Doctors lose, retail pharmacies win as government cuts the hospital monopoly on dispensing

by Michael Woodhead
The Chinese government appears to have side-stepped the influential doctors' lobby and the tame health ministry by using the Ministry of Commerce to tackle the perennial problem of drug sales commissions and the inflated cost of medicines.

Doctors in China rely for much of their income on commissions and bonuses from sales of pharmaceuticals, and previous efforts to curtail the profits have been stymied by medical lobby groups. The Ministry of Health, previously led by a medic Dr Chen Zhu (who now heads the Chinese Medical Association), has managed to block or delay previous efforts to tackle the drug commissions problem.

Now the government has turned to the Ministry of Commerce to introduce new rules that separate medical services and drug sales in 34 pilot cities across the country, in an attempt to lower the high cost of medicines. The National Health and Family Planning Commission (which absorbed the Ministry of Health last year) has been sidelined by the move, a sign that its own efforts at reform have failed.

Under the new Ministry of Commerce plan, major city pharmacies will replace hospital pharmacies as the source of prescription drug dispensing, putting an end to the lucrative 'gold mine' of revenue for hospitals. In theory, this will mean that hospitals should no longer pressure their doctors to prescribe more and reach quotas to boost revenue via the hospital pharmacies. And by breaking the hospital pharmacy monopoly, the new plan will lower drug prices by encouraging competition between pharmacies.

According to Caixin, previous efforts to break the drug sales-hospital income link have failed because of entrenched opposition from the former Ministry of Health. The ministry pushed a plan under which local governments purchased pharmaceuticals on behalf of local hospitals, but this scheme was ineffective in breaking the stranglehold of hospitals on drug demand and also proved to be yet another channel for corruption.

 The new scheme will also permit more pharmacies to become eligible for reimbursement under the various medical insurance system. These moves will further increase diversity and competition and give pharmacies a boost in business, commentators say. However there has been no analysis of how public hospitals will make up for the huge gap in revenue when their lucrative pharmaceutical monopoly is snatched from them.

Why China's well-meaning rural health reforms are destroying township hospitals

by Michael Woodhead
In the hierarchy of Chinese healthcare, rural township hospitals occupy the second to bottom rung, below country hospitals, but above village clinics.  They are an essential component of the Chinese health system, especially for rural people on low incomes, but they are collapsing because of ill-planned rural healthcare reforms started in 2008.
The big change that is destroying township hospitals is the attempt by the health ministry to make drugs affordable and stop doctors from profiting from commissions on the sale of medications. To do this, the ministry brought in a new system that restricted township hospitals to using medications on an essential drugs list, all of which are sold at zero commission. This made drugs more affordable to rural people, but it also meant that township hospital doctors lost their main source of income. To compensate, doctors were put on fixed salaries equivalent to those of secondary school teachers. The Chinese government also created an affordable rural health insurance scheme that would provide reimbursement for inpatient care - and less so for outpatient care.
In theory, this sounds like a recipe for affordable and equitable healthcare for rural residents. So what went wrong? The first problem was that the health ministry forgot to consult with rural doctors on the likely impact of the scheme. The unintended consequences of the reforms have meant that they have done the exact opposite of what they were intended to do - they have weakened the township hospital system to the point where it is being abandoned by doctors and patients alike, all of whom are fleeing to the larger and better equipped country hospitals. Why is this?

In a new paper in the journal Social Science and Medicine, China health experts including Dr Theresa Hesketh from the University of London report on a series of interviews with rural health workers and patients, who describe the impact of the health reforms.

1. Essential Drugs List
The main complaint of rural health workers is that the essential drugs list is too narrow, and it prevents them from doing their job properly. Many doctors have found that the drugs they need are simply not available, and as a result patients have to go to a country hospital, where the essential drugs lists (and capped prices) are not enforced. Thus patients end up having to travel long distances for treatment and also have to pay more for their drugs. Another problem with the essential drugs list is that drugs are often not in stock because the low prices mean that drug companies have little incentive to produce them to a good quality standard.

