China Plans to Limit Growth of Large Hospitals

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China is planning to regulate the size and pace of development for large hospitals, specifically tertiary hospitals that offer comprehensive medical services and have the most beds, due to consistent growth in hospital capacity.

The National Health Commission recently released a plan during its annual work conference to enhance primary healthcare facilities, stabilize operations of secondary hospitals, and expand their rehab and nursing services. The plan also aims to adjust the scale and growth rate of tertiary hospitals.

Hospitals in China are categorized into a three-tier system: primary, secondary, and tertiary, based on their size, capabilities, and roles in healthcare delivery, education, and research. Each level is further graded according to standards like service quality and medical equipment, with Grade-A tertiary hospitals generally possessing the most advanced resources and infrastructure.

One expert noted that the decreasing purchasing power of medical services means expanding hospital beds further may not effectively support hospitals’ operational needs or performance assessments.

Driven by various internal and external factors, many tertiary public hospitals are expected to focus more on disciplined growth and salary reforms rather than expanding infrastructure excessively.

Despite a slower rate of increase, the growth of hospital beds in public institutions continued into 2024, with the number of beds per 1,000 residents rising from 7.23 to 7.32, according to recent data. However, the rate at which these beds are being utilized declined across all hospital levels.

Public hospital admission rates remain high, with secondary and tertiary hospitals often drawing patients away from primary care clinics, which lack adequate support on the demand side.

In rural county regions, numerous hospitals face patient shortages and underutilized beds, as more patients prefer city hospitals. This trend further hinders the pooling of medical insurance funds in county areas and complicates efforts to establish regional medical alliances.