Jenny Chen, Oli Wong and Debby Yu (Taiwan)
Joyce Wen (mainland China)
On February28, 2018, the Taiwan Affairs Office of the State Council and the National Development and Reform Commission in mainland China promulgated “Several Measures on Promoting Cross-Strait Economic and Cultural Exchanges and Cooperation” (hereinafter, the “31 Measures to Benefit Taiwan”), which cover various fields such as finance, employment, education, medical service, and film and television. In the medical service, four opening-up measures which are closely tied to the medical service industry are specifically enumerated with opening-up aspects ranging from qualification examinations of medical doctors to local practice registration application in order to attract medical professionals from Taiwan to provide professional medical service services in mainland China. The following essay intends to begin with the current status of the development of Taiwan’s medical talents and medical institutions in mainland China to explore potential impact of the 31 Measures to Benefit Taiwan.
Medical talents
1.Restrictions on medical practices by Taiwanese physicians in mainland China market in early times made it unfavorable for Taiwanese doctors to access the China market
In early times, Taiwanese physicians seeking to practice in mainland China could do so by registering their practice after becoming qualified physicians in mainland China by way of “examination” or “recognition” or by applying for “short term medical practice.”
Those who seek to become qualified doctors in mainland China may choose to do so through “examination” or “recognition.” If residents in Taiwan seek to participate in qualification examinations for medical doctors in mainland China, they shall have comprehensive academic medical backgrounds in mainland China or in Taiwan or have qualified their internships in accordance with the “Law of the People’s Republic of China on Practicing Doctors”[1] and the “Circular on Issues Concerning Qualifications Examination Taken by Residents in the Taiwan Area and Residents in Mainland China Who Have Obtained Overseas Medical Academic Qualifications”[2] before they may participate in corresponding categories of qualifications examination for medical doctors in mainland China. If qualifications for medical doctors are sought not through the avenue of examination, the interested individuals may consider if they (1) had practiced in Taiwan for five years by December 31, 2007, (2) hold a license for specialty doctors, and (3) are still practicing. If so, they may choose to become qualified medical doctors in mainland China by directly obtaining a license for medical doctors in mainland China in accordance with the “Administrative Measures for Recognizing the Qualifications for Medical Doctors in Mainland China as Obtained by Doctors in the Taiwan Area” (hereinafter, the “Administrative Measures”)[3].
In addition to the above-mentioned approach to obtain qualifications for medical doctors in mainland China to practice medicine, the “Measures for the Administration of Short-term Medical Practice by Doctors from the Taiwan Area” were implemented in 2009 to declare that licensed doctors in Taiwan may apply to register their practice in order to engage in clinical diagnostic activities at medical institutions in mainland China for up to three years[4]. This provides another channel for medical practitioners in Taiwan who seek to practice in mainland China.
2.The 31 Measures to Benefit Taiwan attract medical talents by offering multiple channels for obtaining qualifications for medical doctors in mainland China and registering their practice
To attract medical professionals and talents, the access threshold and the specifically enumerated channels in which Taiwanese doctors may practice in mainland China under the medical portion of the 31 Measures to Benefit Taiwan are respectively: (1) master’s program students who have studied for one year in the field of clinical medicine in higher institutions in mainland China are allowed to apply to participate in qualifications examination for medical doctors in mainland China (Paragraphs 13 and 26); (2) those who have obtained a doctor’s license may practice in mainland China by applying to register their practice (Paragraph 27); and (3) doctors in Taiwan may choose to obtain qualifications for medical doctors in mainland China through recognition or apply to practice in mainland China pursuant to requirements for short-term medical practice (Paragraph 28).
It is noteworthy that in addition to practice registration application by individuals who have become qualified medical doctors in mainland China through examination or recognition (Paragraph 27) and to application for short-term practice registration by doctors in Taiwan (the last part of Paragraph 28), these measures beneficial to Taiwan also allow Taiwanese students studying for a master’s degree for clinical medicine in mainland China to participate in qualifications examination for medical doctors in mainland China pursuant to relevant requirements for qualifications examination for medical doctors in mainland China one year after they have studied as graduate students. For individuals who have earned a bachelor’s degree from a medical school and for Taiwanese doctors, more channels are provided for them to become qualified through qualifications examination for medical doctors in mainland China.
It should be mentioned in passing that the qualifications examination for nurses is also deregulated (Paragraph 13 of the 31 Measures to Benefit, Paragraph 20 of the “Catalogue of National Professional Qualifications Examination”, concerning the qualifications for professional technicians) under the 31 Measures to Benefit Taiwan so that doctors can bring along their nursing teams[5] and thus can seamlessly carry out their duty without being constrained by their practice habits.