2. Doctor Incomes
A second problem with rural health reforms relates to the switch to fixed salaries of doctors - a return to the 'iron rice bowl' of the Mao years. This means that doctors no longer have an incentive to see more patients or work more flexible hours, such as night shifts or in mornings and evenings when rural residents may be free from farmwork. Doctors now get paid regardless of how hard they work, which is a disincentive. The low level of the fixed salaries is also demoralising because doctors see themselves (rightly or wrongly) as more highly qualified and skilled than secondary school teachers, whose salaries are used as a benchmark.

3. Inadequate health insurance
One of the main anomalies of the New Rural Cooperative Medical Scheme is that patients get more reimbursement for inpatient treatment fees (70%) than outpatient treatment fees (30%). This creates a perverse incentive for patients to get admitted to hospitals, even for minor illness. However, the low ceiling of the health insurance cover (about 200 yuan a year) means that it fails to protect patients who have catastrophic health costs due to serious or chronic illness.

The net result of the reforms has been the demoralisation and de-skilling of rural doctors because they have seen their income drop and their ability to treat patients curtailed. Not surprisingly, many doctors have joined a brain drain from township to county hospitals, where they can earn higher incomes (from drug sales) and have more clinical freedom to prescribe what they want.

Dr Hesketh says the reforms have done some good in the poorest rural areas of China, such as those in Yunnan. There they have made drugs more affordable and guaranteed doctors some income. But in more mainstream parts of China such as Zhejiang the reforms have had a negative impact. The problems might have been averted or minimised if doctors had been consulted about the reform before they were implemented. She suggests that the way forward will have to involve raising doctor's incomes and also expanding the scope of the essential drugs list. Giving rural doctors a 'gatekeeper role' - like primary care physicians may also help, but will prove unpopular with Chinese patients who are used to going direct to the hospital. Dr Hesketh says there is also a need to improve insurance cover and the 'supply side' problems such as overservicing and price gouging.

In the meantime, China is left with a broken health system in need of repair to fix the damage caused by early reforms. Let's hope Health Minister Li Bin is paying attention.

Ask me no questions .... a bland press conference hosted by the NHFPC

by Michael Woodhead
For some reason, Chinese state media is running a transcript of a press conference convened by the National health and Family Planning Commission. It contains very little new or newsy, but does show how these events differ from those in countries with a free(er) media. Given the long and detailed replies, it's obvious that the questions and answers are pre-prepared. And it's all a bit of a whitewash from the start. The un-named 'journalist' first asks about the health of China's women and children. The reply is filled with the usual numbers and statistics to back up [genuine] improvements in maternal and child health. It avoids any discussion of 'sensitive' subjects such as abortion rates, female suicide, sex-selective fertility clinics and gender disparities in health.
The journo than asks a more pertinent question about the health of China's huge floating population of rural migrant workers and their families. This is one of China's most disadvantaged groups, as they lack health insurance cover in their place of residence - their rural insurance (if any) is not potrtable to cities and offers only paltry levels of reimbursement.
However in the press conference this topic is deflected with a bland reply about how services for rural migrant healthcare have improved in recent years. It also claims that "up to" 92% of migrant families have access to health services such as immunisation. This is incorrect - as I have reported here in recent months, immunisation rates  are very low for children for rural migrants because most are ineligible for urban health services.
The press conference then moves on to preparations for the two child policy and prevention of birth defects through folic acid supplementation. It also touches on the dismal rates of breastfeeding in China, which have collapsed in recent years as newly wealthy Chinese women opt for baby formula. The press spokesman says that breastfeeding will be promoted by policies that 'hope' employers will provide nursing areas in workplaces.
The only point of interest is the pledge that 'VIP wards' (or special medical services as the spokesman euphemistically describes them) will be phased out of China's public hospitals, with new private hospitals expected to take on this role.
All in all, a fairly standard piece of non-news.

