II. Reform of Medical and Healthcare Systems

With years of effort, China has made remarkable achievements in the development of its healthcare undertakings, which, however, still fall far short of the public's demands for healthcare as well as the requirements of economic and social development. Especially when China turned from a planned economy to a market economy, the old medical care system has undergone great changes. So it became an issue of major importance for the Chinese government to provide better and more accessible medical and health services to the public. In the 1980s, the Chinese government initiated reform of the medical and healthcare systems, and speeded up the reform in 2003 after a success was won in the fight against the SARS. In March 2009, the Chinese government promulgated the "Opinions on Deepening Reform of the Medical and Health Care Systems," setting off a new round of reform in this regard. The basic goal of this reform was to provide the whole nation with basic medical and health services as a public product, and ensure that everyone, regardless of location, nationality, age, gender, occupation and income, enjoys equal access to basic medical and health services. And the basic principles to be followed in the reform were to ensure basic services, improving such services at the grass-roots level and establishing the effective mechanisms.

Medical reform is a social program that covers a wide range and involves difficult tasks. And it is a hard and complicated task to deepen this reform in China, a developing country with a large population, low per-capita income and a wide gap between urban and rural areas. For over three years, the Chinese government has worked hard to strike a balance between improving medical and health services on one hand and economic and social development on the other, trying to find a solution to this worldwide problem. Thanks to the persistent efforts made, China has made positive progress in this new round of medical reform.

The basic medical care systems cover both urban and rural residents. By 2011, more than 1.3 billion people had joined the three basic medical insurance schemes that cover both urban and rural residents, i.e., the basic medical insurance for working urban residents, the basic medical insurance for non-working urban residents, and the new type of rural cooperative medical care, with their total coverage being extended from 87% in 2008 to 95% in 2011. This signaled that China has built the world's largest network of basic medical security. Medical care financing and the reimbursable ratio of medical costs have been raised, and the government subsidy standards for the new rural cooperative medical care system were increased from 20 yuan at the beginning to 200 yuan per person per year in 2011, benefiting 1.315 person/times in 2011 as against 585 person/times in 2008. The reimbursement rate for hospitalization expenses covered by relevant policies has been raised to around 70%, and the range of reimbursable expenses has been expanded to include outpatient expenses. Real-time reimbursement has been adopted for medical expenses, making it more convenient for people to have their medical costs settled. Reform has been carried out in respect of the forms of payment to include payment by person, payment by disease and total amount pre-payment, enabling medical insurance to play a better restrictive role over medical institutions as well as to control expenses and compel the medical institutions to improve their efficiency. Critical illness insurance has been included in the new type of rural cooperative medical care system. By 2011, some 230,000 patients of congenital heart disease, advanced rental diseases, breast cancer, cervical cancer, multidrug-resistant tuberculosis and childhood leukemia had been granted subsidies for major and serious diseases, with the actual subsidies accounting for 65% of their total expenses. In 2012, lung cancer, esophagus cancer, gastric cancer and eight other major diseases were included in the rural pilot program of insurance for the treatment of major diseases, and the reimbursement rate reached as high as 90%. Critical illness insurance has been introduced for both urban and rural residents, in which certain amounts of money are earmarked in the medical insurance fund for non-working urban residents and that of the new type of rural cooperative medical care to buy critical illness insurance policies from commercial insurance companies, aiming to relieve urban and rural families of the heavy burden of catastrophic medical spending. The policy of subsidy for critical illness insurance, which covers no less than 50% of the actual medical costs, provides a guarantee for the compliance costs to be shouldered by the individual after reimbursement from the basic medical insurance. This has effectively reduced the financial burden of individuals. An urban-rural medical assistance system has been established and improved, which at first covered urban and rural subsistence allowance recipients and childless and infirm rural residents who receive the so-called "five guarantees," and is now extended to cover those who are severely ill and have low comes, the severely disabled, senior citizens from low-income families, and some other groups with special difficulties. In 2011, the urban-rural medical assistance was granted to 80.90 million cases across the country.

A basic system of drugs has been developed from scratch. A system for the selection, production, supply and use of basic drugs, and cover of them in medical insurance has been put into place. In 2011, the coverage of this system was extended to all grass-roots medical and health-care institutions run by the government, where these drugs were sold at zero profit, practically eliminating the practice of hospitals subsidizing their medical services with drug sales. A national guideline for the clinical application of basic drugs and a formulary have been drawn up to ensure that basic drugs are used according to due procedures at grass-roots medical institutions. A new mechanism has been established for the procurement of basic drugs, under which the basic drugs are to be purchased by provinces. As a result, the prices of basic drugs at grass-roots medical and healthcare institutions have dropped by 30% on average, as compared with those before the reform. The basic drugs have all been included in the list of reimbursable drugs covered by basic medical insurance. Also, efforts have been made to supply basic drugs in an orderly way to village clinics and non-governmental medical institutions at the grass-roots level. The steps of reform have been quickened in drug production and circulation, and the supply of drugs has been better ensured.

