Thanks to government support, private medical institutions are gradually gaining wider acceptance in China.

The market threshold is lower and some of them have been admitted into the public medical insurance system. Specialized hospitals engaged in dental care, ophthalmology, maternity services and tumor treatments are booming, diversifying the nation's medical care service industry.

However, despite favorable policies, thorough implementation of them is being hindered.

The first hindrance is the different operation models of State-owned hospitals and the private ones. China has issued policies to allow doctors to work in more than one hospital, but doctors in State-owned medical institutions are reluctant to work for private hospitals and clinics because they can enjoy treatment equal to civil servants, including professional titles and retirement pay, which private establishments do not offer.

Because they are operated differently, data cannot be shared between the two types of medical institutions in China, which makes trans-treatment impossible.

State-owned hospital reform should be made a priority to guarantee the full availability of medical resources. That will create a fair competition environment and is the prerequisite for private medical institutions to make profits.

The second hindrance is lack of a supervision system for private hospitals and clinics.

Currently, the Ministry of Health and related government departments are responsible for the supervision of State-owned hospitals, which are categorized as public institutions. However, the departments cannot supervise private medical institutions because they are regarded as companies.

Lack of supervision results in an unhealthy situation for some private medical institutions - disorderly competition, operations without clear standards, difficulties in obtaining government support for skilled personnel, poor qualifications of research and development results, and then back to disorderly competition.

So far, private medical institutions have not been included in China's macro medical care management system in terms of the blueprint for regional medical care and systematic development of skills.

If the above problems cannot be solved, the encouraging policies can only promote more investment in the medical care sector, prompting a number of private medical institutions to expand fast in a short period of time but not improving their quality over the long term.

With the entry of more investors, competition is becoming heavier. Some investors, under pressure to survive and given the lack of supervision, may pursue short-term profits -competing viciously and only offering high-profit services.

The author is a senior researcher with the Samsung Economic Research Institute.