China Implements Healthcare Reform Plan

On January 21, China’s State Council approved the implementation of China’s long-awaited healthcare reform plan. All levels of government will be investing a total of RMB 850 billion (approximately US $124 billion) over the next three years to implement the changes in the reform plan.

The Chinese healthcare system has long had major issues, prompting widespread calls for reform. China has an imbalanced healthcare system, with most of its resources available to urban residents, but very little to rural residents. Hospitals are poorly funded, so they function largely on profits from drug sales and service fees, which have made prices often unaffordable for patients.

To correct these problems, the government plans to reform many areas over the next three years. The government will help build or renovate local hospitals, health centers, and clinics to improve the primary medical care system. The management and operation of public hospitals will also be reformed in a pilot system in several cities. If the government’s reform experiments are successful, then those reforms will be expanded to include the entire system. Also, government subsidies will be raised to help promote public access to healthcare. Government subsidies for basic medical insurance programs should enhance basic medical insurance programs to cover more than 90% of urban and rural residents. Finally, China will establish a national essential drug system, i.e., a systematic way to determine what drugs should be on the national essential drug list. Most small public clinics and healthcare centers are required to purchase essential drugs, and larger hospitals must operate under a ratio of essential to nonessential drugs. All essential drugs will also be added to the national drug reimbursement list for basic medical insurance programs.

By 2011, China aims to cover all urban and rural residents with basic medical insurance, improve access and standards for basic medical care, and reduce unaffordable healthcare for all citizens.