Facing an Aging Population and Financial Challenges, Hospitals in China Are Converting to Senior Care Facilities
A case study made by Luoyang government in Henan province
I have always had an interest in reading local official research documents. First, compared with the central level document, it provides a more “grassroots angle” of viewing problems and the way they get things done. Second, it is enriched with cases rather than theories. It’s just more practical. Third, it has a specific format and is easy to read after you get familiar with it. For today’s episode, I bring the study made by the Luoyang government in Henan province(in the very middle of China). It studies the transformation of “Secondary hospitals“ in the region and gives some policy suggestions to the Luoyang government.
Source: https://mp.weixin.qq.com/s/xjigOOLs2embN5C5QpnH7w
This report was published by the official WeChat account of Luoyang Municipal Committee Policy Research Office; I also translated one of the previous reports published on it, talking about LGFVs. Feel free to check:
So, before we go into the report, what are “Secondary hospitals“?
According to the Ministry of Health, Chinese hospitals are classified into a 3-tier system based on their ability to receive patients and conduct research. Which are Primary, Secondary, and Tertiary hospitals.
For Primary hospitals, they are basic healthcare facilities that provide preventive care, basic medical services, and rehabilitation services to a community-level population.
For Tertiary hospitals, they represent the highest level of medical institutions in China, serving as regional and national medical centers. Usually concentrated at the provincial economic center or first-tier cities like Beijing and Shanghai. They have the most advanced medical equipment and services, and they are also famous for conducting significant medical research.
Secondary hospitals are mid-level regional healthcare institutions that provide services for a region, taking in referrals from primary hospitals and also taking some degree of teaching and research.
Secondary hospitals were described as the backbone of the Chinese medical system; however, that middle position also put it in a relatively awkward position. Patients typically choose primary hospitals for minor ailments but bypass secondary facilities in favor of tertiary hospitals for serious conditions. This "hollowing out" of secondary hospitals has forced them to seek new survival strategies, with many now providing integrated healthcare and elderly care services.
Picture of a facility at Yiyang County in Luoyang City provides integrated healthcare and elderly care services
Below are four examples picked by the Luoyang Municipal Committee Policy Research Office. Two of them are local examples; the other two are from other provinces.
The Third People's Hospital of Yiyang County(a county under the administration of Luoyang)
Transformation of Development Approach
The Third People's Hospital of Yiyang County, formerly a township health center, had relatively weak capabilities and lacked distinctive medical services, facing significant survival pressures. To overcome these challenges, the hospital ultimately determined its development direction as "establishing a specialized geriatric hospital and implementing integrated medical-nursing services." Building upon the upgraded original Wenming Road campus (township health center), the hospital subsequently developed the Lingshan campus (medical-nursing integration center) and People's Road campus (a comprehensive geriatric hospital). The township health center primarily provides basic medical and public health services, the comprehensive geriatric hospital offers treatment, rehabilitation, and health promotion services, and the medical-nursing integration center focuses on providing full-cycle integrated care for disabled and semi-disabled elderly.Service System Enhancement
The hospital established an elderly health assessment center to strengthen physical and cognitive function evaluations. After hiring new professional medical teams, they are now able to provide medical care for disabled, semi-disabled, and chronically ill elderly; short-term care and rehabilitation services for those recovering from illness or fractures; and hospice care for end-stage patients, meeting diverse medical and nursing needs. The hospital signed service agreements with six community centers, 16 elderly homes, and two senior apartments in the county, achieving comprehensive coverage of "institutional + community + home-based" services.Exploration of Medical-Nursing Bed Switching
They solved a major problem: Before, elderly residents had to go through complicated procedures to switch between nursing care and medical treatment. Since 2022, they can now stay in the same bed while receiving different types of care and switch between medical care and nursing care easily. They can also use medical insurance for both services, get treatment when sick, and regular care when healthy.
Luoyang New Mile Senior Hospital
The hospital, formerly the state-owned CITIC Heavy Industries Staff Hospital, went through privatization during the 2016 reforms. After finding out that over 20% of Jianxi District's population was over 60 years old, with high demand for medical care and integrated medical nursing services, the hospital transformed itself into a senior hospital + elderly care center.
