On July 28, 2006, China’s Ministry of Health announced most individual hospitals would be banned from purchasing expensive medical equipment. For equipment costing over two million yuan (about US$250,000), public hospitals at the county level or higher and nonprofit medical institutions attached to state-owned enterprises must use a central system of collective purchasing.
The Ministry said it hopes that by enforcing a collective purchasing policy, it will become more difficult for doctors and administrators to accept kickbacks for unnecessary or overpriced equipment. The new system, to be put into operation over the next two years, would be organized through provincial health departments.
At the same time, the Ministry also announced a national assessment system for medical equipment. The China Association of Medical Equipment (CAME) was recently authorized to conduct evaluations and issue standards on medical devices. This is meant to provide hospitals with better information with which to make purchasing decisions.
China’s medical device market is estimated to grow from US$4.5 billion this year to over US$12 billion by 2010. The Ministry hopes its plans will decrease waste of resources by establishing a more centralized, efficient system of procurement.