Breaking the Ice: How In-Service Doctors Navigate Clinic Establishment Amid Policy Shifts

On February 28, the National Health and Family Planning Commission (NHFPC) issued “Order No. 12 of the National Health and Family Planning Commission of the People’s Republic of China,” announcing the adoption of the NHFPC’s Decision on Amending the Detailed Rules for the Implementation of the Regulations on the Administration of Medical Institutions (hereinafter referred to as the “Implementation Rules”), which shall come into force on April 1, 2017.

One of the provisions concerns the relaxation of eligibility criteria for applicants establishing medical institutions, allowing in-service medical personnel to set up such facilities. The clause stating that “medical personnel who are currently employed by medical institutions, have retired due to illness, or are on unpaid leave shall not apply to establish medical institutions” has been deleted.

Following the revisions, the "Detailed Implementation Rules" regarding the qualifications for applicants establishing medical institutions will focus primarily on medical quality and safety, with an emphasis on reviewing the operational conditions and credentials of the applicants. This approach is conducive to fully leveraging the professional expertise of physicians and stimulating their initiative in entrepreneurial ventures; it helps promote private investment and accelerate the development of privately run healthcare services; and it contributes to further improving the healthcare service system, fostering a diversified landscape of medical service provision, and better meeting the public’s diverse healthcare needs.

This change means that in-service medical personnel can now apply to establish medical institutions. The state has finally "relaxed" restrictions on in-service physicians applying to set up medical facilities, and further encourages doctors to start their own businesses, leveraging their professional expertise.

As public hospitals gradually transition to a record-filing system for staff quotas, medical professionals are regaining their status as free agents. With the national government advocating for multi-site practice, the day when doctors can balance hospital employment while running their own clinics is just around the corner.

Ideals are beautiful, but reality is cruel!

Perhaps some clues can be gleaned from the policy on physicians’ multi-site practice!

In 2009, the former Ministry of Health had already initiated pilot programs for physicians’ multi-site practice in certain regions. In 2011, it issued the “Notice on Expanding the Scope of Pilot Programs for Physicians’ Multi-Site Practice.” On January 26, 2014, the National Health and Family Planning Commission released the “Several Opinions on Physicians’ Multi-Site Practice (Draft for Comment)” along with its interpretation. The overall direction of these policies was to: promote the rational mobility of physicians; standardize physicians’ multi-site practice; and ensure medical quality and safety.

Subsequently, in January 2014, the Beijing Municipal Health Bureau drafted a new plan to liberalize physicians’ multi-site practice, positioning Beijing at the forefront of such reforms nationwide. This proposal is among those closest to the concept of free medical practice in China, as it no longer includes “approval from the primary employer” as a prerequisite for physicians engaging in multi-site practice.

According to an investigation by Shaanxi Daily, as of November 2016, nearly one year after the introduction of the “Implementation Opinions on Multi-Site Practice for Physicians in Shaanxi Province (Trial),” the “Administrative Measures for Multi-Site Practice of Physicians in Xi’an City (Trial)” was released. Two months later, reporters learned from the Medical Administration and Healthcare Management Division of the Xi’an Municipal Health and Family Planning Commission that only one individual had submitted relevant application procedures, while several others had made inquiries.

In fact, pilot programs for physicians’ multi-site practice had already been launched in Shaanxi Province before the release of the “Implementation Opinions on Physicians’ Multi-Site Practice (Trial)” in March 2016. As early as 2012, Xi’an City encouraged doctors to engage in multi-site practice in Yanliang District and Zhouzhi County, but virtually no applications were submitted.

A bolder approach has been adopted by Shenzhen, which stipulates that registered physicians do not need the approval of their primary practice site to engage in multi-site practice.

In November of the same year, following the issuance of regulations on physicians’ multi-site practice, Yimi Research conducted a survey among 4,739 licensed physicians of varying professional ranks across different regions of China. Approximately one-fifth of the respondents reported having experience with multi-site practice. Why do physicians remain silent and reluctant to pursue mobile or independent practice, even when given the option to practice freely?

The primary obstacle to multi-site practice stems from conflicts of interest between the physician’s primary employer and the physicians themselves. With major hospitals operating at full capacity, primary employers naturally expect their doctors to devote themselves entirely to work within their institutions. On the other hand, physicians find it difficult to forgo the various benefits offered by public hospitals, as key career milestones—such as professional title evaluations and the establishment of academic standing—must be achieved within the state-run system.

The ultimate outcome is that most physicians either leave their positions to start their own ventures, such as establishing physician groups, or join internet healthcare companies; otherwise, they remain content with the status quo.

