Investment, Acquisition, and Self-Build: Bon Health Models Its Rehabilitation Hospitals After Germany’s Rhine Rehabilitation Hospital to Create a Localized System

As early as 2017, HUAPONT LIFE SCIENCES (hereinafter referred to as “HUAPONT LIFE SCIENCES”) announced that it would invest RMB 200 million in the new construction of the Beijing Huasheng Rehabilitation Hospital project.

As a publicly listed company with pharmaceutical manufacturing as its core business, why has HUAPONT LIFE SCIENCES chosen to build specialized rehabilitation hospitals? What expertise has it accumulated in this area, and what is the current status of its progress? VCBeat interviewed the project team at HUAPONT LIFE SCIENCES to address these questions.

HUAPONT LIFE SCIENCES was previously primarily engaged in the research, production, and sales of chemical drugs in the fields of dermatology, anti-tuberculosis, and anti-tumor treatments, as well as the research and development of other chemical and natural medicines. HUAPONT LIFE SCIENCES holds approximately 10% and 30% market shares in the niche prescription drug markets for dermatology and tuberculosis, respectively, and is a well-known enterprise in China’s dermatology and tuberculosis sectors.

HUAPONT LIFE SCIENCES Headquarters

HUAPONT LIFE SCIENCES’ project team told reporters that since 2008, the company has been an industry leader in the field of prescription dermatological drugs. As the market for prescription dermatological drugs has become saturated, HUAPONT LIFE SCIENCES’ investment in Lijiang Yulong Snow Mountain Tourism Co., Ltd. has also remained highly stable. To further expand its business and sustain continuous growth in corporate performance, the company has proposed a “second entrepreneurial initiative” internally, aiming to broaden HUAPONT LIFE SCIENCES’ business footprint.

The company internally believes that, as a player in the healthcare sector, its business expansion should also be health-related. As medical services constitute the core segment of the entire healthcare industry, with hospitals serving as key carriers, establishing a presence in hospital operations is of significant importance to helping HUAPONT LIFE SCIENCES perfect its industrial chain. Therefore, the company has resolved to invest heavily in building hospitals under the HUAPONT LIFE SCIENCES brand.

When planning its departmental structure and business operations, the company conducted thorough research and careful consideration. In fields such as obstetrics and gynecology, pediatrics, orthopedics, and cardiology, there are already many well-established hospitals and teams in China, particularly in Beijing. If HUAPONT LIFE SCIENCES were to enter these markets starting from scratch, it would face intense market competition. This would not only be challenging for a newcomer like HUAPONT LIFE SCIENCES but also constitute a waste of social resources. After prudent comparison, the company determined internally that the rehabilitation department aligns with HUAPONT LIFE SCIENCES’ current needs.

First, there is a significant gap in the development of rehabilitation services in China compared to developed countries. China has yet to see the emergence of large-scale private rehabilitation hospital chains or rehabilitation clinic networks. Furthermore, public hospitals have historically placed insufficient emphasis on rehabilitation departments, with many only beginning to establish such units in recent years. As a result, the competitive advantage of public hospitals over private ones is not substantial, as both are essentially beginners in this field. This landscape is particularly favorable for new entrants.

Second, rehabilitation medicine is relatively well-developed in some countries, with established case studies available for reference.

3., with the improvement of living standards in China and the increase in people's health awareness, after meeting basic health needs such as prevention, healthcare, and treatment, public awareness of rehabilitation is also continuously increasing, leading to growing rehabilitation demands and an expanding market size.

4., national policies have also encouraged the development of rehabilitation departments. For instance, Beijing has mandated that secondary hospitals must establish rehabilitation departments. Rehabilitation medicine has gained significant attention from the state, with policy support continuously strengthening. In 2010, the government included more rehabilitation treatment items in the medical insurance coverage, which increased to 29 items by 2016, effectively stimulating the demand for rehabilitation therapies.

