China's private healthcare institutions attracted roughly 11 billion yuan ($1.6 billion) in the past year and a half, demonstrating great potential, according to a recent report.

The report, issued by Beijing-headquartered think tank EO Intelligence iyiou.com, revealed that each fund raised surpassed 200 million yuan, and funds mainly went to internet hospitals, private hospitals and clinics. Internet hospital We Doctor attracted 500 million yuan in a pre-IPO round, setting a record.

"As China's medical market continues to deepen, the future of private healthcare is promising," said Yang Wenya, a medical analyst with iyiou.com.

Private healthcare institutions can be divided into private hospitals, clinics, third-party medical institutions, health management institutions and internet hospitals.

According to statistics from the National Health Commission, at the end of 2017, there were more than 18,000 private hospitals in China, accounting for 60 percent of the total number of hospitals. The number of private hospitals exceeded that of public hospitals, but there were only 490 million visits, less than 15 percent of total visits.

Yang accorded this to a lack of trust in private hospitals. "Especially for complex diseases, patients' first choice is a major public hospital, where specialists work. In addition, most private hospitals are not covered by medical insurance, and patients have relatively heavy financial burdens."

Currently, public hospitals still play a dominant role in China. In contrast, private hospitals are in a weak position, limited by a lack of resources, poor medical insurance coverage and weak brand image.

"However, with the reform of the medical system, hospital marketization is the only way for medical development, so private hospitals currently in operation will have a first-mover advantage," Yang said.

Yang forecast that in the future, more hospital departments will step out of the public system, to form branded private hospitals, and excellent doctors and medical resources will enter private hospitals gradually.

"The pattern will see public hospitals responsible for basic treatment, while private hospitals will offer treatment for complex diseases and standardized services, satisfying high-end medical needs. A pattern of high efficiency and refined services will be established. Public and private hospitals complement each other, and neither one is dispensable," she said.

Clinics will undergo diversified development, covering areas such as oral health, pediatrics, plastic surgery, traditional Chinese medicine, general clinics and community clinics, according to iyiou.com.

This will offer patients easier access to physical examinations and treatment because third-party institutions will gradually take the place of hospital departments. Physical examination centers will evolve into health management centers, which will be in demand in medium to high-end communities.

With the development of internet-based hospitals, patients will be able to see a doctor without leaving their home, which is convenient for patients and doctors, and will cut costs and increase profits for hospitals.

As the government, enterprises and doctors interact, doctors will become freelance. In addition, medical consumption will be universal, stimulating demand for plastic surgery, oral and gynaecological treatment.

"Medical care is a slowly developing industry. There are many pain points and solving these requires time. Medical reform will not happen overnight. Governments and enterprises should be patient, and they should also have confidence.

"There are challenges lying in the development of private medical care, in the aspects of talents, operation management and payments. High salary and training opportunities should be provided to attract medical talents. A more cost-effective operation mode, should be introduced. Besides, medical services can be combined with commercial insurance, to relieve patients' financial burden.

"As the marketization of Chinese medical institutions continues to deepen, the power of private medical institutions continues to grow," Yang said.