The hospital invested over 3 million yuan in age-friendly facility renovations. Considering the characteristics of elderly patients, such as declining physical functions and multiple concurrent conditions, the hospital added specialized departments including geriatrics, rehabilitation nursing, and elderly care. Through external recruitment and internal training, they built a professional team of geriatric physicians, senior care nurses, and elderly care specialists to effectively meet the special medical needs of the elderly population.
To promote smooth transitions between medical treatment and elderly care, the hospital established a two-way conversion mechanism between medical departments and the elderly care center. They set standards for converting between medical and nursing beds, implementing bed transitions based on assessments of elderly patients' changing conditions. They also improved work processes and emergency plans, ensuring real-time information sharing between medical and nursing services for seamless integration.
The hospital expanded its services into the community by establishing "Neighborhood Clinics" in four communities, including Xiyuan and Zhong'er communities. They pioneered "home hospital ward" services and launched a "menu-style" outpatient service through the "Healthy Luoyang" platform. Additionally, they signed healthcare service agreements with 12 nearby elderly care institutions, creating fast-track medical access and establishing health records for their residents.
As of now, the New Mile Senior Hospital has successfully achieved Tertiary hospital status. Their elderly care beds maintain a stable 100% occupancy rate, and the hospital has achieved balanced operations with sustainable development.
Xiangtan Sixth People's Hospital (a city at Hunan Province)
From a nearly bankrupt secondary hospital to a national model for integrated medical and elderly care, Xiangtan Sixth People's Hospital treats major illnesses, manages minor conditions, provides care for the healthy, supporting home care, and offers end-of-life services. The hospital provides integrated medical-nursing services and has built a comprehensive "medical-nursing-rehabilitation-care" service system. To date, it has served nearly 50,000 disabled, dementia, and terminally ill elderly patients, maintaining an annual occupancy rate above 95% and generating annual revenue exceeding 100 million yuan.
a. First, they identified their niche advantage. Originally the Xiangtan Workers' Sanatorium, the hospital initially attempted to develop as a general hospital but struggled to succeed. In 2009, its annual revenue was less than 3 million yuan, facing talent loss and operational stagnation. After extensive research, the hospital's party committee recognized that Xiangtan had a high elderly population, substantial demand for elderly care services, and a lack of professional medical nursing institutions. The hospital had strong technical and talent foundations in rehabilitation medicine and medical care, giving it a competitive advantage in providing integrated medical nursing services. Therefore, they set strategic goals to become a tertiary hospital with specialized rehabilitation and a first-class medical nursing institution, promoting standardized management, professional teams, standardized services, and age-friendly environments. They have now developed multiple integrated medical nursing models, including "continuous care," "medical-assisted care," "short-term care," and "smart care."
b. Second, they innovated in talent development. The hospital became the first public hospital nationwide to establish a dedicated elderly care nursing department responsible for managing, training, and deploying nursing staff. They set market-competitive salaries and created career advancement paths to enhance job attractiveness and stability. The hospital partnered with institutions like Xiangtan Medical and Health Vocational Technical College to establish training facilities and created China's first "medical-nursing order class,"(“医养订单班”) cultivating young, professional healthcare talent.
c. Third, they effectively utilized long-term care insurance policies. As one of Xiangtan's first designated long-term care insurance service providers, the hospital actively implements these policies. For severely disabled individuals who pass disability assessments, 70% of basic nursing care costs are covered by long-term care insurance funds. This significantly reduces the financial burden on disabled elderly and their families, encouraging more seniors to choose the hospital's integrated medical-nursing services and further driving the development of their medical-nursing integration business.
Dongkeng Hospital of Dongguan（a city in Guangdong Province）
It’s the town's only secondary hospital. Previously, the hospital faced low bed turnover rates due to a lack of medical nursing beds and elderly patients being unable to be discharged promptly after treatment. To address this issue, in 2017, the hospital established the Dongkeng Hospital Nursing Institute as a medical-nursing care facility managed under a "hospital-within-hospital" model. They converted nearly 50% of their beds into integrated medical nursing care beds specifically for elderly patients, promoting positive development of the hospital.
a. First, they clarified their functional positioning. Dongkeng Hospital made "medical-nursing services" a key strategic focus and development direction, establishing geriatrics as their leading discipline while promoting the development of traditional Chinese medicine, rehabilitation, orthopedics, internal medicine, and other specialties. They implemented the "Implementation Plan and Detailed Rules for Promoting Geriatric Specialty Development" and improved their "professional medical care, specialized elderly care" service system, comprehensively enhancing their geriatric medical service capabilities and building a cluster of advantageous specialties.
