More Firms Join the Asian-Healthcare Gold Rush

(MoneyWatch)  A little over a week ago, I noted the oddness -- or so it seemed to me at the time -- of the Seattle firm Columbia Pacific raising $325 million to invest in "U.S.-style healthcare" in Asia. As it turns out, though, Columbia Pacific is but one recent entrant in what FierceHealthcare terms an "Asian healthcare investment stampede." Some of the recent plays include:

• China Health Care, a Dallas firm, aims to acquire a 70 percent stake in a Beijing hospital in order to convert it into a specialty obstetrics provider, the first of several similar specialty-care facilities it plans in Beijing and Shanghai;
• Aetna, WellPoint and UnitedHealth Group have all recently opened offices in China with various plans to expand into group health insurance, health administration and care coordination;
• The Nashville, Tenn.-based Frist family behind HCA, a for-profit hospital chain, has formed China Healthcare in order to build and operate a 500-600 bed Shanghai hospital.

Other U.S. based healthcare providers and insurers have already been in China for a while: Cigna opened its office there in 2003. Chindex International, a company unknown to me, apparently now operates a chain of clinics and hospitals in China that target "diplomats, expatriates and wealthy Chinese" after more than 20 years in the country.

What all these deals have in common is a hope of capturing a share of rising "consumer" spending among middle- and upper-class Asians. Exactly how this will work in practice remains unclear, particularly given the heavy regulation of healthcare and potential cultural barriers in China and elsewhere in Asia. Among the chief questions they raise is exactly how profitable such operations can be in nations with functioning national healthcare systems, which tend to be resistant to the kind of health-and-wealth skimming many of these companies seem to counting on doing.

As with many foreign-investment crazes, this one seems likely to end in tears for many of the players. Given the grim state of the healthcare business in the U.S., though, I guess it's hard to fault these companies for making like Willie Sutton and heading where the (presumed) money is.

Image via Flickr user mav.mbecker.net, CC 2.0