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

Every reporter｜Yuan Yuan Every editor｜Liao Dan

Recently, Taikang Xianlin Gulou Hospital was rated as a “three-tier” hospital, which is both an affirmation of the hospital’s medical strength and a result of the exploration by insurance capital in the integration of medical care and elderly services.

In recent years, with the acceleration of population aging and the continuous promotion of the Healthy China strategy, combined with the industry transformation challenges, the medical industry is becoming the “core track” for insurance institutions. Data shows that by the end of 2025, insurance funds are expected to invest more than 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 investment.

From Ping An’s integration of Peking University Medical Resources, Taikang’s “community + hospital” model, to Qianhai Life’s establishment of a tertiary comprehensive hospital, insurance companies are accelerating their transformation from purely capital investors to builders of a medical health ecosystem, with the “insurance + medical” model moving from concept to implementation.

Policy relaxation + demand release, insurance capital’s layout welcomes a “golden window period”

The continuous warming of insurance companies’ investments in hospitals is backed by a three-way resonance of policies, markets, and industries.

On the policy level, regulators continue to “relax” restrictions on insurance capital. In 2020, multiple departments jointly issued documents to support insurance funds in accordance with regulations to invest in the health service industry, allowing commercial insurance institutions to orderly invest in the establishment of traditional Chinese medicine and Western medicine institutions, as well as rehabilitation, care, and integrated health service institutions.

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

In the same year, the National Financial Supervision Administration further optimized the industry scope for major equity investments by insurance capital, clarifying the correlation between the medical industry and insurance business, and guiding insurance capital to increase investment in fields such as healthcare.

On the market level, the increasing aging population has generated huge medical demand, opening up broad development space for the hospital industry. Data shows that currently, the population aged 60 and above in China has exceeded 300 million, with over 40 million elderly people with disabilities or semi-disabilities, and the demand of the elderly group for medical rehabilitation, chronic disease management, and high-end medical services is increasingly urgent.

At the same time, residents’ health awareness continues to improve, and the commercial health insurance market is expanding, with consumers’ integrated demand for “insurance + medical services” becoming increasingly strong—no longer satisfied with simple post-claim compensation, but focusing more on full-process services, including pre-emptive prevention, in-process treatment, and post-rehabilitation, providing a solid market foundation for insurance companies to integrate medical resources and layout hospitals.

On the industry level, the transformation challenges of the insurance industry are forcing insurance capital to seek new growth engines. In recent years, traditional insurance businesses have faced multiple pressures such as product homogenization, intense competition, and declining yields, with the difficulties of “difficult recruitment and slowed premium growth” in the life insurance industry becoming increasingly prominent. The industry urgently needs to find new business breakthroughs and profit growth points.

The medical industry has the characteristics of being counter-cyclical, with stable cash flow and considerable long-term returns, which highly matches the long duration characteristics of insurance capital’s liabilities. At the same time, by investing in hospitals, insurance companies can close the “insurance + medical” industry chain loop, solving pain points such as the difficulty of health insurance claims management and low customer stickiness, and promoting the industry’s transformation 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 businesses: firstly, to resolve the risk of interest rate spread losses and obtain stable returns through physical assets during periods of declining interest rates; secondly, to build competitive barriers and form differentiated product services through a medical and health ecosystem, thus escaping the homogenized price war; thirdly, to activate existing customers and transform 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 Every Reporter.

Leading the way, diverse models, and differentiated layout of insurance capital

Currently, leading insurance companies such as Ping An, Taikang, China Taiping, and Xinhua Insurance, leveraging their advantages in capital, clients, and licenses, have taken the lead in layout and formed distinctive development models. By the end of 2025, leading insurance companies have already laid out multiple comprehensive hospitals, rehabilitation hospitals, and medical complexes nationwide, forming a full-chain service system covering “prevention—treatment—rehabilitation—elderly care.”

In terms of models, insurance companies have different ways of investing in hospitals; some choose to acquire shares through mergers, while others prefer to build hospitals themselves.

For example, since taking over Peking University Medical Group in 2021, Ping An has fully launched 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 service, and integrating top medical resources,” relying on Ping An Group’s “comprehensive finance + medical care and elderly services” ecological synergy to construct a “health management—comprehensive diagnosis and treatment—rehabilitation treatment” full-cycle service model. Data shows that by 2025, Peking University Medical Group’s non-medical insurance income growth rate will reach 35%, outpatient and emergency visits will exceed 3.2 million, and the number of tertiary and fourth-level surgeries will increase by 20% year-on-year.