Medical institutions
1.In early times, China only allowed foreign investors to set up medical institutions through joint venture or cooperation with Chinese investors and did not allow investments in the form of sole proprietorship.
In July 2000, the “Interim Measures for the Administration of Medical Institutions under Sino-foreign Joint Venture and Cooperation”[6] were implemented to stipulate that foreign investors applying to invest in medical institutions in China can only do so by way of joint venture or cooperation with Chinese medical institutions, companies or enterprises, and it is specifically stipulated that application to set up a medical institution in China which is solely owned by foreign investors will not be approved. In addition, the shareholding or equity held by Chinese investors shall not be lower than 30%, the total investment shall not be lower than RMB20 million, the term of joint venture or cooperation shall not exceed 20 years (provided that application for extension may be filed before the term expires), there shall be no affiliates, the medical fees shall be implemented pursuant to relevant state requirements, relevant provisions concerning the practice of medical institutions under the “Regulation on the Administration of Medical Institutions” and the “Detailed Rules for the Implementation of the Regulation on the Administration of Medical Institutions” shall be followed.
Until now, successful cases involving Taiwanese investment in medical institutions in mainland China include: Shanghai Chenxin Hospital established under the joint venture between Landseed International Medical Group, with which Landseed Hospital in Taiwan is affiliated, and Shanghai Power Hospital (2003), Changsha Want Want Hospital set up in Hunan by the Want Want Group (2005), Xiamen Chang Gung Hospital invested in Fujian Province set up by the Formosa Plastics Group (2008), Nanjing BenQ Hospital invested in Jiangsu Province by the BenQ Group (2008), Jen Ching Memorial Hospital[7] established in Kunshan of Jiangsu Province by the Ford Lio Ho Group and Dongguan Taixin Hospital[8] set up through funds raised by the Dongguan Taiwanese Businessman Association. As for Shanghai Ruidong Hospital (2007), which had previously been owned exclusively by Chinese investors, it was transformed into a Sino-foreign joint venture after the Taiwanese investor obtained the controlling shares of the existing medical institution in mainland China through share acquisition.[9]
2.It was not until November 2010 that medical institutions were further opened up to foreign investors by adjusting the organization of medical institutions by offshore capital into permitted quasi-foreign investment projects under the “Circular of the General Office of the State Council on Forwarding the Opinions of the National Development and Reform Commission, the Ministry of Health and Other Ministries on Further Encouraging and Guiding the Establishment of Medical Institutions by Social Capital” (Guo Ban Fa [2010] No. 58).[10] In this fashion, the restrictions on the shareholding percentage of offshore capital were gradually lifted, and pilots have been conducted for sole-proprietorship medical institutions set up in China by qualified offshore capital.
As compared with foreign investors, Taiwanese investors are eligible for more favorable policies with respect to investment in the establishment of medical institutions in mainland China, and relevant laws and regulations have been successively promulgated in mainland China. After the signing of the Cross-Strait Economic Cooperation Framework Agreement in June 2010, the Interim Measures for the Administration of Sole Proprietorship Hospitals in Mainland China by Taiwanese Service Providers[11] were promulgated in China to allow Taiwanese investors to set up sole proprietorship medical institutions in the Shanghai Municipality, the Jiangsu Province, the Fujian Province, the Guangdong Province and the Hainan Province. An applicant seeking to set up a Taiwan-funded sole proprietorship hospital is required to submit a certificate for Taiwan (medical) service provider issued by the Ministry of Economic Affairs, R.O.C (“MOEA”) to relevant authorities in mainland China. Before that, a Taiwan medical service provider is required to obtain an investment approval[12] from the Investment Commission under the MOEA. In addition, the above measures require satisfaction of the basic standard for at least Tier Two hospitals with the total investment in a Tier Three or Tier Two hospital not lower than RMB50 million and RMB20 million, respectively. However, a Taiwan-funded sole proprietorship hospital may under its discretion to be profit-oriented or non-profit-oriented and may specifically formulate different operating guidelines based on its nature. The Landseed International Medical Group was permitted in 2011 to set up Shanghai Landseed Hospital, which is the first Taiwan-funded sole proprietorship hospital in China with an investment of approximately US$23.57 million.[13]
On December 30, 2013, the National Health Commission of the PRC and the State Administration of Traditional Chinese Medicine of the PRC issued the “Several Opinions on Accelerating the Development of Socially Operated Medical Services” (Guo Wei Ti Gai Fa [2013] No. 54),[14] which expanded the territorial scope of sole proprietorship hospitals in the mainland China to prefecture-level cities nationwide with approval authority delegated to health authorities on provincial level. It should be noted, however, that the feasibility for specific prefecture-level cities is still constrained by local laws and regulations. In December 2017, the Kunshan City of Jiangsu Province conducted the fifth Kunshan Ministerial-Provincial Joint Meeting on Deepening of Cross-Strait Industry Cooperation Pilot Zones in Beijing to roll out several policies beneficial to Taiwan, including the willingness conveyed during the meeting to deregulate the establishment of sole proprietorship hospitals in Kunshan by service providers in Taiwan. It is believed that the establishment of sole proprietorship hospitals in Kunshan[15] by Taiwanese investors will be realized in near future, bringing new opportunities to medical service providers in Taiwan.