So, compared with multi-site practice, what problems do incumbent doctors actually face when opening clinics or hospitals?

First is capital. For practitioners of Western medicine, establishing a private clinic cannot rely on a single physician; one must also account for laboratory testing and diagnostic procedures. Selecting a location, purchasing equipment, and hiring staff collectively entail substantial costs. How many physicians truly possess the financial strength to support such an endeavor? Unless backed by corporate investment, most physicians would likely not consider it. Even with corporate funding, medical practice remains a technology-intensive field, yielding relatively limited financial returns. It is understood that most private clinics currently operate in a state of mere survival, struggling to achieve profitability.

"As there are currently no third-party laboratory and diagnostic service providers in China, the scope of business for clinics is also quite limited."

Furthermore, addressing liability and risk poses a significant challenge. Many physicians question whether private clinics have sufficient capacity to assume responsibility, given that in public hospitals, medical malpractice liabilities are often borne collectively by the entire department or even the whole institution. Supporting policies are urgently needed, such as determining whether private clinics can be included in the medical insurance reimbursement system.

Finally, there is the issue of physicians’ energy levels. Taking large tertiary Grade A hospitals as an example, it is normal for an average physician to see 100 to 80 patients per day, with peak volumes reaching around 200, leaving them so busy that they have no time to drink water, eat, or use the restroom. Although physicians are theoretically subject to an eight-hour workday and a five-day workweek, in reality, it is quite common for frontline doctors to be unable to take the dozens of days of annual leave they accumulate over the year.

Renowned physicians and specialists at public hospitals, in addition to conducting daily outpatient clinics, must also juggle multiple responsibilities such as conducting research, mentoring students, delivering lectures, and attending conferences, making it quite challenging for them to balance these demands.

For multi-site practice or opening new clinics, the majority are retired physicians. Currently practicing doctors genuinely fear that they “may earn the money but not live to spend it,” so nearly all those engaged in multi-site practice or running clinics are retired senior physicians.

For a long time, clinics in Taiwan and Hong Kong have served as benchmarks for medical clinics in mainland China. Anyone who has traveled to Hong Kong or Taiwan is always deeply impressed by the local clinics.

What many fail to realize is that Taiwan once faced similar dilemmas in its healthcare system. It was only after the implementation of National Health Insurance, which treated all medical institutions equally, that private hospitals and clinics began to flourish.

In Taiwan today, clinics are ubiquitous, with large ones boasting scale and small ones offering unique specialties. Public hospitals often involve long waiting times and indifferent staff, whereas private clinics offer flexible appointments, attractive and patient front-desk personnel, and courteous doctors—all at lower costs than major hospitals. Consequently, more people are choosing to seek medical care at clinics.

So, what lessons can physicians in mainland China draw from the development of clinics in the Taiwan region when establishing their own practices?

1. It is very simple for doctors in Taiwan to open a clinic; it takes only three to five days from application to obtaining the license,So there are many clinics.

2. Word-of-mouth promotion, striving to improve medical quality,Refrain from engaging in malicious competition. In Taiwan, there is a clinic that has been operating for over a decade. It remains unassuming, with no prominent signage outside. Nevertheless, many physicians from National Taiwan University Hospital do not see patients at their own institution but instead refer them to this clinic. Many Taiwanese Americans also return specifically to seek care there.

3. Control patients' medical costs and treat them with the same care as one's own family.Dr. Zhou, another dentist at the clinic, has developed a comprehensive treatment system based on systematic theories of international implantology, achieving a success rate of over 99%. The procedure is entirely painless, and the treatment cycle has been reduced from three to four months to just one and a half months. Furthermore, by optimizing the treatment workflow, costs have been controlled, making the pricing highly affordable.

4. Mid-to-high-end clinics are defined not by their interior design, but by the quality of medical care.For example, Dr. Liu Xingcheng’s Clinic in Taiwan. The consultation rooms are small and compact, with simple decor and minimal furnishings. However, the waiting area is packed with patients; there are not enough chairs, so many people are standing while they wait. Despite the crowd, it is remarkably quiet. All staff members are busy, and clinical operations proceed in an orderly manner.

Take the administration of anesthesia as an example. While most clinics simply administer the injection, her clinic follows over 50 specific protocols for this procedure alone, ensuring that every patient remains highly comfortable throughout the process.

Complete follow-up records are maintained for all patients, with free assessments conducted every six months—a practice that has been upheld for over two decades.

Perhaps, although policies supporting practicing physicians in establishing clinics or hospitals have not yet been rolled out, this is ultimately a beneficial measure to promote tiered diagnosis and treatment and serve the public.