The Zhongda Hospital, which started operation in September 2021, has received government loans of 4.033 billion yuan in batches for construction since 2015. It has a very negative impact on the financial situation.” It is planned to allow the hospital to defer the repayment for five years and provide 15 years of public medical care instead of interest.
Feng Kang, CEO of CUHK Hospital, was interviewed to explain the picture. He emphasized that the hospital’s finances are stable, but he admitted that there may be “some loopholes” in the initial repayment period. When the construction period is included, “it is almost equivalent to two years of operation of the hospital. , I have to pay back the money immediately”, so I need to apply for an extension.
He also quoted an independent financial consultant's calculation, saying that entering the fourth year of operation, that is, by 2025, the balance of payments will be reached.
He mentioned that Zhongda Hospital aims to serve Hong Kong residents, and also emphasized the development of transparent package fees to help reform the medical system in Hong Kong. He is confident that it will be supported by the Legislative Council. "We are not just a hotel just for A private hospital that makes money."
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Received a government loan of 4 billion to build the project, which will be repaid in 10 years from next month
Since 2015, Zhongda Hospital has received a total of 4.033 billion yuan in government loans for construction in batches. The hospital will be completed in 2021 and begin operations in September of the same year.
The hospital originally planned to repay the loan in 10 years from March this year, but the Medical and Health Bureau submitted a document to the Health Affairs Committee of the Legislative Council to show that it intends to apply for a five-year deferral of repayment for Zhongda Hospital, because the new crown epidemic has severely affected the hospital’s finances. Negative impact, without government support, the hospital will not be able to maintain operations.
Some reports said that it was not able to operate, so it was bankrupt, but in fact it was not. It was positive all the way, and it developed as expected.
Feng Kang, CEO of CUHK
Feng Kang: Private hospitals are generally in use for five years before reaching a balance of payments
Feng Kang explained that due to expensive medical equipment, such as computer tomography, magnetic resonance, etc., there are also maintenance depreciation wear and tear. It usually takes five years for private hospitals to reach a balance of payments after they start operating. The payment period was "set tighter", "it is almost equivalent to two years of operation of a hospital, and the money has to be repaid immediately." Feng Kang continued, it may be related to the private medical market when the budget was first formulated, which means that there were more medical expenses at that time. Mainland medical tourists also have a lot of childbirth needs.
According to the search data, CUHK proposed to develop and build a non-profit private teaching hospital in 2014. In 2015, the Finance Committee of the Legislative Council approved the government loan. The following year, the government signed a loan agreement and service contract with the Chinese University of Hong Kong Medical Center Co., Ltd.
Based on the calculation of the first five-year period from 2019 to 2023, the hospital will be completed in 2021, "But for three years, it will not be in operation, and it will be tight (stage), and it will not make money. Therefore, the original repayment period was designed There may be some loopholes, not because the prediction was wrong, but because there is a problem with the design itself, which led to the need for repairs today." He mentioned that he had foreseen the need for a deferred repayment plan earlier, and started working with it a year ago The government is negotiating, but affected by the epidemic, "so Yijia will deal with it first."
Feng Kang, CEO of Zhongda Hospital, pointed out that Hong Kong people are the target audience of Zhongda Hospital’s services, and also emphasized the development of transparent package fees. “It is not just a private hospital for making money.” (Xia Jia Long photo)
Provide 120,000 hospital days to replace the extra interest on extended repayment
He emphasized that the business of the hospital has been growing, and it is predicted that in the next three years, with the gradual increase of hospital beds, more income will be generated. The hospital has appointed an independent financial consultant to review the budget. After review, it is confirmed that the budget is reasonable. , will reach balance of payments in 2025, and will reach positive cash flow from 2026 (the sixth year of operation). "So it's a matter of time, not capacity or operation." The interest collected will be replaced by the hospital providing 120,000 hospital days in 15 years to help public hospitals relieve medical pressure.
As for the specific distribution of services, it will be discussed with the Hospital Authority in the future.
