High-Cost Providers in China for Expats
Many private hospitals categorized as high-cost providers (HCPs) are favored by foreign expatriates, medical tourists, and affluent Chinese individuals due to the reputation and exemplary services these facilities provide.
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High-cost providers are likely to be found in major cities for expats and internationals such as Beijing, Shanghai, and Shenzhen. Accessing any services from them can leave your pocket empty, only without securing international health insurance.
Wonder what are the differences between HCPs/Non-HCPs? Are you unsure how the difference influences your decision when securing health insurance?
In this Pacific Prime article, you will learn the reason China has categorized private hospitals into HCPs and non-HCPs, how you can access these facilities as an expat with international health insurance and the considerations when securing coverage for any treatments and services in HCPs.
What is a High-Cost Provider (HCP)?
High-cost providers are essentially private hospitals that charge more than an average private hospital for added level of services like English-speaking staff, personalization of healthcare experiences, and reputation of the medical experts or the particular service model that the facility follows.
The existence of high-cost providers significantly influences your health insurance decisions. When you select a private hospital that is categorized as a high-cost provider, your health insurance carrier is likely to charge a premium that is 15-35% higher than coverage for regular providers during enrollment.
Healthcare System in China
China’s healthcare system consists of the public and private sectors, and most of the population is covered by public health insurance. The central government sets national health legislation and local governments are responsible for providing health care services to their residents.
For expats, access to public health insurance depends on factors like residency status and place of employment. Some rural areas may not cover foreign residents under public plans. The public healthcare system is also associated with long wait times and potentially low standards of care.
As a result, most expats opt to purchase private international medical insurance. This helps cover expensive out-of-pocket expenses. Additionally, private hospitals cater more directly to expat needs through multilingual staff and sophisticated equipment.
Emergence of High-Cost Providers
The emergence of high-cost providers can be attributed to these reasons – demand from wealthy patients, healthcare reform, underfunding of public hospitals, fee-for-service system, and regional disparities.
Demand from Wealthy Patients: Rapid economic growth created a large affluent class seeking private, premium care. HCPs catered to this demand with VIP treatment and perceived superior quality.
Healthcare Reform: China has set to promote the development of private hospitals, and encourage hospitals to cooperate with their private counterparts in developing Internet Plus Healthcare models and carrying out remote medicare services.
Underfunding of Public Hospitals: Years of low government healthcare spending left public hospitals under-resourced. HCPs filled the gap by investing in advanced technology and specialist training.
Fee-for-Service System: China relies heavily on out-of-pocket payments, incentivizing over-testing and procedure-based bills. This enabled HCPs to profit through high markups and doctors’ commissions.
Regional Disparities: Greater investment flowed to major cities, allowing their private hospitals to charge much higher fees than rural counterparts for the “premium” of an urban address.
How Do You Know if a Facility is a High-Cost Provider (HCP) or not?
It is true that every HCP charges patients a price comparatively higher than non-HCPs, for instance, consultations and procedures are two to three times higher than average rates, but whether or not the facility is an HCP ultimately depends on insurance providers themselves.
Some significant signs of a facility being an HCP are the hospital being a specialty hospital, being located in a top-tier city, and sky-high treatment prices.
Medical treatment in China can be prohibitively expensive, insurers therefore create a list of what they consider to be HCPs, and you will need to pay a higher premium if you wish to be covered at these expensive high-end medical facilities.
Each insurer has its own HCP list, and these can and are updated at any time. A good example is United Family hospitals and clinics in Shanghai have exited the list of HCPs in MSH International’s list.
| Case Study
Starting from October 1, 2021, Shanghai United Family Hospital and clinics will be removed from the list of High-Cost providers in MSH insurance plans, effective after October 1, 2021. The removal of the hospital from the HCP list enabled MSH International to cover medically necessary L-CAR cell immunotherapy. |
Accessing Services at High-Cost Providers (HCPs)
The most rational way to access services at high-cost providers is through health insurance, and HCPs are so expensive that you would never want to be paying the bill out-of-pocket. With that said, it is still considerably pricey even though paying insurance premiums only.
