After the "Tier 3" hospitals, the second half of insurance-funded medical services: if not beds, then what are we competing on?

Recently, Taikang Xianlin Gulou Hospital was rated as a “Class III Grade A” hospital, which is both an affirmation of the hospital’s medical strength and a result of insurance capital’s exploration in the integration of medical care and elderly support.

In recent years, the acceleration of population aging and the ongoing promotion of the Healthy China strategy, coupled with industry transformation challenges, have made the medical industry a “core track” for insurance institutions’ layout. Data shows that by the end of 2025, insurance funds are expected to invest over 400 billion yuan in the medical and health industry through direct or indirect means, with various hospitals, rehabilitation institutions, and comprehensive medical bodies becoming the focus of this layout.

From Ping An’s integration of Peking University Health Resources, Taikang’s “community + hospital” model, to Qianhai Life’s establishment of a tertiary comprehensive hospital, insurance companies are accelerating the transition from being pure capital investors to builders of the medical health ecosystem, moving the “insurance + medical” model from concept to reality.

The continuous warming of insurance companies’ investment in hospitals is driven by a tripartite resonance of policies, markets, and the industry.

On the policy level, regulators continue to “unshackle” insurance capital. In 2020, multiple departments jointly issued documents supporting insurance funds to invest in the health service industry in accordance with regulations, allowing commercial insurance institutions to orderly invest in establishing Chinese and Western medical institutions, rehabilitation, care, and integrated health service institutions.

In 2025, the “Implementation Plan for High-Quality Development of Pension Finance in Banking and Insurance Industries” clearly supports insurance companies with strong capital strength and standardized operations to invest steadily and orderly in pension institutions, rehabilitation hospitals, and specialized hospitals, providing clear policy guidance for insurance capital layout.

In the same year, the National Financial Regulatory Administration further optimized the scope of major equity investments by insurance funds, clarifying the relevance of the medical industry to insurance business, and guiding insurance funds to increase their investments in fields such as healthcare.

On the market level, the intensifying aging population has created enormous medical demand, opening up vast development space for the hospital industry. Data shows that currently, the population over 60 years old in China exceeds 300 million, with over 40 million disabled or semi-disabled elderly individuals, and the demand from the elderly for medical rehabilitation, chronic disease management, and high-end treatment services is increasingly urgent.

At the same time, residents’ health awareness continues to rise, the commercial health insurance market keeps expanding, and consumers’ integrated demand for “insurance + medical services” is becoming increasingly strong—no longer satisfied with mere post-incident claims, but placing greater emphasis on full-process services that include prevention beforehand, diagnosis during, and rehabilitation afterward, providing a solid market foundation for insurance companies to integrate medical resources and layout hospitals.

On the industry level, the transformation challenges faced by the insurance industry are pushing insurance capital to seek new growth engines. In recent years, traditional insurance businesses have faced multiple pressures such as product homogeneity, fierce competition, and declining yield rates, making the difficulties of “increasing personnel and slowing premium growth” in the life insurance industry increasingly prominent, and the industry urgently needs to find new business breakthroughs and profit growth points.

The medical industry, with its counter-cyclical characteristics, stable cash flow, and considerable long-term returns, highly matches the long-term duration characteristics of insurance funds’ liabilities. Simultaneously, by investing in hospitals, insurance companies can close the “insurance + medical” industry chain loop, solve pain points such as the difficulty of health insurance claims control and low customer stickiness, and promote the industry’s transition from “risk compensation” to “health management.”

“For insurance companies, the strategic value of laying out hospitals and medical services lies in breaking through the bottlenecks of traditional business: first, to mitigate interest rate risk by obtaining stable returns through real assets during periods of declining interest rates; second, to build competitive barriers by creating differentiated product services through a healthcare ecosystem, breaking free from homogeneous price wars; third, to activate existing customers by converting low-frequency insurance consumption into high-frequency health service interactions, enhancing customer stickiness and lifetime value,” said Bai Wenxi, Vice Chairman of the China Enterprise Capital Alliance, in an interview with the Economic Daily reporter.

Currently, leading insurance companies such as Ping An, Taikang Insurance, China Taiping, and Xinhua Insurance have taken the lead in layout and forming distinctive development models, leveraging their advantages in funds, clients, and licenses. By the end of 2025, these leading insurance companies have deployed numerous comprehensive hospitals, rehabilitation hospitals, and medical complexes across the country, forming a full-chain service system covering “prevention - diagnosis - rehabilitation - elderly care.”

In terms of models, the ways in which insurance companies invest in hospitals vary; some opt for mergers and acquisitions, while others choose to build hospitals themselves.

For example, after taking over Peking University Health Group in 2021, Ping An fully initiated resource integration, operational reform, discipline construction, and talent planning. In terms of model, it has abandoned the heavy asset expansion path, opting for a strategy of “light assets, heavy services, and integration of top-notch medical resources,” relying on the synergistic advantages of Ping An Group’s “comprehensive finance + medical care and elderly support” ecosystem to construct a full-cycle service model of “health management - comprehensive diagnosis and treatment - rehabilitation treatment.” Data indicates that by 2025, the non-medical insurance revenue growth rate of Peking University Health Group reached 35%, with outpatient and emergency visits exceeding 3.2 million and the volume of tertiary and quaternary surgeries increasing by 20% year-on-year.

