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Still recovering from heavy spending during the pandemic, hospitals are squeezed by a slumping economy and government efforts to curb health care spending.
Feb. 20, 2025, 10:24 a.m. ET
Legal warnings posted on the door of a private, for-profit hospital in eastern China tracked its descent into financial failure.
Huiren Hospital in the city of Suqian was warned for failing to pay employees. Four months later, a judicial summons said it still had not paid back wages. Finally, in September a paper taped across its entrance declared the building closed.
The hospital, once known for treating men with infertility or sexually transmitted diseases, had been hollowed out. The furniture and equipment were gone. There was no staff.
Public and private hospitals across China are suffering financially. During the Covid-19 pandemic, their expenses swelled from the enormous cost of mass testing — a core component of the government’s campaign to prevent the spread of the coronavirus. At the same time, hospitals generated less revenue because patients avoided crowded waiting rooms for fear of contracting the virus.
After pandemic restrictions lifted, hospitals encountered a new problem: an economy slumping from a collapse in the real estate sector. People put off noncritical care to save money, and local governments failed to provide much-needed financial support to public hospitals.
Hospitals are also facing a more fundamental challenge. As China’s population ages, health care costs are increasing faster than the money flowing into the country’s insurance funds. The government, in turn, is engaged in a campaign to reduce spending. Hospitals have been left in the lurch when insurance has not fully reimbursed them for certain procedures or medications.