Concrete implementation of the 31 Measures to Benefit Taiwan in various parts of China
Since the 31 Measures to Benefit Taiwan came into effect on February 28, 2018, relevant authorities in some local governments have promulgated relevant implementation provisions pursuant to their gist. On March 30, 2018, the Putian City of the Fujian Province took the lead in formulating and implementing the “Implementation Opinions on the Promotion of Economic and Cultural Exchanges and Cooperation Between Putian and Taiwan” (hereinafter, the “Implementation Opinions”). Article 1 of the Implementation Opinions specifically encourages and supports investment in medical and health services in Putian by Taiwanese compatriots by developing a pilot zone for cross-strait cooperation of medical and health industries. The objective is to accelerate the comprehensive upgrade of the local medical serviceindustry by introducing high-end medicaltechnologies from Taiwan. The Matzu International Health City, which is currently being planned and constructed, is a core project for the pilot zone for cross-strait medical cooperation. Currently, the Hong Hai Group in Taiwan has been introduced to participate in the investment.[16]
The “Several Measures for Further Deepening the Economic, Social and Cultural Exchanges and Cooperation Between Xiamen and Taiwan” (hereinafter, the “Several Measures”) promulgated by the Xiamen City on April 10, 2018 promise to help medical talents from Taiwan obtain qualifications for medical doctors in mainland China and apply for practice registration and short-term practice in Xiamen (Article 41 of the Several Measures). In addition, the Several Measures also extends those favorable conditions provided in the 2011 “Overall Arrangements of the Xiamen City for Deepening the Comprehensive and Accommodating Reform and Experiments”,such as allowing the Taiwanese compatriots to set up sole proprietorship hospitals in Xiamen and canceling the total investment threshold,by further allowing Taiwan-funded enterprises and Taiwanese compatriots to set up sole proprietorship high-end elderly care institutions, and qualified Taiwanese compatriots to apply to set up individual sole proprietorship clinics and medical examination labs in Xiamen (Article 30 of the Several Measures).
On May 31, 2018, the Shanghai Municipality promulgated the “Measures for Implementing the Promotion of Economic and Cultural Exchanges and Cooperation Between Shanghai and Taiwan” (hereinafter, the “Implementation Measures”), of which a total of four articles relate to medical service industry and are oriented towards the introduction of medical talents. Article 43 of the Implementation Measures specifically provides that the manners, contents, admission line and fee standard for qualifications examination for medical doctors in Shanghai which are taken by Taiwanese compatriots are the same as mainland China examinees participating in the same category of examination. In addition, those who have obtained a license for medical doctors in mainland China are also supported to apply for the registration of their practice in Shanghai (Article 44 of the Implementation Measures), and doctors in Taiwan are allowed to apply for short-term practice in Shanghai (Article 45 of the Implementation Measures). For nurses, who are not doctors, Taiwanese compatriots are allowed to obtain qualifications for nurses in Shanghai and to apply for local practice after participating in health expertise qualifications examination (Article 47 of the Implementation Measures).