The anti-corruption crackdown gets serious in Guangdong's health system, yields 7 million yuan

by Michael Woodhead  
The effects of Xi Jinping's anti-corruption crackdown are being seen in Guangdong's health system, with health department leaders using stern words and making grave threats against wrongdoers. A report in Guangming Daily says the crackdown on Hong Bao (red envelope bribes) and commissions has already uncovered 7 million yuan and exposed thousands of corrupt staff. The provincial health department head Chen Yuanshang has made dire threats of punishment to any health staff who continue to accept bribes or kickbacks for services. He told the newspaper that Discipline Inspection teams would be renewing their efforts to expose corruption in the health services and would be making unannounced visits to health institutions and looking into the books. He made a speech using all the most stern warnings typically used by officials such as "severe punishment without exceptions" for malpractice and unethical behaviour by public hospital staff. He also noted that many health managers and clinical staff were not taking the anti-corruption drive seriously and were only paying lip service to it. He singled out the relatives of high officials and doctors, saying they would not escape punishment if found to be involved in financial irregularities such as receiving bribes and commissions or overservicing. He reeled off some figures of corrupt practices exposed already including 1362 cases of kickbacks/commissions to the value of 3.4 million yuan involving 3142 individuals. There have also been 5248 cases of bribery (red envelopes) involving 3.74 million yuan. Chen vowed there would be 40 teams of 'secret shoppers' visiting hospitals and health departments to see if staff were still accepting bribes. He also expected all health units to organise their own inspections and to report back on the findings and the disciplinary action taken. He reminded health staff of the "Nine Forbiddens" - the nine kinds of corrupt and inappropriate behaviour (such as overservicing) that should be avoided by health service institutions.

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.

Beijing’s 3-point reform plan for maternity services

by Michael Woodhead
Maternity services are to shift from hospitals to community health centres and women will not be allowed to have routine Caesareans unless there is a valid medical indication, Beijing health officials have announced.
New reforms are needed in maternity policies to cope with the expected increase in births as China moves to a two child policy, according to the city health department.
Under new measures, three new basic policies will be introduced. These are for women to register first with a community health centre rather than a maternity hospital. Following tests at six week of pregnancy, women will be enrolled on the maternity database, and women will then be graded into one of four levels according to risk of pregnancy. Only high-risk pregnancies (such as in older women) will be managed in tertiary level hospitals. Low risk births will be managed in local hospitals and clinics, the new policy states. In addition, women will no longer be offered caesarean section unless there is a good medical indication. The head of Beijing maternity services department says caesareans must be discouraged because China already has a 45% rate, which is much higher than the WHO benchmark of 14%. In addition, caesarean birth mean women spend longer in maternity hospitals, taking up scare resources, she said.
Health officials said the maternity system was already at breaking point with something like 94% occupancy of obstetric beds and thus no additional capacity to cope with a two child policy. Maternity services will be expanded but they also must be used more rationally, the officials said. By managing low risk pregnancies outside the hospital system, this will free up beds to deal with high risk pregnancies, they said.

Can you legislate to make better doctors?

 
by Michael Woodhead
New draft legislation released by China's National Health and Family Planning Commission seeks to make doctors practise medicine in a more humane and 'patient-centred' way. The new regulations will make it a criminal offence for a doctor to neglect to treat a patient, and will force doctors to take responsibility for the adverse outcomes of any patient that they fail to treat in a reasonable and timely manner.
Released at the behest of the State Council, the "Medical Treatment Quality Management Regulations (Draft)" is a wide ranging document that aims to improve the quality of medical treatment by spelling out the doctor's duties and also highlighting prohibited practices.
The new rules state that it will be a criminal offence for medical staff to refuse to take responsibility for patients in need or treatment, and staff must bear the consequences of any damage or injury that results from failing to provide treatment. The NHFPC says the new legislation also requires health providers to have mechanisms in place to accept and respond to medical complaints in a timely manner. It says medical staff must act in a humane and patient-centred way to carry out the core responsibility of "healing the wounded and rescue the dying". Staff must show respect to the patient and uphold their rights. The new rules also require medical personnel to use medications responsibly and to have a good knowledge of how they work and their efficacy. They also make it a criminal offence to use non-approved drugs, medical procedures, equipment.

Universal health coverage in China - are we there yet?

by Michael Woodhead
An interesting reference article in The Lancet today comparing the progress to universal health coverage in the BRICS countries (Brazil, Russia, India, China, South Africa ...). The section on China I presume is written by Professor Wang Kongde of the School of Public Health at Peking University.
Some of the useful facts in the article, such as China's health expenditure increasing from ¥75 billion in 1990, to ¥1998 billion in 2010. At the same time, average per-head health expenditure increased from ¥65 to ¥1490.

