Communist health minister quotes Adam Smith to support privatisation of China's hospitals

by Michael Woodhead
In its inimitable way, the Chinese government is dressing up a very capitalist idea in socialist clothing and presenting it as "a Chinese solution to a Chinese problem". The problem in question being the mismatch between supply and demand in medicine - too many patients and not enough doctors. Or put more simply, overcrowded hospitals. In the Peoples Daily, the former health minister Chen Zhu and leading Communist Party member Chen Zhu is quoting Adam Smith and talking about market solutions to the Chinese healthcare system. He speaks a lot of jargon but the take home message is that doctors deserve to be paid a lot more - they work hard to qualify as doctors, they do a demanding job and work long hours, but get paid a pittance and get no respect. And thus his conclusion is that medical reform must "move into the deep water zone" and tackle doctors' income. Doctors need a high income to be motivated, he says, and the income must not come from sales of drugs - as it does at the moment. Therefore to rebuild trust in the medical system and to put it on a more sustainable path, doctors must earn more - and therefore must charge more. An accompanying article notes that itcosts only 5 yuan to register for treatment at a public hospital, whereas it costs a few hundred yuan for a woman to get her hair done. Why does a hairdresser charge a higher fee than a doctor? [Misleading question - the 5 yuan fee is only to register for treatment - actual out of pocket costs can be astronomical, running to thousands per day for inpateint treatment].
Chen Zhu says "we entrust our health and our lives to doctors but expect them to accept only 5 yuan."
The article says that like many other aspects of Chinese life, healthcare has become a market - and people want the best. The big improvements in roads - and expectations means that people i regional areas are no longer satisfied to go to their local community clinic or county hospital for treatment. When they get sick they get i the car and drive to the big city hospital. Chen Zhu says people have rights to access healthcare, but they also have responsibilities to use the system properly and not to abuse it. He says legislation alone cannot force people to go to community clinics, but there needs to be a more orderly gatekeeper system to stop the overloading of major hospitals - and also the drain of talent from local hospitals and clinics to big city medical markets. His article is short on specifics when it comes to answers - but hints at the usual privatisation slogans of using 'social capital' (ie private investment) and greater flexibility in medical models (ie deregulation) as the way forward. As with so many other areas of Chinese reforms, it's state-directed capitalism decorated with a  few socialist-sounding phrases.

Ways to ease doctor-patient tensions

by Hu Jia 
The number of incidents against doctors and nurses in 2013 has increased nearly 8 percent compared to 5 years ago, according to figures released by the Chinese Hospital Association. Over-prescription by doctors, a way to increase revenue for hospitals and doctors themselves, is believed to be a source of increasing complaints by the patients.
Data shows about 40 percent of hospital revenue comes from medicine sales, with another 40 to 50 percent from diagnostic tests and treatments.
The Chinese government has been tackling the problem in recent years.
Chen Zhu was former Chinese Health Minister, who stepped down from the post in March 2013.
He said the government aims to relieve doctors the burden of marketing medicines.
"To separate drug sales from medical treatment, we have rescinded the policy for hospitals on medicine prices, under which hospitals were allowed to raise prices by up to 15 percent. This would help curb over-prescription and unnecessary check-ups."
It's hoped the reform effort will help reduce costs in the healthcare system, reducing patient complaints and violence.

Now for the hard part: reforming city hospitals

China's ongoing medical reform has already entered its most difficult stage, Minister of Health Chen Zhu has said.
He made the remarks at the launch of the China-World Health Organization Country Cooperation Strategy 2013-15.
The strategy outlines a medium-term framework for cooperation between the Chinese government and the WHO to improve the health and well-being of Chinese people.
"By 2015, when all county-level hospitals are reformed, the program will be expanded to large city hospitals, which will be very difficult," Chen said.
As China has nearly achieved universal healthcare by covering about 95 percent of the population under some form of health insurance, reforms to public hospitals will be on top of the working agenda, he said.
The essence of the reform is to cut public hospitals' financial dependence on drug sales, a mechanism that easily results in excessive examinations and prescriptions, health policy experts said.
Zhang Liming, deputy director of the WHO collaborating center for primary healthcare in Shanghai, said the reform is aimed at improving public access to affordable medical care at public hospitals.
"Public hospitals should serve as a base providing essential healthcare to the people rather than a profiting institution," he said.
However, finding a proper way to compensate them is crucial, Zhang pointed out, proposing government support.
According to Chen, by the end of the year, about half of the nation's county-level public hospitals will be reformed and for that, the government would largely subsidize their operation.
At present, 70 percent of the nation's population, mainly farmers, get medical care at county-level hospitals, the Ministry of Health said.
Given that county-level hospitals are relatively small and totally subject to the control of health administrations, "they were chosen as the starting point of the reform", explained Wu Ming, assistant director of the Peking University's Health Science Center.
"The reform will surely reach large hospitals in cities by 2015 when all county-level ones finish it," Chen vowed, urging more support from large hospitals for the reform.
As sporadic experiments, several major hospitals in cities such as Beijing and Shenzhen launched the reform in July, previous reports said.
Under the pilot program, the long-established 15 percent markup on drugs was scrapped while the fees for seeing the doctor were raised.
"That's more like a restructuring to the insurance payment pattern," Zhang explained.
In fact, the government didn't pay extra for the change, he added.
"The annual revenue of large hospitals usually amounts to hundreds of millions yuan, and that's impossible for the government to absorb," he said.
Huang Jiefu, vice-minister of health, said the success of China's medical reform lies in medics' hands, thus it's important to find ways to compensate their potential losses and encourage their enthusiasm for work.
Source: People's Daily

