By Charles P. Wallace

Ma Weihua, CEO of China Merchants Bank, and Cigna CEO David Cordani in China last year.

FORTUNE -- (SHANGHAI) By 8 a.m., Renji Hospital, founded in 1848 by Western missionaries and still one of China's best medical centers, is already in a state of chaos. A veritable sea of patients is crammed into the reception area, waiting impatiently to see a doctor. They first line up under giant neon boards that list physicians' specialties to collect a number on a waiting list, then join another snaking line at a cashier's window, and finally shuffle into even longer queues to wait for a doctor to see them in examination rooms with chipping paint. This scene is played out daily across China, which has a limited primary health care system. Medical services are cheap but rudimentary: If you have any malady, from a bad cold to cancer, you must go to the emergency room to seek medical treatment.

But in a modern building less than 100 yards from the main Renji emergency ward is a glimpse at China's future. It is the guibin texu, known more commonly by its English translation: VIP hospital. In the VIP building, patients don't line up but wait for appointments on leather sofas, entertained by widescreen TVs. Instead of the shouting heard at Renji's main hospital, the noise level in the VIP section remains an understated murmur. Patients are escorted into private examination rooms by nurses in crisp white uniforms. The specialists who are so very hard to see at Renji are now suddenly available by appointment -- for a price. The physicians at the VIP hospital charge $60 or more for a consultation, 50 times what patients pay across the road.

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To help pay for such VIP treatment (and treatments), a growing number of Chinese consumers are turning to supplemental health insurance -- a thoroughly American concept. The irony is that despite soaring demand for various financial services, foreign firms have just 2% of the banking and insurance market, according to McKinsey & Co. State-owned insurance companies dominate the market to such extent that last year New York Life abandoned its China joint venture, selling out to Japanese firm Mitsui Sumitomo Insurance because of slumping earnings.

But one U.S. firm, Bloomfield, Conn.-based Cigna (CI), is quietly winning over Chinese consumers, largely by defying conventional wisdom about how an American insurer should operate in China. Cigna entered the China market in 2003, partnering not with a local insurer but with a leading retail lender, China Merchants Bank, which is known for its deft handling of consumers. Rather than deploying an army of relatively expensive salesmen, which has burdened many other firms with a huge overhead, the Cigna joint venture has instead deployed innovative marketing, call centers equipped with the latest data-mining techniques, television commercials featuring a movie star pitchman, and online and social media sales to gain a growing foothold in the Chinese market. Last year Cigna's joint venture in China had revenues of $331 million, up 32% from the year before (though still a small fraction of the company's overall $29 billion in sales). After a decade of operation, the firm just sold its 1 millionth policy in China. The business broke even after just three years and is now solidly in the black.

Lines still snake through Shanghai's Huashan Hospital, a guibin texu (translation: VIP hospital).

Cigna's early success in China sets the company up to capitalize on a confluence of forces reshaping the nation, starting with the rise of private hospitals and clinics as a key pillar in Beijing's evolving efforts to provide health care to 1.3 billion people. These VIP institutions target China's rising middle class and wealthy, a group whose affluence will -- and this may seem counterintuitive -- actually create more demand for health care and insurance. They will live longer, requiring special care and treatments for diseases common among the elderly; their diets will change (not necessarily for the better); and they'll insist on drugs and medicines that previously had not been prescribed because of costs.

Ana Gupte, an analyst at Bernstein Research, says spending on health care in China is expected to more than triple, to $648 billion in 2015 from $182 billion in 2008. She reckons that the market for health insurance in China will reach $15 billion in 2015, and that Cigna's revenues there could approach $1 billion a year, nearly a third of what the company now earns from its international business. "China is the fastest growing asset in our international portfolio," says David Cordani, Cigna's CEO, during a visit to Shanghai. "Over a five- to 10-year horizon, China will become the critical part of our business portfolio because we will bring multiple products and services to the market, both for the individual and the emerging employer landscape here. It's an exciting part of our future."

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Cigna moves to shake up Chinese health care