Based on the above four points, HUAPONT LIFE SCIENCES has decided to enter the rehabilitation industry and establish its own rehabilitation hospital.

Due to the late start and insufficient attention given to rehabilitation in China, there is currently no large-scale private rehabilitation hospital that can serve as a model. Therefore, when HUAPONT LIFE SCIENCES entered the sector, it did not initially build its own hospitals; instead, it first acquired operational expertise and cultivated a medical operations team through investments and acquisitions.

HUAPONT LIFE SCIENCES’ project team told VCBeat that the Rhein Rehabilitation Hospital in Germany is a long-established specialized rehabilitation hospital with over 300 beds, ranking among the largest of its kind locally. The hospital has extensive experience in rehabilitation medicine across orthopedics, internal medicine, sports injuries, cardiovascular and cerebrovascular diseases, and venous disorders. It also operates an outpatient rehabilitation clinic offering medical services such as osteopathic manipulation, physical therapy, specialized massage, and exercise therapy.

InGermany possesses world-leading expertise in establishing rehabilitation standards. By acquiring the German Rhine Rehabilitation Hospital, HUAPONT LIFE SCIENCES can replicate Germany’s advanced rehabilitation treatment and operational management practices in China, enabling the company to rapidly master international best practices in rehabilitation concepts and business operations.In addition, the German Rhine Rehabilitation Hospital will also serve as a talent training base for HUAPONT LIFE SCIENCES, supporting the development of its rehabilitation team.

HUAPONT LIFE SCIENCES’ project team told VCBeat that the acquisition of Germany’s Rhine Rehabilitation Hospital was aimed at learning from its advanced expertise, and that the Beijing Huasheng Rehabilitation Hospital currently under construction is not a simple replica of the German facility. Given differences in national conditions, departmental planning must also be tailored to China’s local realities.

Taking patient sources as an example, Germany’s rehabilitation services strictly adhere to a tiered referral system. Generally, after admission during the acute phase, the attending physician initiates rehabilitation treatment based on the assessment results of the Functional Independence Measure (FIM) and the patient’s tolerance level. Once the patient’s condition stabilizes, they are triaged and referred to acute rehabilitation wards, subacute rehabilitation wards, specialized rehabilitation nursing facilities, or long-term care institutions. Patients who can recover without inpatient rehabilitation therapy may be transferred promptly to home-based and community-based care settings.

Therefore, rehabilitation hospitals in Germany do not need to worry about patient sources; they can focus on delivering high-quality rehabilitation treatment.

However, China lacks a well-established rehabilitation referral system, and private rehabilitation hospitals are currently unable to promptly intervene in the rehabilitation treatment of patients in general hospitals.

As a private rehabilitation hospital, it is necessary to address the issue of patient acquisition. The approach adopted by Huasheng Rehabilitation Hospital isCentered on rehabilitation, with the establishment of select ancillary clinical departments.

The setup of clinical departments should center on rehabilitation, with priority given to establishing neurology and orthopedics based on public demand.Because neurological rehabilitation patients currently account for 60%-70% of the rehabilitation population in China, while orthopedic rehabilitation accounts for 20%.。

As a tertiary hospital, Huasheng Rehabilitation Hospital is required by policy to address the healthcare needs of the surrounding population. To facilitate access to care for local residents, the hospital has established outpatient clinics in gynecology, pediatrics, internal medicine, surgery, and dentistry.

The rationale for such departmental configuration,This is because the Second Affiliated Hospital of Chongqing Medical University Kuanren Rehabilitation Hospital, in which HUAPONT LIFE SCIENCES holds a stake, initially offered only rehabilitation services during its early operational phase, resulting in suboptimal therapeutic and operational outcomes. The underlying reason was that physicians struggled to intervene in patients’ rehabilitation at an early stage; by the time many patients arrived at Kuanren Rehabilitation Hospital, they had already missed the optimal window for intervention.

