China's push to
overhaul its health-care system is encountering challenges from public
hospitals, Health Minister Chen Zhu said, an obstacle that has broad implications
for the country's economic outlook.
On the positive side, Dr. Chen said that China has extended basic
medical coverage to 96% of rural Chinese.
Until a few years ago, the bulk of the rural population had no health
insurance, which meant that a serious sickness within a family often led to
financial ruin, and returned many farmers to the poverty they had recently
escaped.
However, Dr. Chen portrayed a situation that increasingly worries
health-care experts: that the biggest obstacle to fixing health care in China
is public hospitals that see reform as a threat to their for-profit status—and
to the income of both doctors and administrators.
"The major challenge is the reform at the public hospitals,"
said Dr. Chen in an interview.
China in 2009 embarked on an ambitious three-year, $125 billion effort
to expand health-insurance coverage, improve primary-care facilities and revamp
the public-hospital system, among other goals.
The push fits in with China's broader economic goal of spurring
domestic consumption: The government hopes that a better social-safety net will
encourage families to spend more of their savings.
It has made major strides, experts say, especially on extending
insurance coverage to the country's 833 million rural residents. But public
hospitals, historically the backbone of treatment in China because of the lack
of primary-care facilities, have fought the overhaul. They benefit from the
current system in which they are allowed to make up for low government-set
prices for beds, nursing care, operations and other services by reaping profits
from the sale of drugs and diagnostic tests.
The system has led to massive overprescription of expensive drugs, and
needless testing.
In the past three years, reforms have created a list of "essential
drugs" for common illnesses whose prices are fixed at a discount and whose
use doesn't lead to a commission, which has helped lower health-care costs at
some hospitals.
Such moves, however, have lowered hospital revenue, which has prompted
resistance from hospitals and doctors.
"China has not been able to make much movement because the
government and the minister of health are trying to change the hospitals'
motive, structure and management," said William Hsiao, an economics
professor at Harvard University's School of Public Health who studies Chinese
health reform. "Hospitals and physicians are fighting back
furiously."
Hospitals appear to be shifting away from drugs on the essential list
to more expensive drugs and passing the higher costs on to patients, according
to research from Dr. Hsiao and his colleagues recently published in the medical
journal the Lancet.
Dr, Hsiao said China has made great strides in improving the
primary-care infrastructure. According to his analysis, around 92% of the
Chinese population has some form of insurance coverage, slightly below Chinese
government claims, though the coverage for many is limited. "The strategy
is: get everyone covered, then deepen the coverage," said Dr. Hsiao.
However, he said the inability to successfully curb costs at hospitals
could have trickle-down effects for insurance coverage.
"When the public hospitals, which are the mainstay of the
provision for health care in China, are for-profit institutions, they will use
every possible means to get money out of the patients or the insurance, so the
insurance fund is going to have a tough time to sustain itself," said Dr.
Hsiao.
Currently, the total health expenditure in China accounts for about 5%
of its gross domestic product, and of that, about 28% is paid for by the
government, 35% by individuals and the remainder by employers. By the end of
2015, the goal is to increase the government's contribution to about 33% and
reduce individuals' out-of-pocket expenses to 30%, said Dr. Chen.
Dr. Chen, a hematologist, was in New York to receive an award from the
National Foundation for Cancer Research for work that he and colleague Wang
Zhenyi conducted on leukemia. The only nonparty member among China's senior
leaders, Dr. Chen became a self-taught "barefoot doctor" when he was
sent to the Chinese countryside for re-education in the 1960s. Later he
obtained his doctorate in Paris.
He said the workload of doctors has almost doubled at hospitals over
the past three to four years as more people have gotten insurance and have
begun seeking medical care. "Nowadays, everybody wishes to see the best
doctors," Dr. Chen said.
In the next phase of reform, the Health Ministry will seek to protect
doctors' salaries by increasing government investment in hospitals and relying
more on payments from insurance, said Dr. Chen. The low cost of medical
services, like operations or nursing care, also needs to be addressed he said.
"We need to increase the price of nursing fees, operating fees," he
said.
The ministry will begin pilot projects in hospitals at the county level
in some 300 of 2,800 counties across China, using public funds to improve
equipment and using insurance to pay for operational costs, said Dr. Chen. If
successful, it plans to launch the problem nationally at the county level next
year.
China also has another tier of hospitals in cities, and is conducting
pilot programs in hospitals in 17 cities, including some of the largest like
Beijing, Shanghai and Shenzhen.
Part of the pilot programs will include ongoing tests of various
payment policies, including paying a set amount per patient or a lump sum for a
particular diagnosis.
The government also wants to improve training of general practitioners
and attract new talents at the grass roots level, such as at village clinics,
instead of just big hospitals.
Shirley S. Wang
http://online.wsj.com
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