for its money as more high-end healthcare operators enter the fray. He Shusi reports from Hong Kong. 

This undated photo shows patients waiting to see medical staff at a United Family Healthcare hospital. (PHOTO PROVIDED TO CHINA DAILY)

Hong Kong, with a reputable healthcare network, plus its proximity to Guangdong province, has had its fair share of Chinese mainland residents coming to the city for premium services.

However, with more high-end private hospitals springing up in Guangdong, the province could have a larger slice of the lucrative domestic market, by attracting mainland residents. Experts believe investment opportunities abound with the affluent southern province’s large population.

Guangdong’s close ties with Hong Kong, on the other hand, will allow the special administrative region to contribute to establishing healthcare operators of international standard in the province and keep the pool of patients who used to go to Hong Kong or abroad for treatment.

Experts believe it could work out the other way round with more Hong Kong residents heading to Guangdong for medical services, which cost less but are of the same quality.

There has been a trend for Hong Kong residents and foreign patients living in Guangdong province to seek for premium healthcare in the region, said Carl Wu, president of Hong Kong-based New Frontier Health

Medical tourism took root among the mainland’s middle-class in the past as they headed for Hong Kong, spending tens or hundreds of thousands of dollars on costly surgeries, securing vaccines or giving birth, while enjoying shopping in the offshore market.

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Since COVID-19 reared its head, the number of patients visiting Guangzhou United Family Hospital — a private hospital which opened in 2018 — has hit a record high, including growing numbers of Hong Kong patients, according to Carl Wu, president of Hong Kong-based New Frontier Health, which owns the hospital.

New Frontier Health has seen rising demand from mainland customers and is striving to introduce Hong Kong’s high-end medical services, especially in gynecology and obstetrics, pediatrics and medical cosmetology, to Guangdong.

As owner of the United Family Healthcare, one of China’s largest private healthcare operators, New Frontier Health is to open a new United Family hospital in Shenzhen in the third quarter of 2021. The company has invested 3 billion yuan (US$447.9 million) to build the 64,000-square-meter facility, located next to the Futian high-speed rail station linking Hong Kong and Guangdong.

Wu told China Daily the company has high hopes for the new general hospital — the largest in size and scale of investment under the United Family umbrella.

The facility is of similar size to Hong Kong’s flagship private hospital, Hong Kong Sanatorium and Hospital, which is popular among the city’s rich and famous. The new hospital in Shenzhen is designed to provide up to 350 beds. Each ward will be a single room, with the same standard as Sanatorium and Hospital but at least half of the price, said Wu.

While mainland patients seeking premium healthcare are the hospital’s main target, he stressed that Hong Kong remains a key market.

There has been a trend for Hong Kong residents and foreign patients living in Guangdong province to seek for premium healthcare in the region, he said.

It’s also closer for people living in the northern part of Hong Kong to attend a hospital in Shenzhen’s Futian district than one on Hong Kong Island, especially when the facility can offer the same quality of services, larger space and lower prices, he noted.

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In terms of hospital management, services and cutting-edge treatment for serious diseases, such as tumor and thoracic surgery, United Family hospitals will make full use of Hong Kong’s experience, said Wu.

At United Family hospitals across China, mainland doctors account for up to 75 percent of the staff, while the rest are foreign experts, according to Wu. At the new Shenzhen hospital, more Hong Kong doctors will be hired to provide tailor-made services for patients who used to visit medical institutions in the SAR, he said.

United Family hospitals in Guangdong are able to link with the group’s medical system in Hong Kong and share records of patients, aided by a dual language system in English and Chinese, to make it easier for Hong Kong doctors to prescribe.

Moreover, Wu said New Frontier has been in discussions with leading insurers in Hong Kong and on the mainland to introduce tailor-made insurance products for United Family hospitals in the Bay Area, and allow patients from both sides to enjoy cheaper medical services. The response has been quite positive, he said.

Without identifying these insurers, Wu said they’re all household names and are willing to work with the group to get more clients in the Bay Area.

The mainland portion of the Bay Area has significant potential for healthcare operators with its large population, and investment opportunities are up for grabs, said Jens Ewert, Deloitte China’s life sciences and healthcare leader

Promising investment

The global medical tourism market is projected to sprout from US$60 billion in 2018 to US$140 billion over the next three years, with the Asia-Pacific at the center of growth.

The Bay Area is now home to more than 70 million people, with 17 percent of the population aged above 65, pointing to an assured huge demand for healthcare services.

The mainland portion of the Bay Area has significant potential for healthcare operators with its large population, and investment opportunities are up for grabs, said Jens Ewert, Deloitte China’s life sciences and healthcare leader.