b. Second, they cultivated a professional team. The hospital invited national and provincial experts and professors to provide guidance and teaching, training over 40 geriatric medical professionals. They established a geriatric specialty training team and trained and assessed over 200 elderly care nurses. They strengthened cooperation with Guangdong Medical University, Dongguan Polytechnic, and other institutions, accepting student interns to reinforce their professional team.
c. Third, they improved their coordination mechanism. The hospital and nursing institute established an efficient coordination mechanism with interconnected medical information systems, shared medical resources, and close cooperation between medical staff. Minor conditions are handled at the nursing institute, while urgent and severe cases can be transferred to specialized hospital departments within 10 minutes. More serious cases are referred to specialist alliances or medical consortiums for transfer to higher-level hospitals. This essentially achieves the goal of "minor illnesses treated within the facility, major illnesses quickly referred," providing elderly patients with comprehensive, continuous integrated medical nursing services covering preventive healthcare, treatment during illness, rehabilitation nursing, stable-period daily care, and end-of-life hospice care.
Below are some policy suggestions given to the Luoyang government. The original ver also gave some suggestions to local secondary hospitals, but I skipped that part due to significant overlap with the governmental policy suggestions.
Secondary hospitals should establish clear functional positioning by strengthening research and assessment of their current development status and core advantages. Based on surrounding population demographics and healthcare resource distribution, hospitals should be guided to clearly define development directions and strategies according to local conditions. They can provide medical-nursing integration services by adding relevant departments or transitioning to private medical-nursing institutions, increasing both economic and social benefits for sustainable long-term development. In areas with higher aging populations and abundant medical resources, hospitals may convert to geriatric specialty hospitals, rehabilitation facilities, or elderly care institutions. In regions with limited medical resources and insufficient medical-nursing services, hospitals can expand by establishing rehabilitation medicine departments, elderly care nursing departments, or related facilities to develop new growth opportunities.
Policy support should be strengthened by establishing long-term multi-department cooperation management mechanisms to collaboratively resolve various policy bottlenecks encountered by secondary hospitals in implementing medical-nursing integration. Regarding the bed conversion issues reported by some hospitals, active exploration of standardized mechanisms for switching between elderly care and medical beds should be conducted, studying and promoting successful insurance pilot experiences to enable needs-based allocation of medical and elderly care resources. Given the long-term medical-nursing integration needs of disabled and semi-disabled groups, communication with provincial departments should be accelerated to initiate long-term care insurance programs and encourage private sector participation in offering long-term care insurance products, reducing pressure on families and providing support for disabled elderly.
Talent development should be reinforced by supporting secondary hospitals in building professional training teams through internal selection and external recruitment. Focus should be placed on geriatric medicine, rehabilitation therapy, and daily care, strengthening systematic training of existing medical staff to enhance their comprehensive service capabilities and better meet medical-nursing integration development needs. Hospitals should be encouraged to collaborate with vocational schools in establishing practical training bases, actively exploring "order-based" training models that combine theoretical learning with practical operation to cultivate more versatile medical-nursing service professionals. Regular universities and vocational schools should be encouraged to add medical-nursing integration-related majors and courses, strengthening the cultivation of professionals in geriatric medicine, rehabilitation, nursing, and health management while gradually expanding enrollment in related majors.
Coordination and linkage should be enhanced by encouraging secondary hospitals to actively participate in urban medical groups and county medical alliances, strengthening business connections with tertiary hospitals and primary healthcare facilities, and improving two-way referral mechanisms. Secondary hospitals should be encouraged to sign medical-nursing cooperation agreements with elderly care institutions, providing medical consultations, health guidance, care guidance, and medication guidance to extend medical-nursing integration services to more elderly groups. Support should be given to hospitals in forming home visit service teams, adopting "online appointment + offline service" models to provide services such as home blood collection, tube care, and capability assessment, allowing elderly people to enjoy quality medical-nursing integration services without leaving their homes. Secondary hospitals should be supported in participating in smart medical-nursing platform construction, accelerating the promotion of smart elderly care terminals to monitor elderly health data in real-time, promoting medical information sharing, and providing more convenient and efficient medical-nursing integration services.