Conclusions
Based on the foregoing introduction of the current status, it is obvious that mainland China is gradually lifting restrictions on the development of Taiwan’s medical talents and medical institutions in mainland China. Coupled with the emergence of smart medical in recent times and the strong demands for the development of high-tech medicalin mainland China, the promulgation of the 31 Measures to Benefit Taiwan and implementation measures in various places has sent a clear message that Taiwan’s quality medical talents and high medical technologies will be greatly leveraged. This will indubitably bring opportunities for Taiwan medical talents and relevant enterprises in the medical service industry to access another large market. However, the 31 Measures to benefit Taiwan only represent declaratory policies and their specific implementation still requires successive promulgation of relevant enforcement rules by various local governments. For example, although the 31 Measures to Benefit Taiwan allow Taiwan’s doctors to register and practice in China, still laws and regulations in mainland China require that a hospital cannot set up a new specialty without a director-level or deputy-director-level doctor. A Taiwan-funded private hospital can hardly recruit mainland China doctors of appropriate levels from local public hospitals. Therefore, whether the level and position of a Taiwanese doctor practicingin a medical institution in mainland China can be recognized as those of mainland China doctors affects not only the practice rights and interests of Taiwanese doctors but also the feasibility of a Taiwan-funded private hospital to set up new specialties by recruiting well-known doctors from Taiwan. In addition, building a sophisticated medical serviceteam requires not only doctors but also experienced and skillful medical personnel. Although the 31 Measures to Benefit Taiwan allow medical personnel such as nurses and practicing pharmacists to take qualifications examination, still whether their scope of practice is subject to any restriction after they are qualified to practice will indirectly affect the manpower allocation and operating costs of Taiwan-funded private hospitals. In addition, although establishment of high-end elderly care institutions, individual clinics and medical examination labs are allowed in Xiamen, still implementation details such as the investment conditions that should be met and the restrictions, if any, on their establishment all require local governments to formulate relevant regulations. Therefore, before investment and practice in mainland China are sought, not only is it necessary to gain a comprehensive understanding of relevant medical administration laws, regulations and restrictions in areas where investment is sought, it is also necessary to understand if there is any special investment restriction imposed by the central and local governments on the industries to be invested in so that proper investment planning and deployment can be conducted on the premise that relevant investment risks are fully taken into consideration.
[1] Please see Articles 9 and 11 of the Law of the People’s Republic of China on Practicing Doctors.
[2] Article 1, Paragraph 1 of the Circular on Issues Concerning Qualification Examination Taken by Residents in the Taiwan Area and Residents in Mainland China Who Have Obtained Overseas Medical Academic Qualifications.
[3] Please refer to Articles 3, 6 and 10 of the Administrative Measures for Recognizing the Qualifications for Medical Doctors in Mainland China as Obtained by Doctors in the Taiwan Area and Article 1 of the Circular of the Ministry of Health and the State Administration of Traditional Chinese Medicine on Issues Concerning Qualifications for Medical Doctors in Mainland China as Obtained by Medical Doctors in Hong Kong, Macao and Taiwan.
[4] Please see Articles 2, 3, 9 and 20 of the Measures for the Administration of Short-term Medical Practice by Doctors from the Taiwan Area.
[5] Please see Mainland China’s Measures to Benefit Taiwan: Taiwanese Doctors Are Going to Test the Water, The Merit Times.
[6] Articles 2, 8, 17, 19, 22, 28 and 35 of the Interim Measures for the Administration of Medical Institutions under Sino-foreign Joint Venture and Cooperation promulgated via a directive of the Ministry of Health and the Ministry of Foreign Trade and Economic Cooperation (Directive No. 11).
[7] Ya-wen Cheng, Impact Analysis Concerning the Cross-Strait Service and Trade Agreement, the Special Statute for Free Economic Pilot Zones and International Medical Services, Taiwan Public Health Association, Taiwan Health Journal, Vol. 33, Issue 4 (2014), PP.341-342.
[8] Source: http://www.dgtba.org/plus/view.php?aid=910, last browsed on May 15, 2018.
[9] Source: http://www.mychinabusiness.com/magazine/0912/home08.html, last browsed on May 15, 2018.
[10] Article 1, Paragraph 5 of the Circular of the General Office of the State Council on Forwarding the Opinions of the National Development and Reform Commission, the Ministry of Health and Other Ministries on Further Encouraging and Guiding the Establishment of Medical Institutions by Social Capital (Guo Ban Fa [2010] No. 58).
[11] Articles 10, 11, 15, 16 and 35 of the Circular on Issuing the Interim Measures for the Administration of Sole Proprietorship Hospitals in Mainland China by Taiwanese Service Providers.
[12] Website of the Department of Commerce of theMOEA; source: https://gcis.nat.gov.tw/mainNew/subclassNAction.do?method=getFile&pk=653, last browsed on May 15, 2018.
[13] Source: http://www.ecfa.org.tw/ShowDetail.aspx?nid=1121&pid=1044, last browsed on May 15, 2018.
[14] Article 3, Paragraph 1 of Several Opinions on Accelerating the Development of Socially Operated Medical Services (Guo Wei Ti Gai Fa [2013] No. 54).
[15] Source: https://www.ettoday.net/news/20171221/1077175.htm, last browsed on May 15, 2018.
[16] Source: http://fjrb.fjsen.com/fjrb/images/2018-04/19/14/2018041914_pdf.pdf.