China has four major health insurance schemes:

1. The New Rural Cooperative Medical Scheme (NRCMS) - started in 2003, now covers 812 million farmers (ie 95% of them), financed mainly by the government, with small contributions from farmers

2. The Urban Employee Basic Health Insurance (UEBHI) - covers 30% of population, jointly funded by employers and employees.

3. The Urban Resident Basic Health Insurance (URBHI) - cover urban residents not enrolled in UEBHI.

4. The Medical Financial Assistance system (MFA) - a relief scheme for China's poorest citizens, (70 million people), providing direct aid for the severely disabled and people with serious illness.

According to the Lancet article, the rural and urban health scheme provide 75% reimbursement for inpatient expenses (but I have heard that it actually cover much less than this and patients face high out of pocket expenses even with insurance).
These three systems, NRCMS, URBHI, and MFA, complement each other and greatly expanded the range of health service benefits.
Professor Wang say the Chinese government aims to expand the insurance schemes to reduce health spending to less than 30%. For example, subsidies to rural residents will increase to ¥360 by 2015.
"Meanwhile, efforts will be made to standardise and improve reimbursement plans, enhance inpatient reimbursement, and undertake broad outpatient pooling fund reimbursement continuously to increase the number of people benefiting from the NRCMS," he writes.
However, he acknowledges that China's publicly-subsidised health insurance schemes face many problems in achieving universal coverage.
Like other countries, China faces an ageing population and increasing rates of chronic diseases, not to mention higher expectancy for health services.
He notes that access to health services and resources varies widely between regions. Cost control is also a major problem. Simply increasing government funding may just trigger overservicing with the use of more inappropriate tests and expensive medicines.
Thus measures on cost control are urgently needed, and also a stronger regulatory system and reform of hospital governance. Professor Wang also notes that China is going through a turbulent period of health reform, and that many in the health ministry and government are inexperienced in this area. Therefore, the road to universal health cover for China remains uncertain.

Red envelopes or red tape? Hospital doctors feel insulted by the new 'no bribes' contract they are forced to sign

by Michael Woodhead
In an effort to clean up hospitals and crack down on bribery,  patients and doctors will be required from 1 May to sign mutually-agreed contracts forbidding the giving or receiving of' red envelopes'. The new contracts, ordered by the National Health and Family Planning Commission, will be an extra step of the hospital registration process and are intended to reinforce the message that doctors can no longer rely on 'grey channels' for their income. However, a survey carried out at one Beijing hospital that has trialled the system raises the question of whether it is all just for show - and whether it is perhaps just another bit of bureaucracy to contend with. An anonymous survey carried out at the Meitan Hospital in Beijing asked 122 patients and 55 doctors what they thought about the giving of 'red envelopes' or gifts to medical staff and whether they accepted the new 'no red envelope' contract system - which has been operating at the hospital for two months.  Interestingly, about a quarter of patients said they had been prepared to give a red envelope before signing the contract, whereas two thirds of patients said they hadn't thought about it. The remainder 10% were 'definitely not' prepared to give a red envelope. About 57% of patients said they agreed with the red envelope contract, whereas about 35% said they thought it was not necessary. Of the doctors, 100% said they would not accept a red envelope or gifts from patients. Despite this, 40% of the doctors said they were not happy about signing the new contracts, and 20% said they were strongly opposed to the contracts. When asked why, doctors said they had already agreed to the Hippocratic Oath when they first donned their white coat, and they believed this was already  a contract not to accept bribes.
However, hospital manager Wang Mingxiao said that the new contract system was a visible way of showing patients and their families that the hospital staff were "clean and incorruptible".  Mr Wang said the contract system was an essential step in the hospital's setting up of an 'honest and clean' checking and monitoring mechanism to ensure ethical medical practice.

Six sick crimes: Supreme Court issues guidelines on how to manage violent medical disputes

by Michael Woodhead  
In response to a wave of attacks on doctors and nurses, China's Supreme Court has released a list of six illegal activities that will be targeted as part of guidelines on how to manage violent disputes in healthcare settings.
 The criminal activities highlighted are:

1. Attacking doctors and damaging hospital property,
2. Setting up shrines and burning paper money in medical institutions [Ed note: this is done to disrupt hospitals and extort money],
3. Restricting doctors' freedom (eg harassing doctors, blocking their movement)
4. Insulting medical workers,
5. Bringing weapons into medical institutions,
6. Instigating others (including family members) to commit crimes against medical staff.