That’s why you would need to control your medical costs to ensure that you have access to necessary services without paying for services that are not necessities.
Controlling Your Medical Cost
To control your medical cost, the first question that you need to consider is: do you want to access the HCP network?
If not, then you can secure health insurance with a discounted premium of 15 to 35% depending on the insurer, probably on the higher edge of the spectrum at around 25%.
For those who want to access the HCP network, there are two ways to do it. The most popular option (84% of expats choose this option) is a 20% copayment to the cost of treatment received at HCP facilities, and receive a discount on the premium on the middle to lower edge of the spectrum at 15 to 20%.
This option makes the most sense because only HCPs that provide specialty treatment are demanded by the general population. Other than that, statistics do not reliably show HCPs improving medical outcomes.
The remaining 16% of the expat population, mostly from Beijing, choose to pay for full coverage for HCPs. This is because there are not many quality treatment facilities nearby that fall under the category of non-HCPs, so they are likely going to visit an HCP hospital or clinic.
Note: Adding a deductible is not a popular option in China as it complicates the direct billing process with hospitals and clinics. Expats prefer convenience and avoid potential hassles while enjoying pretty much the same price reduction.
Advantages of Working with a Broker to Secure Health Insurance
One of the benefits you get from working with a broker is you can receive unbiased advice on plan recommendations and price comparisons. Brokers, as an intermediary, do not work for a particular insurer so we have the advantage of providing you potential options across worldwide insurers.
Additionally, no extra costs will be incurred when using broker services. Broker’s plans are sold at market price or lower. Without paying a penny, you will have your inquiries promptly addressed, and your claims process assisted. They are always on their clients’ side when dealing with insurers.
Finding the perfect health insurance solution for your requirements can be challenging. The vast information available in the market and on the Internet is overwhelming. With the assistance of an insurance expert can streamline the complicated process and give you peace of mind.
Frequently Asked Questions
How can I tell if a hospital is considered a high-cost provider?
The best signs are if it’s a private hospital, specialty hospital, or located in a top-tier city. You can also check pricing online – if consultations and procedures are 2-3x higher than average rates, it’s likely an HCP. You can also consult your insurer or broker for the list of HCPs.
Will my international health insurance cover treatment at HCPs?
It depends on the plan, but generally, HCP costs are excluded from basic public and commercial insurance in China. Some expat plans may cover part of HCP bills but expect deductibles and copayments to be much higher than at public hospitals.
If I want to use an HCP, how can I control medical costs?
Ask for quotes and itemized bills upfront, negotiate if possible, and avoid unnecessary tests or long hospital stays. Using HCPs only when truly requiring their specialty services can save money versus making them your primary provider.
Conclusion
Accessing treatment from high-cost providers can be costly. It is important to research your preferred service provider based on your location and preference. After all, HCP is more about your hospital experience than improving the actual medical outcome.
With all the available insurers for health insurance coverage in China and their respective list of HCP/non-HCP providers, it is difficult for you to compare them and make informed decisions on which to secure. And this is why you might consider working with a broker.
Pacific Prime is a reputed and experienced broker who provides insurance solutions to individuals and families with unique needs. Our team of expert advisors can offer you a detailed comparison of insurance plans, and get you quoted from international and trusted insurers like Cigna for your budget.
Contact us today to get insured in China!
If you start a family and want to ensure the healthy growth of your child, feel free to learn more about how to do so with our article on Parenthood and Pediatric Care in China for Expats.
Since joining Pacific Prime, Eric was exposed to a new world of insurance. Having learned about insurance products extensively, he has taken joy and satisfaction in helping individuals and businesses manage risks and protect themselves against financial loss through the power of words.
Although born and raised in Hong Kong, he spent a quarter of his life living and studying in the UK. He believes his multicultural experience is a great asset in understanding the needs and wants of expats and globe-trotters.
Eric’s strengths lie in his strong research, analytical, and communication skills, obtained through his BA in Linguistics from the University of York and MSc in Teaching English to Speakers of Other Languages (TESOL) from the University of Bristol.
Outside of work, he enjoys some me-time gaming and reading on his own, occasionally going absolutely mental on a night out with friends.
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