China's health minister visits Cameroon

Chen Zhu, Minister of Health of the People’s Republic of China says his four-day working visit to Cameroon is to further develop existing cooperation ties between both countries particularly in the health domain. He was speaking to the press on Saturday, January 12, 2013 at the Nsimalen International Airport in Yaounde.
He was received upon arrival by Cameroon’s Health Minister, Andre Mama Fouda and H.E. Wo Ruidi, Ambassador of the People’s Republic of China to Cameroon, amongst others. “In the future, our cooperation should be further developed to benefit our peoples because we can learn from each other,” he confided.
After a working session with the Chinese Medical Mission and a visit to the River Nyong yesterday, Sunday January 13, 2013, H.E Chen Zhu will be received in audience this morning, January 14, 2013 by the Minister of Public Health. He will later in the afternoon preside the ceremony to hand over gifts to the Yaounde Gynaeco-Obstetric Hospital. In the evening, he will be guest at a State dinner offered by Andre Mama Fouda.
Tomorrow, Tuesday January 15, H.E Chen Zhu will be in Douala to appraise ongoing work at the new Gynaeco-Obstetric Hospital in Yassa, Douala which will have a 300-bed capacity and will be one of the most important in its category in the sub-region.
Health ministry officials say the working visit is an opportunity to highlight milestones in cooperation since the signing of the first bilateral health cooperation agreement between both countries in October 1, 1975. In effect, major achievements in 40 years include development of health infrastructure, 16 two-year medical missions, donation of medical equipment to Chinese-constructed hospitals, anti-malarial drugs, research, financing and scholarships to local health personnel.
Source: 20Mai

Price of drugs to be reduced by up to 20%

Price cuts of up to 20% will be implemented for 20 classes of medicines

The prices of about 400 drugs for respiratory diseases, fever and pain will be cut by up to 20 percent from February, in a move to make medicines, including some products from Pfizer, GSK and Novartis, more affordable.
It will be the fourth such price cut since 2011 and is part of reforms since the early 2000s to make healthcare cheaper and more accessible.
China's National Development and Reform Commission (NDRC) said in a statement on Tuesday the latest round of price cuts involved 20 broad classes of medicines and would include specialty drugs.
As the government cracks down on costs, more Chinese drugmakers are fighting thinning margins. Sinopharm Group Co Ltd - China's largest drug distributor - and smaller rivals like Sihuan Pharmaceutical Holdings Group Ltd are expanding their distribution networks to get bigger slices of the market to offset increasing pressure on margins.
Faced with patents running out in the West, bigger foreign pharmaceutical companies, such as Pfizer and AstraZeneca, have hitched their futures largely to sales in developing markets including China, India, Eastern Europe and South America.
The average reduction in the latest round of price cuts will amount to 15 percent, although the cut will be as high as 20 percent for the most expensive drugs.
Earlier rounds of price cuts included antibiotics, anti-tumor, hormonal and blood-related medicines, and drugs for the circulatory, nervous, digestive and immune systems.
Health Minister Chen Zhu told a health conference on Monday that healthcare was still too expensive and there was still inadequate control over the improper use of drugs.
China, with an ageing population, is overhauling its health system and has made big strides since 2003. It now has a basic universal medical insurance system and heavily subsidizes a growing list of essential drugs.
But many challenges remain in the country of 1.3 billion people, including a lack of state funding for hospitals, where drug sales, often at inflated prices, remain a major source of income.
Source: Yahoo

Health minister Chen Zhu aims for 70% medical cost reimbursement

China's Health Minister Chen Zhu has set out a goal to reimburse 70 percent of the patients' medical costs by 2015.


"In order to achieve this goal, we need to limit the use of drugs and treatment methods that are not on the list of essential medicines, this is the only way to make sure medical costs are not too expensive to the public."

The current medical coverage offered to Chinese patients stands at about 50 percent.

Chen says China's health authorities will increase the essential drug list soon by 70 percent to ensure their availability at all times.

The health ministry will also increase the amount of reimbursement for patients who go to nearby clinics. 

This is to discourage them from opting for larger hospitals for minor ailments.

"Community level clinics will be equipped with drugs on the essential medicine list. In mid-sized hospitals those essential drugs will account for 40 to 50 percent of the druge usage. As in large hospitals the percentage should be at 25 to 30. We will issue regulations to strengthen our supervision of doctors' prescription."

Health care fees, medical checkups and nursing for the elderly are also set to be included in expanded medical insurance.
Source: CRI