Due to the lack of outpatient clinics, the range of patients and conditions that the hospital could treat was relatively narrow, leading to some waste of medical resources. Since 2016, Kuanren Hospital has implemented reforms by adding clinical departments, which not only serve the surrounding community but also improve operational efficiency, resulting in increasingly better operational performance.。

Based on this, the rehabilitation model of Germany’s Rhine Rehabilitation Hospital cannot be simply replicated in China. Instead, it will become an integral component of HUAPONT LIFE SCIENCES’ rehabilitation medical system, serving as a key technical support. HUAPONT LIFE SCIENCES aims to draw on German rehabilitation standards to establish a set of standards tailored to China’s national conditions. After validation at Huasheng Rehabilitation Hospital, these standards will be promoted to other regions when opportunities arise.

Regarding the advantages and services of Watson Rehabilitation Hospital, the project team from HUAPONT LIFE SCIENCES stated that its most distinctive service is sports rehabilitation learned from the Rhine Rehabilitation Hospital in Germany.

In the German rehabilitation philosophy, exercise-based rehabilitation is a recognized modality. It extends beyond recovery from sports-related injuries; any rehabilitation approach that utilizes physical exercise qualifies as exercise-based rehabilitation. Currently, many rehabilitation programs require patients to perform extensive exercise training in accordance with medical advice. Therefore, exercise-based rehabilitation plays an exceptionally important role across all forms of rehabilitation.。

Furthermore, Germany has accumulated extensive experience in preventing disease recurrence following rehabilitation. Reducing the likelihood of relapse among rehabilitated patients enables them to enjoy a better quality of life. It is worth noting that the development of Watson Rehabilitation Hospital has received significant attention and strong support from Beijing’s sports administration authorities. Consequently, the hospital will engage in deep collaboration with the Beijing Sports Bureau in its future operations, focusing on sports rehabilitation to safeguard public participation in physical activities.

In addition to sports rehabilitation, as a private hospital, Huasheng Rehabilitation Hospital enjoys greater flexibility, allowing it to adjust its strategies in a timely manner based on the public’s awareness of rehabilitation, domestic rehabilitation processes, payment methods, and the development of rehabilitation departments in public hospitals.

Currently, there is a shortage of excellent rehabilitation physicians and therapists in China. In terms of rehabilitation talent, Huasheng Rehabilitation Hospital also faces the challenge of insufficient high-end professionals, reflecting its strong demand for talent.

In terms of talent development, Watson Rehabilitation Hospital provides technical training, in-house training, and international exchange opportunities for rehabilitation physicians and therapists. Currently, the hospital has selected rehabilitation physicians to undertake on-site study at Rhein Rehabilitation Hospital in Germany, helping them master internationally leading rehabilitation concepts and knowledge.

Meanwhile, Watson Rehabilitation Hospital will work closely with the German-Chinese Rehabilitation Association based in Germany, fully leveraging the German-Chinese Rehabilitation Agreement as a platform for information and experience exchange. This will enable domestic rehabilitation physicians, therapists, and hospital operators to stay abreast of cutting-edge international developments, theories, and insights in rehabilitation. It will also provide opportunities for professional exchange and talent development in areas such as rehabilitation research, hospital management, and practical rehabilitation techniques, thereby advancing China’s rehabilitation sector.

Furthermore, offering reasonable compensation is a sign of respect for talent. Adhering to the consistent mission of HUAPONT LIFE SCIENCES, Huasheng Rehabilitation Hospital provides rehabilitation physicians and therapists with competitive and substantial transparent income.

Looking to the future, the project team at HUAPONT LIFE SCIENCES stated,HUAPONT LIFE SCIENCES will not pursue rash expansion; instead, it will concentrate its resources on first mastering and localizing Germany’s advanced rehabilitation concepts and standards. Once the system has matured and been validated, the company will share it with industry peers to jointly promote the sustainable development of China’s rehabilitation industry.。