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In terms of medical services, Hong Kong has an edge in international collaboration, with easier access to emerging treatments and new drugs. Guangdong has a deep talent pool of physicians who tend to acquire greater experience in their specialization due to a heavy patient volume that exposes them to a wider range of issues, he said.

For this reason, many of Guangdong’s high-skilled physicians are much sought after by patients in Hong Kong and Macao who would regularly travel to the province for treatments or procedures. In the past, foreigners living in Guangdong would go to Hong Kong or other destinations for medical care, Ewert noted.

Although Guangdong’s international reputation in the sector has made strides in recent years, he said many providers still struggle to support international patients due to language barriers and unfamiliar procedural requirements. As such, the province has not become a leading destination for medical tourism despite its favorable cost structure, he said.

Ewert is optimistic that the picture could be improved by allowing Hong Kong and other world-class physicians to practice in Guangdong. Internships and rotational projects for which Hong Kong and global physicians can work in Guangdong could be an effective strategy to improve the province’s capability to cater to a world market and raise its profile, he said.

He Yuanyuan, a researcher at the Public Economy Research Institute of the Shenzhen-based China Development Institute, says that Guangdong’s healthcare services have a clear advantage in pricing over Hong Kong due to lower costs on drugs, skilled medical staff and facilities.

As Guangdong residents enjoy a higher standard of living amid a booming Chinese economy, he’s optimistic about the province’s investment prospects in private premium healthcare, backed by the region’s large population.

However, the development of private hospitals with international standards calls for world-class medical staff to be allowed to practice in Guangdong, as well as the use of new drugs and medical facilities. He pointed out this is where policy innovation plays a crucial part. For instance, the use of stem cell technology in clinical therapeutics is still quite restricted on the mainland.

If Guangdong private healthcare providers continue to raise their standards and lure Hong Kong residents, it would be exemplary for the improvement and betterment of the Bay Area’s overall medical services, said Li Yuan, a senior analyst who specializes in China’s healthcare industry with the Economist Intelligence Unit

The application of international medical standards is the main area to be reformed in the Bay Area, He said. 

At the same time, to get more Hong Kong residents to settle in Guangdong — a major advocate under the Bay Area’s development — He called for more widespread use of Hong Kong insurance products in mainland medical institutions so that Hong Kong residents can enjoy high-end healthcare services on the mainland at lower costs.

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Although premium healthcare in Guangdong mainly caters to mainland customers, Li Yuan, a senior analyst who specializes in China’s healthcare industry with the Economist Intelligence Unit, thinks that high value-added healthcare services in Guangdong, especially services for the elderly, and for recovery and long-term nursing, would appeal to Hong Kong people who have retirement houses in Guangdong.

These services need large land areas, as well as adequate space for supporting medical facilities. Guangdong has that capacity, which comes at a lower cost but equal quality to that of Hong Kong’s, he said.

With the launch of favorable housing policies for Hong Kong residents to acquire property in the Bay Area, Li predicts that over the next decade, up to 10 percent of the SAR’s elderly people may own homes in Guangdong and become potential customers of premium medical services in the region.

According to a recent survey conducted by Hong Kong’s Census and Statistics Department, up to 270,000 Hong Kong residents intend to live in Bay Area cities in Guangdong, while 14.4 percent of respondents said they’ve yet to make up their mind, but they’ll be more willing to move out of Hong Kong if the mainland can offer quality medical services similar to Hong Kong’s.

The emergence of premium medical services operators, such as United Family Healthcare, can promote Guangdong’s healthcare among Hong Kong residents by allowing them easy access to cheaper and quality healthcare, stressed Li.

If Guangdong private healthcare providers continue to raise their standards and lure Hong Kong residents, it would be exemplary for the improvement and betterment of the Bay Area’s overall medical services, he said.

In terms of the examination of and approval for the application of new drugs, the recruitment of overseas medical staff and the establishment of new private hospitals, the mainland authorities’ response has been pragmatic by opening green channels for medical institutions since last year, reflecting positive sentiment for private healthcare markets, Li said.

He said the “Hong Kong-style” University of Hong Kong-Shenzhen Hospital — one of the university’s two teaching hospitals — and United Family hospitals in the region have demonstrated successful experience in policy innovation in the Bay Area and is worth popularizing.

Although healthcare has become a trending industry under the COVID-19 threat, Li warned healthcare investors of policy risks when investing in the Bay Area.

What to look out for, he said, are what kind of Hong Kong-registered drugs and medical devices will be allowed for use at Hong Kong-owned healthcare institutions, and specifically, what type of medical services an operator provides. Risks also include the uncertainties of Hong Kong people’s willingness to visit mainland medical institutions, he said. 

Contact the writer at heshusi@chinadailyhk.com