Hong Kong-listed China HealthCare Holdings (CHC) plans to open two specialty clinics in Shanghai and Beijing by the end of the year.

The company aims to cash in on the surging demand for quality medical services brought about by an increasingly-wealthy middle class.

"We will open a urology premium specialty centre (PSC) in Shanghai and an obstetrics-gynaecology PSC in Beijing this year," the mainland medical service provider's CEO Lee Jong-dae said yesterday.

CHC's decision comes after the success of its first PSC, which was opened in Shanghai at the end of last year.

Specializing in obstetrics and gynaecology, the company's Shanghai PSC treated 340 patients in April, a massive leap from the 26 it treated in its first month.

CHC's next stop will be Guangzhou, another big city that has a large middle class, Lee said.

The opening of more PSCs signals a shift in the firm's strategy. The bulk of CHC's revenue used to come from services provided through contracted hospitals and medical institutions.

Such services include the "green pass," which saves members from having to wait in long queues at hospitals; the emergency assistance medical service; and the health asset management service.

CHC has 747,000 members and 914 contracted hospitals and medical institutions in big cities.

At present it has no plans to cover the mainland's vast rural area.

The company usually teams up with insurance companies and travel agencies to expand its membership. CHC will continue to promote its services using this method, Lee said.

CHC entered into an agreement with NASDAQ-listed mainland travel agent Ctrip.com recently to promote its emergency assistance medical service to domestic air travelers, who can apply for CHC membership from 30 yuan (US$3.75).

CHC's talks with Taiwan Central Insurance about selling its services is near completion, Lee said.

Negotiations with a bank and an insurer are underway.

Citing increasing healthcare awareness among mainlanders, especially among those living in big cities such as Shanghai and Beijing, Lee believes there is huge potential.

"The mainland's booming economy has increased the demand for quality medical services," he said.

Previously, Lee firm's decided to spin off side businesses to focus on the medical market.

(China Daily June 6, 2006)