China Issues Priorities for National Health Care Reform

Last month, the Chinese government announced sixteen new priorities of the ongoing Health Care Reform. These priorities draw attention to public hospital reform, medical insurance, and essential drugs. They will take top precedence from April 2010 until the end of March next year.

There are two priorities with regards to hospital reform. The first is to reduce drug price markups at hospitals by providing government subsidies. The second is to create a system called the DRG (diagnosis related group) to rein in medical expenses on more than forty types of diseases.

Priorities for medical insurance reform include higher reimbursement rates for both urban and rural residents under their respective insurance programs for inpatient expenses. The government is also pushing to reimburse patients at the time of discharge, as opposed to making delayed reimbursements. In addition, greater government subsidies will be allocated towards cases of leukemia and congenital heart disease in children.

Priorities for essential drug reform include pushing the SFDA for a rise in production standards for all types of national essential drugs. Additionally, a National Development and Reform Commission is being tasked to examine the market supply and demand of essential drugs and adjust respective prices accordingly.