Any violations of these guidelines will result in serious consequences, and offenders will be convicted and punished under criminal law, the Supreme Court has announced. The list is part of a new 'opinion" position statement drawn up by the Supreme People's Procurate, Ministry of Public Security, Ministry of Justice, National Health and Family Planning Commission jointly entitled "On the punishment of crimes involving medical advice, medical order and maintaining normal law". The new guidelines also call on medical institutions to prevent medical disputes by ensuring a good standard of medical care, enhance medical ethics, improve service attitudes, focus on humane care and to maintain good communication with patients. They also call on institutions to set up dispute mediation protocols to handle complaints and to offer adequate security to medical staff. "The Supreme People's Court will uphold the law while handling cases involving medical disputes and severely punish those who seriously harm or even kill doctors over groundless assumptions," said Sun Jungong, the spokesman of the Supreme Court. China had more than 50,000 serious medical disputes last year and two doctors were killed by disgruntled patients, drawing the death penalty for the offenders. The Supreme Court said disputes must be handled in a timely way and resolved by arbitration or through fast track medicolegal channels if necessary.

Hospital VIP suites: going, going, but not yet gone

by Michael Woodhead
Most major hospitals in China have a VIP suite or 'special treatment' section that offers hospital beds with 'first class service - these are typically single rooms with extra nursing cover, and their own TVs and fridges. Naturally, the cost is much more than for a typical hospital bed, and hospitals have been expanding their 'special treatment' sections to make more money. However, the National Health and Family Planning Commission has now decreed that things have gone too far and ruled that hospitals may only use 10% of their bed capacity for special treatment beds. The NHFPC says hospitals must focus on providing services that have a public benefit and not seek profits from expensive special services.
The Beijing Daily this week visited several hospitals to find out what the situation was with VIP areas of hospitals. They found that many hospitals have developed these areas in addition to the existing cadre (ganbu) sections that offer preferential treatment for government officials. Some VIP sections were developed initially to service foreigners such as consular and diplomatic staff, but have now become more focused on domestic patients.
According to the article, the official fee for a standard hospitals bed is 20 yuan per night, and for a government official section the fee is 100 yuan per night. However, the fee for a bed in the VIP section can cost 1000 yuan per day or more -  ten times the cost of the most expensive official bed. And yet there is no shortage of takers. In fact, the Beijing Daily found that at some hospitals there were waiting lists of up to 3 months for VIP beds.
Hospital managers said the beds were popular because people believed that they would get better treatment from the best doctors and face less inconvenience such as waiting times in hospital.  However, insiders said that some VIP sections were really just 'hardware' and that patients there received exactly the same treatment from the same staff as the standard hospital bed patients.
When asked how long it would take to scale back the VIP sections to the 10% limit, managers were cautious. Some said that hospital had invested substantial amounts of money in their VIP sections and were reluctant to give them up. Others said they relied on the VIP sections for hospital income, and would not be able to make major changes until the government reformed the hospital funding and staff salary arrangements for pubic hospitals. In theory the role of the VIP sections should be taken over by private hospitals and clinics that are now being encouraged to develop by the government. However, insiders said private hospitals were still in the early stages of development and they simply did not have the capacity to take on all the VIP bed clients that currently use public hospitals. Therefore they believed that the government would take a 'relaxed' approach to the scaling back of VIP sections and would not be 'rigid' in enforcement of the 10% limits.

Private health is the centrepiece of health reforms in China

A few news items from this week:

Medical tourism project for Hainan

Hainan province is building what it claims to  China's first special zone for medical travel, to try attract elderly people in search of  a cheap and clean place to spend their retirement.
The Boao Lecheng International Medical Travel Zone covers an area of about 20 square km and the provincial government will create preferential policies to attract overseas medical institutions including lower taxes for imported medical instruments and medicines. Medical tourism has been backed by China's health minister, Li Bin, who said  it "will make Chinese medical institutions take steps to adapt to international demand, so that the overall standard of medical service will be enhanced."