The heavy asset self-operated model is primarily represented by Taikang Insurance, Sunshine Insurance, and Qianhai Life. As a pioneer in the healthcare layout of insurance companies, Taikang uses Taikang Health Investment as a platform to create the “insurance + healthcare” model, adhering to the standardized layout of “one community, one hospital,” and on this basis, gradually lays out physical medical services through self-construction, investment, and cooperation. Currently, Taikang Medical has established five major medical centers across the country, including Taikang Xianlin Gulou Hospital, Taikang Tongji (Wuhan) Hospital, Sichuan Taikang Hospital, Ningbo Taikang Brain Hospital, and Shenzhen Qianhai Taikang Hospital.

Of course, the above two are not entirely distinct; insurance companies, while laying out hospitals with heavy assets, will also complement some light asset medical service resources to form an online and offline collaborative service network. Some insurance companies that adopt the light asset model to layout hospital service resources may also invest in one or two实体医院.

Yuan Shuai, Deputy Director of the Investment Department of the China Urban Development Research Institute, told the Economic Daily reporter that the heavy asset model is more suitable for first-tier cities or core strategic areas. By acquiring land and building hospitals, and constructing teams, insurance companies can achieve absolute control over medical quality, brand standards, and service details. Its core advantage lies in the ability to create “Class III Grade A” benchmarks like Taikang Xianlin Gulou Hospital, establishing brand moats through extremely high entry thresholds, and providing high-net-worth clients with certain scarce resources. The light asset model is better suited for rapidly sinking markets and multi-point layout needs, integrating existing medical resources through equity participation, management, or alliances, with its core advantage being high capital utilization efficiency and rapid expansion, enabling the quick weaving of a broadly covered service network and achieving nationwide insurance product support service coverage at lower marginal costs, thus becoming a tool for insurance companies to seize market share and achieve standardized service output.

“The closed health loop is the Kaiser Medical model, where under this model, the physician group only provides medical services for Kaiser hospitals and almost all funding comes from Kaiser Insurance; the United Health model belongs to the semi-open health loop, allowing more users and medical resources to participate, better realizing the integration of medical care and elderly support,” said an industry insider, noting that the medical insurance closed loop has gone through a development stage from closed to open, achieving a balance of medical prices and networks through the integration of internal and external resources. However, with the arrival of the longevity era, the construction of health loops is gradually challenged by aging, and how to help clients live healthily and long is an urgent issue for insurance companies to solve.

This issue has also attracted the attention of industry institutions and practitioners. Regarding the health challenges brought by longevity, insurance companies’ solution is to collaborate with medical schools and increase investment and exploration in fields such as rehabilitation and chronic diseases. For instance, China Taiping signed a strategic framework agreement with Shanghai Jiao Tong University School of Medicine in 2022 to jointly establish the “Jiao Yi - Taiping Source Shen Rehabilitation Research Institute,” exploring new models for the development of rehabilitation medicine.

Bai Wenxi stated that under the dual drive of the aging wave and the Healthy China strategy, the cross-border integration of “insurance + medical” is transitioning from the exploratory phase to the mature phase, with the ultimate goal not being simple asset allocation, but rather building a new health ecosystem centered on health, with insurance as the payment hub and medical care as the service support. Looking ahead, investment in hospitals by insurance companies will present three core trends:

First, transitioning from “land grabbing” to “fine cultivation.” In the early stages, insurance capital layout focused on asset scale and the number of beds, with future emphasis shifting to specialized capability building, operational efficiency enhancement, and medical quality certification.

Second, technology empowerment becoming a key differentiator. AI-assisted diagnosis and treatment, telemedicine, and intelligent health management will be deeply integrated into the insurance capital medical system, not only enhancing service efficiency but also feeding health data back into insurance product innovation and risk control optimization.

Third, the “heavy asset benchmark + light asset network” becoming the mainstream paradigm. Using a few flagship hospitals to establish brands and standards while expanding coverage through broad cooperation networks can control capital consumption and achieve economies of scale. This model balances service quality and commercial sustainability and is expected to become the consensus of the industry.

“In the future, investment in hospitals by insurance capital will present core trends of ‘refined operation’ and ‘digital symbiosis,’ no longer blindly pursuing the number of beds, but instead focusing on specialized features and rehabilitation effectiveness,” Yuan Shuai also stated. In this process, “heavy assets as benchmarks and light assets for scale expansion” will certainly become the mainstream model in the industry. Insurance companies will use a small number of heavy asset projects to establish “service skylines” and technical standards as the soul and ballast of the brand; at the same time, they will connect massive light asset institutions through digital platforms, forming a tiered ecosystem of “pinnacle leadership and foundation coverage.” This model not only addresses the low turnover rates of capital in heavy asset models but also avoids the risks of uneven service quality in light asset models, finding the optimal balance between premium leverage and real business operations, and will also promote medical health services toward true hierarchical diagnosis and continuous management.

(Author: Liu Sijia)

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