Why foreign nursing home operators struggle to make a profit in China
19-Aug-16, South China Morning Post
China’s ageing population has attracted foreign elderly-care services providers to the country but they are struggling to make profits despite the market offering the largest number of senior citizens in the world.
%20South%20China%20Morning%20Post.jpg "Why foreign nursing home operators struggle to make a profit in China (c) South China Morning Post")
Image: South China Morning Post
Cascade Healthcare, a US nursing home operator, is profitable in China, six years after it began operating in the country. Japan’s Nichii Gakkan Co, operating in China since last year, is still trying to break even.
Haitong Securities analyst Yu Wenxin wrote in a research report that “surging demand and limited affordability” was the major problem facing China’s elderly-care industry today.
In 2012 the average annual disposable income for an urban Chinese was RMB24,600, while the average price for a bed in a nursing home was USD42,400 per annum. The absence of tailored insurance schemes also discourages elder Chinese to spend money on health care.