China's medical tourism full process cost is only about 1/3 of Japan's. This phenomenon is the result of multiple factors, involving multi-dimensional differences in cost structure, market positioning, policy environment and industry stage. The following is an analysis of the core reasons:
Significant differences in core cost elements
1. Human Resource Costs: Salary and Training System for Medical and Nursing Personnel
The salary level of Chinese healthcare workers is much lower than that of Japan. According to OECD data, the average annual salary of Japanese doctors in 2022 will be about 12 million yen (about 600,000 RMB), while the average annual salary of doctors in tertiary hospitals in China's first-tier cities will be about 300,000-500,000 RMB (except for some high-end private institutions). This gap directly reduces the labor cost of medical services. In addition, China's medical education system is mainly public, and the training costs are covered by the State Ministry of Finance, while Japanese medical students need to bear high tuition fees (the average annual tuition fee of private medical schools is about 10 million yen, or about 500,000 yuan), and their salaries need to cover the upfront investment after they start their careers, which further pushes up the cost of medical manpower in Japan.
2. Pharmaceuticals and consumables: China's substitution and supply chain advantages
China has formed a mature industrial chain in the fields of generic drugs and medium- and high-end medical devices, and the proportion of Chinese drugs and consumables continues to rise. For example, the price of commonly used consumables such as cardiovascular stents and orthopedic implants in China is only 1/3-1/2 of that of imported products; and the price of generic drugs has been significantly reduced through the policy of “band purchasing” (by more than 50% on average). Japan's medical care is highly dependent on imported high-end drugs and consumables (such as European and American originator drugs, precision surgical instruments), superimposed on tariffs, logistics and distribution costs, the terminal price is significantly higher than in China.
3. Operation Costs: Site and Resource Efficiency
China's medical tourism is mainly laid out in Hainan, Yunnan, the Yangtze River Delta and other regions, and although land and property costs have been rising year by year, they are still lower than those in Japan's core cities (e.g., Tokyo, Osaka). For example, the rent of the medical park in Boao LeCheng International Medical Tourism Advance Zone in Hainan is only 1/5-1/3 of the rent of similar parks in Tokyo. in addition, China's public hospitals as the main body of the healthcare system has a high operational efficiency (e.g., outpatient visits, bed turnover), diluting fixed costs; while Japan's private hospitals account for a high percentage of the hospitals (about 80%), the operating costs (e.g., depreciation of equipment, personnel management) need to be covered by the pricing of the services.
market positioning and differentiation of service content
1. Target group: cost-effective vs. high-end customization
Currently, China's medical tourism takes “cost-effectiveness” as its core competitiveness, mainly attracting middle- and high-end customers from Southeast Asia, Northeast Asia and neighboring provinces (e.g., cosmetic surgery, rehabilitation of chronic diseases, physical examination, etc.). The design of service packages focuses more on “basic needs coverage”, for example, the plastic surgery package includes pre-operative examination, surgery, post-operative care and short-term accommodation, with the pricing focusing on RMB 50,000-200,000, while similar projects in Japan (e.g., high-end plastic surgery, early cancer screening) generally cost RMB 200,000-1,000,000 due to the inclusion of personalized program design and long-term tracking services. RMB 200,000-1,000,000 yuan.
2. Technology stage: popularization and application of mature technology
China has reached the international advanced level in some medical technology fields (e.g., oral implantation, medical aesthetics, and rehabilitation medicine), but overall “technology popularization” is still the main focus, and there is no large-scale promotion of ultra-high-end services (e.g., the popularity of gene therapy, and proton reion therapy is lower than that of Japan). Japan, on the other hand, is a global leader in the fields of early cancer screening (e.g. PET-CT whole-body examination) and regenerative medicine, and the R&D investment and patent fees for related equipment (e.g. the latest proton therapy system) and technology are higher, which are ultimately reflected in the price of services.
Policy Support and Industrial Ecology Optimization
1. Policy support to reduce transaction costs
The Chinese government has incorporated medical tourism into the “Healthy China 2030” strategy, and through the policies of free trade zones (e.g., the Boao Medical Tourism Advance Zone in Hainan), it has provided tax incentives (corporate income tax exemption of 15%), tariff exemptions for imported equipment, and facilitation of cross-border capital flows. The Boao “Medical Tourism Advanced Zone” offers tax incentives (corporate income tax exemptions and reductions of 15 percent), tariff exemptions for imported equipment, and facilitation of cross-border capital flows. In addition, some regions (e.g., Guangxi and Yunnan) have introduced “medical + tourism” tickets, integrating scenic spot tickets and transportation costs to further reduce the comprehensive costs of tourists. Although Japan has a mature medical system, its policy focuses on protecting the medical rights and interests of its residents (e.g., strictly restricting foreign patients from occupying public medical resources), and its industrial support for medical tourism is limited.
2. Industry chain synergy
China's medical tourism is deeply integrated with cultural tourism and recreational and healthcare industries, forming a composite scenario of “treatment + leisure”. For example, Hainan medical tourism projects often supporting tropical rainforest treatment, hot springs hotels, traditional Chinese medicine therapy, etc., through the industry chain synergies to dilute the cost; Japan's medical tourism is more reliant on a single medical service, ancillary services (such as high-end hotels, interpreters) market-based pricing is higher, pushing up the overall cost.
the exchange rate and market maturity of the stage of influence
The fluctuation of the exchange rate between RMB and Yen (about 1:20) directly affects the cost conversion. Even if the cost of services is similar, the exchange rate factor will magnify the price advantage of Chinese medical tourism. In addition, China's medical tourism is still in the stage of rapid development (market size of about 100 billion yuan in 2019, with an annual growth rate of more than 20%), the market competition is fierce, and organizations seize the customer base through the low price strategy; while Japan's medical tourism has entered the maturity stage (market size of about 300 billion yen in 2019, with an annual growth rate of about 5%), and the price system is more stable.
Summarize
The cost advantage of China's medical tourism is the result of the combination of cost structure (manpower, drugs, operation), market positioning (cost-performance orientation), policy support (industrial synergy) and development stage (rapid expansion period). In the future, with the upgrading of technology (e.g., the Chineseization of high-end medical equipment) and the refinement of services (e.g., the introduction of international accreditation), the cost advantage may be gradually transformed into “quality and affordability” rather than relying solely on low-cost competition.