China Launches Public-Private Partnership for Affordable Elderly Care with RMB 20,000 Subsidy per Bed in Seven Pilot Cities

VCBeat (WeChat ID: vcbeat) has learned that this morning (February 22, 2019), the National Development and Reform Commission, together with the Ministry of Civil Affairs, the National Health Commission, and other departments, held a special launch meeting for the “Special Action on City-Enterprise Collaboration for Inclusive Elderly Care” in Beijing, and simultaneously issued the “Implementation Plan for the Special Action on City-Enterprise Collaboration for Inclusive Elderly Care.”

Special initiatives focus on inclusive elderly care, deepening city-enterprise cooperation around the principles of “government support, social operation, and reasonable pricing.” The state supports and guides city governments in the systematic planning and construction of elderly care service systems through central budgetary investments. City governments provide a comprehensive package of policy support, including land, planning, financing, fiscal and tax incentives, integration of medical and elderly care, and talent development. In return, enterprises fulfill their public welfare obligations as agreed, offering packages of affordable elderly care services that are disclosed to the public and subject to oversight. City governments and enterprises sign cooperation agreements that specify inclusive service content and pricing mechanisms linked to local residents’ income and pension levels, thereby expanding the effective supply of elderly care services. The ultimate goal is to ensure that ordinary citizens and wage earners can access, afford, enjoy high-quality, and have confidence in these services.

What Is Inclusive Elderly Care? Inclusive elderly care services are market-supplied and policy-guided services targeted at the broader elderly population, beyond basic elderly care services.

For years, the government has taken it as its duty to ensure basic coverage and address shortcomings, focusing on providing essential elderly care services primarily targeted at specific groups. However, with the rapid aging of China’s population and rising living standards, demand for elderly care services has increasingly become multi-tiered and diversified. Relying solely on the government is far from sufficient; it is also necessary to stimulate the enthusiasm of market entities, expand the supply of elderly care services, and meet the needs of the broader elderly population.

“City” refers to municipal governments, which participate voluntarily, coordinate the planning of elderly care facilities, and introduce policy support packages. “Enterprise” refers to various types of enterprises, which participate voluntarily, undertake public welfare responsibilities as agreed, and develop inclusive service packages.

What kind of enterprises are eligible to participate in the city-enterprise collaboration? They must meet the following five conditions:

(1) Have been engaged in the elderly care service industry for more than two years, have obtained a business license (or a registration certificate for private non-enterprise units), and maintain stable operational status.

(2) Currently operating more than 500 elderly care service beds (not limited to Beijing), with nursing-care beds accounting for over 50%, an occupancy rate exceeding 70%, and a high standard of service quality.

(3) It has established internal medical institutions (such as clinics, health rooms, infirmaries, and nursing stations), or has signed cooperation agreements with nearby hospitals to open a “green channel” for integrated medical and elderly care services.

(4) Currently, there are elderly care service facilities under construction in Beijing, or projects planned for new construction (or expansion/renovation) with investment scheduled between 2019 and 2021. For projects planned for new construction in 2019, the construction land must have been secured, and preliminary procedures should be largely complete.

(V) The enterprise maintains a sound financial position, has no adverse credit records or legal violations, and demonstrates strong sustainable development capabilities.

For projects included in the special action plan, the National Development and Reform Commission will provide an investment subsidy of RMB 20,000 per bed from the central budgetary investment. Moreover, there are no restrictions on the nature of the enterprises undertaking the projects; all entities shall be treated equally, compete fairly, and be selected based on merit.

Support the participation of entities with various forms of ownership, including state-owned, private, and mixed-ownership enterprises; domestic and foreign capital; and both for-profit and non-profit organizations.

Furthermore, the National Development and Reform Commission has signed strategic cooperation agreements with financial institutions such as the China Development Bank, the Agricultural Development Bank of China, the Industrial and Commercial Bank of China, the Bank of China, and Everbright Group to support the special action, which will help further reduce financing costs for elderly care institutions.

The initiative emphasizes that municipal governments shall provide land policy support. Participating cities will “establish a dedicated land-use category for elderly care facilities, incorporate it into the overall land utilization master plan and annual land quota indicators, differentiate between for-profit and non-profit operations, and prioritize the allocation of land use plans.” “The starting price for the grant of elderly care land shall be determined based on an assessed value no higher than that of industrial or medical land in comparable locations. The land may be mortgaged, but its transfer and change of land-use category are prohibited.” “Enterprises utilizing idle facilities to develop elderly care services may proceed with construction first and subsequently apply for a change in land-use purpose.”

This initiative emphasizes that supported projects should be civil construction projects featuring in-depth integration of medical and elderly care services:

Strengthen collaboration between elderly care institutions and medical facilities;

Strengthen health management services in communities and families;

Support elderly care institutions in providing medical services;

Encourage the integrated development of medical and health institutions with elderly care services;

Encourage the establishment of institutions that integrate medical care with elderly care.

This special campaign, grounded in the actual needs of the elderly, prioritizes support for the development of two categories of service facilities:

I. Construction of the backbone network for elderly care services, developing community-embedded, distributed, small-scale, and chain-operated elderly care facilities under centralized management, as well as day care centers with nursing beds (i.e., elderly care facilities in this city with temporary respite care functions).

II. Development of Specialized Elderly Care Institutions. Establish professional institutions dedicated to long-term care, with a focus on addressing the elderly care needs of seniors with disabilities and dementia.

This initiative demonstrates the commitment to establishing a new, effective model of collaboration to support social forces in developing inclusive elderly care services by 2022, aiming for 40 nursing home beds per 1,000 elderly residents in participating cities, with nursing-care beds accounting for more than 60% of the total.