Private hospitals given preferential treatment

To encourage private hospitals, the government is to allow them to charge whatever prices they want and also force health insurance providers to cover treatment in private as well as public hospitals. New measures announced by the National Health and Family Planning Commission include relaxing price controls covering non-public hospital services. The decree also states that all private hospitals should be included in the country's public medical insurance schemes - so long as they reach the basic  standard for 'designated' hospitals -  and government departments should implement the same reimbursement policy for both public and private hospitals. Privately-owned hospitals have welcomed the measures, especially the decision to treat all hospitals equally regarding the reimbursement of patients' medical costs.

Foreign private doctors shown favourably on TV

Chinese TV is giving positive publicity to the handful of foreign doctors working in private clinics in China. In a programme this week CNTV says foreign doctors are "flowing" into China and helping to meet the needs of China's healthcare industry.
"Alongside providing advanced treatment for patients who can afford it ... they can contribute with their knowledge and experience, in Chinese hospitals." the programme stated.

Another doctor killed by patient

A doctor has been killed in Jiangsu reportedly by a 45-year-old male patient who was angry about the outcome of a circumcision procedure. Dr Shan Erhui was stabbed to death in the lounge of a hospital in Fengxian county on Tuesday. The suspect, Wang Fangli,  underwent circumcision in the hospital on March 30 and had antibiotic treatment afterwards, and was said to be dissatisfied with the treatment outcome and the medical expenses.

Volunteers sought to protect doctors from violence

Beijing hopes to recruit 1500 "Guardian Angel" volunteers to act as intermediaries between doctors and patients, defusing disagreements and smoothing over tensions, according to Xinhua. The plan seeks to use students and patients who will serve a one-year 'guardian' term in 21 hospitals in the capital.
“Patients will understand doctors better after talking with our volunteers,” said Feng Guosheng, head of the Beijing Municipal Administration of Hospital.

3 trillion yuan invested and doctors still underpaid

The financial journal Caixin has a feature on how doctors in China still have low incomes despite the 3 trillion invested in the health system by the government. The article says that unless reforms are introduced, medical workers will continue to be paid a pittance -  especially in small town and rural hospitals. It quotes a health ministry spokesman as saying that medical reforms will fail if the "key issue" of doctors' incomes is not solved. The government says it needs to fix the problem of low pay and doctors incomes being linked to prescribing of drugs. It aims to do this by allowing doctors to work in private clinics and to charge higher fees.

Public not happy with expensive private clinics

The Chinese government may see private clinics as the way of the future, but few ordinary citizens in Shanghai can afford their fees. There has been strong criticism of a new private hospital in Shanghai that charges patients up to 1,200 yuan to see a doctor, when it costs just 50 yuan to see a doctor in a public hospital. The opening of Shanghai International Medical Center (SIMC) is being criticised as a symbol of the move to cater only to the well-off in a society.

Are China's health reforms stalling? Health ministry denies rumours

by Michael Woodhead
In an unusual move, a spokesman for the National Health and Family Planning Commission (NHFPC) this week spent much of a press conference trying to refute rumours that the health reforms were proving "too difficult" for the NHFPC to implement.
The spokesman for  health minister Li Bin specifically rejected media speculation that the State Council had decided  that implementation of health reforms should be transferred back the the National Reform and Development Commission.
The move comes after media reports noted that plans to merge China's urban and rural  health insurance schemes had stalled. A financial article re-published widely on social media site WeChat had also questioned whether the health ministry had the clout to push through necessary reforms of hospital finances to remove the dependence on income from pharmaceuticals. This was a tough task as the reforms face strong opposition from the medical profession, whose income is based on sales on drugs. Some have also questioned the ability of the health ministry to be a reformer "reforming itself"
and say it has shown weakness in co-ordinating reforms.
Spokesman Mao Qunan said the article was just a rumour and there were no plans to return the reforms to the National Reform and development Commission. He said health reforms were progressing steadily and it was expected hat there would be difficulties along the way. He noted that Premier Li Keqiang had put special emphasis on deepening the health reforms and implementing them in public hospitals, and this was now being extended to more than 1000 country level hospitals.
Health economists such as Professor Hu Suanlian of Fudan University, Shanghai have commented that health reforms are difficult to implement and co-ordinate because they involve many departments with different aims and responsibilities - such as finance, social security and health. There is also the problem of different provinces and cities having different health insurance arrangements and different priorities.
[Editor's note: This unusual admission of a rumour - and the concerted effort to quash it suggests  there is real opposition within the health system - and perhaps the political establishment - to China's health reforms. The health ministry spokesman made specific reference to doctors' income and the pharmaceutical procurement system as sensitive areas of the reforms. This suggests that those with financial vested interests in the status quo - the medical profession, hospitals and the pharma industry - may be trying to stall the reforms or turn them to their advantage.]

