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People's Daily Online>>China Society

Nursing homes run big losses

(Global Times)

08:45, December 07, 2011

Many nursing homes for former government employees in Beidaihe, Hebei Province have been running at losses to the tune of millions of yuan, the China Economic Weekly reported. As well, the funding gap is being filled by the central government.

There are about 280 nursing homes in Beidaihe and more than 100 of them are attached to central government offices, the magazine reported. Most nursing homes run on subsidies from the government, but some generate revenue through tourism and manage their own finances. The government will cover any losses.

Many of the homes were built in the 1950s and nearly all were refurbished in 2009 at a cost of one billion yuan ($15,770,000).

The director of a local nursing home said nearly all the homes linked to government agencies get subsidies of up to tens of millions of yuan each year, according to the report.

The subsidies are mostly used to improve internal services and some homes even accept them during tourist season, the only time of year they make money, said the magazine. Still, operators of the homes defend the funding.

"The tourism season here only lasts from July to the end of August and the home can't make ends meet the rest of the year," said the director, giving an example of necessary costs. "The heating system needs to run to keep pipes from bursting in severe cold. If they break, they will cost even more to fix."

He said the home needs about 300,000 yuan ($46,380) a month in order to maintain operations.

The Xinhua Holiday Hotel, linked to the Ministry of Water Resources, is currently operating despite the slow season. Vice-general manager Su Haifeng said the hotel loses about 4 million yuan ($631,200) per year because of the off-season.

"We would also like to close during winter, but it would affect our reputation as a four-star hotel if we shut down seasonally," Su said.

Nursing homes attached to government offices are not as interested in becoming commercial enterprises, according to local government workers, because they have grown to rely on the subsidies.

Beidaihe is trying to develop itself as a year-round tourist destination, said Yao Fei, a public relations official for the district government.

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