Urban and rural grass-roots level medical and health services have been further improved. The government has invested more to ensure the funding for grass-roots medical and healthcare institutions. From 2009 to 2011, the central government invested 47.15 billion yuan to support the building and development of grass-roots level medical institutions. Diverse forms have been adopted to strengthen the ranks of healthcare workers at the grass-roots level, and preferential policies have been made to train and introduce competent personnel for rural and community healthcare. A system of general practitioners (medical workers with sufficient knowledge in all branches of medicine) has been established, under which general practitioners are trained in the regular way; grass-roots medical and healthcare workers are enrolled in training courses for upgrading them to general practitioners; and medical students are specially trained for the needs of central and western urban areas, for which they do not have to pay their tuition fees. A project, known as "ten thousand doctors extending support to rural medical care," has been launched. From 2009 to 2011, over 1,100 Grade-III urban hospitals extended support to 955 rural county-level hospitals every year, and urban medical institutions above Grade II in central and western China granted aid to over 3,600 township hospitals every year, thus helping improve the overall technological level and management of the county and township hospitals. Meanwhile, the mode of medical services has been changed. Touring medical services have been provided in township hospitals; and in the urban districts ranks of general practitioners have been formed and a system of family doctors has been set up. Prevention has been combined with the treatment, measures have been taken to ensure basic needs of the residents to see doctors and make it possible that the diagnosis and treatment of most commonly seen and frequently occurring diseases are performed at the community level. After years of effort, community-level medical and healthcare system has been strengthened; marked changes have taken place to the situation of backward facilities and poor services in rural and remote areas; community-level medical workers have increased in number, and their educational background and knowledge have improved. In 2011, the number of grass-roots medical and healthcare institutions across the country reached 918,000, including 26,000 urban community service centers, 38,000 township hospitals and 663,000 village clinics, and the number of hospital beds reached 1,234,000.

Access to basic public health services has become more equitable. The state provides all residents with a free package of 41 basic public health services in ten categories, including health record, health education, preventive inoculation, healthcare for children under six, healthcare for pregnant and lying-in women, healthcare for elderly people, treatment for hypertension and type II diabetes patients, healthcare for severe psychosis patients, reporting and handling of infectious diseases and public health emergencies, and healthcare supervision and coordination. Targeting special diseases, key groups and special areas, the state has launched key public health service programs, including subsidizing rural pregnant women for hospitalized childbirth, re-vaccinating people under 15 against hepatitis B, eliminating fluorosis caused by coal burning, supplementary taking of folic acid by rural women before pregnancy and in the early stage of pregnancy, building sanitary toilets, cataract removal for poor patients, cervical and breast cancer tests for rural women within eligible age, and preventing mother-to-child transmission of AIDS. In 2011, the inoculation rate of the National Immunization Program (NIP) exceeded 90%; the rate of hospitalized childbirth nationwide reached 98.7% (98.1% in rural areas); and the maternity mortality rate in rural areas kept going down. In the rural areas, 72.1% of the population had access to tap water and 69.2% had access to sanitary toilets. In 2009, the government launched a program to provide cataract operations for a million poor patients, and by 2011 more than 1.09 million such people had had such operations with government subsidies.

The reform of public hospitals has been carried on in an orderly way. In 2010, the Chinese government started pilot reforms of public hospitals in 17 state-designated cities and 37 province-level districts; and positive progress has been witnessed in improving services, innovating institutions and mechanisms, strengthening internal management and speeding up the creation of a situation in which hospitals are established and run in diversified forms. In 2012, the government launched a pilot comprehensive reform of county-level public hospitals, aiming to improve rural system of medical services with the county hospitals playing the leading role, and enabling 90% of the population in a county to see doctors. So far, over 600 counties in 18 provinces, autonomous regions and municipalities directly under the central government have been included in this reform. The government has worked hard to improve medical services, optimize the allocation of medical resources, and enhance the medical capabilities of weak areas and weak fields. The capabilities of key clinical specialties in regional medical centers and county-level hospitals to deliver medical services have been enhanced, and the mechanism of division of responsibilities and cooperation between public hospitals and community-level medical institutions is being studied and formed. The government has intensified efforts in the creation of a situation of establishing and running hospitals in diversified forms, encouraging and guiding non-governmental funds to establish both for-profit and non-profit medical institutions. By 2011, there were 165,000 medical institutions established with non-governmental investment, including 8,437 private hospitals, accounting for 38% of the national total. Doctor-appointment service, time-phased outpatient service and high-quality nursing service that bring benefits and convenience to the people have been introduced nationwide. The fast price growth of medicine has been contained. In comparable prices, the growth rates of average outpatient and inpatient costs in public hospitals has decreased year by year in the past three years, and that of 2011 went down by eight percentage points from that of 2009, reaping initial results in expense control for public hospitals.

The new round of medical reform has brought substantial benefits to both urban and rural residents. Access to basic public health services has become much more equitable; the gap between urban and rural areas and between regions has been narrowed in medical development; medical services in rural and remote areas with backward facilities and weak capabilities have been remarkably improved; medical services have become more affordable and accessible; and fewer and fewer people are becoming poor or return to poverty because of illness.