The heavy asset self-operated model is mainly represented by Taikang Insurance, Sunshine Insurance, and Qianhai Life. As a pioneer in the layout of health and elderly services, Taikang, through Taikang Health Investment, pioneered the “insurance + medical care” model, adhering to the standardized layout of “one community, one hospital,” and based on this, gradually laying out physical medical services through self-construction, investment, and cooperation. Currently, Taikang Medical has laid out 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 will also complement some light asset medical service resources while laying out heavy assets hospitals, forming a service network that coordinates online and offline. Some insurance companies that adopt a light asset model for hospital service resources may also invest in one or two physical hospitals.

Yuan Shuai, deputy director of the Investment Department of the China Urban Development Research Institute, told Every Reporter that the heavy asset model is more suitable for first-tier cities or core strategic areas. By acquiring land and building hospitals and self-building teams, insurance companies can achieve absolute control over medical quality, brand standards, and service details. Its core advantage lies in being able to create benchmarks like Taikang Xianlin Gulou Hospital, forming a brand moat through extremely high entry barriers and providing high-net-worth clients with certain scarce resources. The light asset model, on the other hand, is adapted to rapidly sinking markets and multi-point layout needs, integrating existing medical resources through shareholding, management, or alliances. Its core advantage lies in high capital utilization efficiency and rapid expansion, enabling the rapid establishment of a widely covered service network and achieving nationwide service coverage for insurance products at a relatively low marginal cost, which is a powerful tool for insurance companies to capture market share and achieve standardized service output.

Focusing on specialty and rehabilitation, investment by insurance companies in hospitals will present three core trends

“The closed health loop is the Kaiser Medical model, where the physician group only provides medical services for Kaiser hospitals, with almost all funding coming from Kaiser Insurance; the joint health model belongs to a semi-open health loop, allowing more users and medical resources to participate for better integration of medical care.” An industry insider stated 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 facing challenges from aging, and how to help clients live healthily and long is an urgent issue for insurance companies to address.

This issue has also attracted the attention of industry institutions and practitioners. For the health challenges brought by longevity, the solution from insurance companies is to cooperate with medical schools and increase investment and exploration in fields such as rehabilitation and chronic diseases. For example, China Pacific Insurance signed a strategic framework agreement with Shanghai Jiao Tong University School of Medicine in 2022 to jointly establish the “Jiao Medical—Pacific Insurance Source Shen Rehabilitation Research Institute” to explore 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 exploration phase to the maturity phase, with the ultimate goal not being simple asset allocation but constructing a new health ecosystem centered on health, with insurance as the payment hub and medical care as the service support. Looking ahead, investment by insurance companies in hospitals will present three core trends:

Firstly, a shift from “land-grabbing” to “refined operation.” Early investment by insurance capital focused on asset scale and the number of beds, while in the future, there will be greater emphasis on specialty capability building, operational efficiency improvement, and medical quality certification.

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

Thirdly, the “heavy asset benchmark + light asset network” will become the mainstream paradigm. Establishing brands and standards with a few flagship hospitals while expanding coverage through extensive cooperative networks can control capital consumption and achieve economies of scale. This model balances service quality with commercial sustainability and is expected to become an industry consensus.

“In the future, the investment by insurance capital in hospitals will present core trends of ‘refined operation’ and ‘digital symbiosis,’ while no longer blindly pursuing the number of beds but focusing on the specialization and rehabilitation effectiveness.” Yuan Shuai also mentioned that during this process, “heavy assets as benchmarks and light assets for expansion” will certainly become the mainstream model in the industry. Insurance companies will use a few heavy asset projects to establish “service skylines” and technical standards as the soul and ballast of the brand; at the same time, they will link a vast number of light asset institutions through digital platforms, forming a tiered ecology of “top leading, foundation covering.” This model addresses the pain points of low capital turnover in heavy asset models while avoiding the risks of inconsistent service quality in light asset models, finding the optimal balance between premium leverage and real economy operations, and will promote medical health services toward true hierarchical diagnosis and continuous management.