Operation of elderly care institutions in China – Nursing home market

Operation of elderly care institutions in China - Nursing home market environmentDec. 11 – Elderly care is a giant market in China, the elderly residents are progressively growing; the demand for nursing home is raising high in China. Private investors have been active in the Chinese nursing home market, what is possible model for nursing home market? How about the market environment and operation of elderly care institutions in China? Why making it a success is a challenging task?

The market environment and operation of elderly care institutions in China

Recently, China issued related policy; higher quality standards set for elderly care institutions. Ministries responded to a series of recent public concerns, including administrative approvals, elderly care institutions which stated that, Care homes for the elderly are required to help their residents are better connected with the outside world by providing enhanced communication facilities and services, according to a draft drawn up after a public survey on basic quality standards for care homes.

The draft, released by the Ministry of Civil Affairs on Oct 19, 2017 said that staff members should treat residents with dignity and respect and protect the private information of the residents and their visitors. In addition, the living environment and facilities should be improved to enhance care for the elderly, the document said. Government intervention has kept the price of elderly care relatively affordable low compared to other housekeeping businesses to ensure it is reasonable,

Currently, 18 provinces and municipalities in China offer subsidies for people above a certain age. Beijing provides a 100-yuan (HK$126) voucher every month to people more than 80 years old to buy either food or services. But the elderly face many restrictions in using the vouchers, and the care companies often wait a long time to get reimbursed. The State Council pledged to set up a multi-layered care system by 2020, largely based on in-house services, supplemented by community care centers and nursing homes. China elderly care market insider indicates that policy breakthroughs are what the business needs most.

Possible model for nursing home market in China

For elderly care, many people think it is merely housing when in reality it sits between housing and healthcare. As for China, elderly care sector still in the pursuit of fitting in Chinese market models. Who is eligible to enter the nursing home in China? Under the State Council’s plan in China, elderly who cannot work, do not have a source of income or a family support network will be eligible for admittance to government-funded nursing homes, either at no charge or for a low fee.The policy is clear, but the reality is cloudy. Although, to get a nursing home approved in China is not so complicated procedure because it is a known entity. The government also move to reduce the administrative costs to lower the barrier to entry for private or foreign invested to the elderly care market, including in-home services and nursing homes.

While recent years have seen a rising demand for high-end nursing homes for the urban rich, the most urgent need was for basic home-based elderly care for families with moderate-level incomes, experts said. Needless to say that the businesses of China elderly care institutions still in its infancy, what is the future and opportunities for the nursing home market in China? From Chinese culture, healthcare environment, and market demand perspectives, and local operators and international investors will craft and create models fit in the Chinese.

The levels of elderly care are different in the West countries, there are some models are in practicing: independent living, assisted living and skilled nursing. But for elderly care in China isn’t in the stage of such complications. The lines between the different models in China do not need to be so obvious. According to a local Chinese nursing home report that two/third of elderly residents are handicapped, they need help. In this case, assisted living model in China might applicable.

In China, key players in the market are taking two approaches, starting small with a potential expansion that only provides one type of service, or starting at a very large scale with many active adult or independent living units. Launch small allows the owner/operator to try-out their operational structure in the Beginning stage. A large-scale development has a very large straight investment, but the remuneration is higher because of the economies of scale. Although what’s the best suitable model in China is not yet known, but lends itself to the mid- to large-scale development as a senior care model has great promise in China.

Opportunities for the nursing home market in China?

Latest data from the Ministry of Civil Affairs show the number of people aged above 60 in China will exceed 200 million by year’s end. By 2020, the figure will exceed to 243 million, and hit 300 million five years later. The mainland last year had 44,000 elderly care institutions, which provided beds for 4.15 million people, according to a related report. A major challenge: qualified employees. Training of elderly care giver, improve the quality of elderly care in China present a chance for nursing home market in China. Newly trained nurses are in demand. Business owners’ faces in the care-industry include finding qualified registered nurses and home health aides. As the number of home health care businesses increase, the demand for qualified employees is high.

China elderly market present larger opportunities for foreign elderly care institutions or experienced nursing homes owners who run successful models. For those who are interested in China elderly care market, there are two related Report on China’s Elderly Care Services Industry Report 2016-2019 and China Nursing Home Facilities Industry Report available upon request, please contact with DCCC, or email to: info@dccchina.org

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