Apr 20, 2012

China - Medical reform faces challenges in China


China's new medical reform plan re-emphasises encouragement of private investment in the medical care industry, though insiders and experts doubt whether the policies can be thoroughly implemented.

The State Council on April 18 issued China's 2012 medical system reform programme, which includes policies for domestic and overseas private investors, such as introducing qualified private clinics into China's public medical insurance system, allowing doctors to work in more than one medical institution, increasing charges for medical services and allowing charitable organisations and commercial insurance businesses to open hospitals.

Private clinics' entry into the nation's public medical insurance system helps private ones expand their business and get reliable income from the nation's public medical insurance pool.

The policy is convenient for patients, who can get treatment in their neighbourhoods, and diverts patients from key hospitals, according to Hong Mi, vice-director of the National Institute of Hospital Administration, which is affiliated with the Ministry of Health.

Allowing doctors to work in more than one hospital will facilitate private medical institutions to share veteran practitioners with big State-owned hospitals.

A lack of experienced doctors has been a bottleneck for the development of the private medical sector, as doctors were limited to working in one place and good doctors wanted to stay in State-owned facilities that offer prestige and retirement benefits.

The policy said State-owned hospitals should give up dependence on drug sales. They will be allowed to increase charges for diagnosis, operations, hospitalisation and other services, and will have to sell medicines at their purchase prices.

"That will make our private hospitals compete with the State-owned ones," said Yan Yubin, founder and president of Xi'an Jiren Hospital, one of the top three comprehensive hospitals by fixed assets in Shaanxi province.

Private hospitals generally charge more for operations and services than State-owned hospitals in China.

Charity organisations and commercial insurance companies can use their advantages to operate medical institutions, said Wang Guochang, director of the Tsinghua Cambridge Investment Management centre. Charity organisations can do better in the non-profit sector, and the latter can combine their businesses with healthcare services.

The new programme also said the nation will further improve the commercial medical insurance industry, making it a supplement to the public medical insurance system, and meet the diversified needs of the public.

"The policies look rather good, but I worry if these can be well implemented or not," said Xu Liyan, a medical analyst at Samsung Economic Research Institute.

At present, State-owned hospitals are categorised as public institutions, which enjoy government support in terms of finance and personnel administration. They are under the supervision of the Ministry of Health and some other government departments.

Private institutions are regarded as businesses that must make money to support themselves. They are supervised by the industry and commerce departments.

"Such a separate system makes many things confusing," Xu said.

"Introducing private clinics into the public medical insurance system seems good, but who will supervise those clinics to guarantee medical insurance funds are used properly and reasonably?"

Since last March, as a pilot city, the Beijing medical authorities have allowed doctors to work at up to three hospitals.

But so far, few doctors from key State-owned hospitals have chosen such arrangements, according to Zhou Shenglai, vice-president of the Beijing Anzhen Hospital, one of the key State-owned hospitals.

"The doctors are very busy and have no energy or time to work in more than one place," Zhou said.

Xu said that there are still no detailed policies on how to coordinate among various medical institutions on issues related to personnel management, salaries and professional title recognition.

Concerning planned medical service charge increases, Hong said that is necessary and urgent, but the question is, how high?

"The central government asked local governments to formulate their own policies. Given the various economic conditions in different parts of China, the gaps might be very large.

"It will make cross-region medical care very difficult and unfair to some patients," Hong said.

Reform is a must, but it faces many challenges and requires detailed policies, according to Xu and Wang.

Under the 12th Five-Year Development Plan (2011-15) for the medical industry, hospital beds of private medical institutions will make up 20 per cent of the national total by 2015.

At the same time, non-profit institutions are expected to provide services for 20 per cent of patients.

So far, the hospital beds of private medical institutions only make up 8 per cent of the total beds, and they treat less than 10 per cent of all patients, said the Chinese Hospital Association.

Liu Jie
China Daily



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