The government submitted a document to the Legislative Council stating that the epidemic has seriously affected the operation of CUHK Hospital, and has had an extremely negative impact on the finances of CUHK Hospital.
Feng Kang admitted that the epidemic has indeed brought some impact, including the decline in overall demand, but it is not a key factor. "Even if there is no Covid (new crown pneumonia), it is not expected that a private hospital will be able to break even within two years. Generally speaking It’s impossible.” The fifth wave of the epidemic was severe. From March last year to January this year, CUHK Hospital received a total of 471 new crown patients referred by public hospitals and 161 non-new crown patients referred by public hospitals. The patients referred by the public hospital provided 397 sessions of radiotherapy and 54 sessions of chemotherapy. "They helped the Hospital Authority even in the most difficult times."
I operated 200 beds for 16 months, and 50 of them were borrowed to help the Hospital Authority. If it was Yijia, it would be impossible for me to pay back the money immediately.
Feng Kang, CEO of CUHK
Customs clearance has not yet seen the growth of medical demand in the mainland
Zhongda Hospital is fully owned by CUHK. When asked about the possibility of recapitalization by CUHK, he said that the school’s assets are all public funds, so there are restrictions. “A hospital is a hospital, and a university is a university. We can’t collect everything together. CUHK is always a public university, supported by public funds, and we are always a business operation. Even if we have many social missions, we need to separate them.” However, the school can help fundraising through the Internet. Funding and donations.
Legislative Council documents show that CUHK has injected more than 2.6 billion yuan into CUHK Hospital, including donations from private individuals, private foundations, and the Jockey Club, as well as 500 million yuan contributed by the CUHK Development Fund; -In 23 years, an additional 330 million yuan was injected into Zhongda Hospital, which was the donation received by Zhongda Hospital during the construction of Zhongda Hospital.
As for whether it can be open source after customs clearance?
Feng Kang pointed out that there has not been too much growth in medical demand in the mainland. Even self-funded bivalent vaccination services "are not too much." He emphasized that Hong Kong people are the target audience of the service. For Hong Kong residents, the goal is to provide good services and help Hong Kong residents. This will bring about a better balance in the medical system and relieve the pressure on the Hospital Authority.”
He went on to say that the development of package fees by CUHK Hospital is also one of the long-term strategies, hoping to make medical fees more transparent. In the long run, he also hopes to promote the adoption of other private hospitals and medical groups to assist in the reform of the medical system.
The hospital has listed 292 prices on its official website, including daytime and inpatient surgery services, accounting for 60% of the total available services. 95% of admitted patients can have financial budgets.
When asked if CUHK Hospital would be hindered by its mission?
Feng Kang pointed out that if operation items are operated on an item-by-item basis, it is indeed more profitable than a package-style fee, but this is contrary to the original intention of the establishment.
The Health Affairs Committee of the Legislative Council will discuss the revision of the Zhongda Hospital’s loan plan this Friday. He is confident that he will be supported. “I want to bring out the social role of the hospital. It is not just a private hospital just to make money.”
If the purpose of our establishment is to make a lot of money, like a real estate project, then it should not be done by CUHK, should it?
You should find a real estate company to do it.
Feng Kang, CEO of CUHK
The CUHK Board of Trustees Hopes for Legislative Council Support for the Proposal
The CUHK Board of Trustees held a meeting yesterday to discuss the postponement of the repayment of the CUHK Hospital. The CUHK Council pointed out that the University fully understands the severe challenges faced by the hospital. The establishment of the CUHK Hospital is one of the important commitments of CUHK to serve the Hong Kong people. The University is very happy to see it The government put forward this proposal and promised to fully support the Chinese University Hospital in providing additional medical services to the Medical and Health Bureau in lieu of repaying the interest of the deferred repayment. It also hopes that the proposal will be supported by the Legislative Council, and is very grateful to the government and the Chinese University for their cooperation , to ensure that Zhongda Hospital continues to fulfill its mission and lead innovation and breakthroughs in healthcare.
CUHK Hospital started operations in September 2021.
(Photo by Xia Jialang)
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