Doctor's income must not be linked to drug sales or patient quotas, health ministry says

by Michael Woodhead
Doctor's income must not be linked to sales of drugs or other profit-linked activities such as the numbers of tests done or patients seen, the National Health and Family Planning Commission has decreed.
Under the new health reforms for county-level hospitals, any bonus schemes for doctors must be 'scientific' and related to appropriate performance measures such as efficiency and patient satisfaction, the NHFPC has decreed.
It is forbidden for hospitals to set up schemes in which doctors are given quotas or rewards for use of drugs, tests or patients treated, and appraisal must be based on public good and work efficiency.
The rules apply to country-level hospitals, and are an extension of the reforms that were initiated in a trial basis in a 311 hospitals, now extended to more than 1000 hospitals. From now on, county hospitals that serve populations of more than 30,000 people will be graded as second level hospitals.
The new proclamation "Concerning the reform of County Level Hospitals" is made on behalf of the NHFPC in conjunction with the Ministry of Finance, Ministry of Social Security and the State Council.
The aim of the new rules is to break the dependence of hospitals on income from drug sales, the so-called "drug dependence" system. The aim is to establish a new and sustainable model of hospital funding.
The new 'white paper' also contains new guidelines for hospital drug purchasing mechanisms: country level hospitals will now be expected to rely on the provincial level purchasing systems for the drug supplies. Quality will take precedence over price in purchasing, but prices are still expected to be reasonable and fair, based on tendering systems.  Suppliers will be expected to guarantee drug supply and will manage logistics, to cut out the 'middleman' wholesalers role in drug delivery to hospitals.

China has learned the lessons from SARS, praised by WHO for H7N9 reponse

China's response to the H7N9 influenza outbreaks has been praised the World Health Organisation for the sound preparedness, prompt communication and collaboration with international groups. In the latest WHO Bulletin the agency says China has learned the right lessons from the mistakes made with SARS and now has a robust and open system for dealing with infectious disease outbreaks that can be a model for other countries. After SARS, China reformed its systems to improve disease surveillance and make the country’s response to future disease outbreaks both swift and effective, WHO says. The improvements to the system were evident when H7N9 influenza emerged in March 2013. The Chinese surveillance system based on Centres for Disease Control and Prevention allowed the problem to be quickly identified, and there was a good response in terms of follow up testing and identification of new cases. prompt moves were taken to reduce risk by closing poultry markets, and appropriate risk information was disseminated quickly to the public, the report says. It also welcomes the close cooperation between the National Health and Family Planning Commission and WHO in responding to the H7N9 threat. China was praised for being open about the sharing of information about H7N9 to the public and with the wider scientific community, with no barriers to publishing the results of virological and epidemiological investigations in scientific journals "China’s prompt response to the emergence of the A(H7N9) virus as a human pathogen – which spanned multiple governmental departments and ministries at national, provincial and municipal level – was mainly the result of strong leadership in a critical situation." the WHO report concludes.

Chinese leaders affirm commitment to Hangzhou Resolution on ethical organ donation and transplantation

by Michael Woodhead
Chinese health officials and hospital leaders have committed to upholding the new ethical framework for organ donation and transplantation as outlined in the recently signed Hangzhou Resolution.
In a update statement, officials and transplant surgeons affirmed the new five point plan that will outlaw practices such as use of organs from executed prisoners and the 'sale' of organs to foreign buyers.
The new statement also includes a list of 38 Chinese transplant centres that have already confirmed  to have stopped using organs from prisoners, with others "anticipated in the days ahead".
The statement published in Hepatobiliary Pancreatic Diseases International is co-authored by China's leading transplant specialist Professor Huang Jiefu  and international transplant specialists including Dr Francis Delmonico, President of the Transplantation Society.
It notes that the Hangzhou Declaration commits China to adopting  a new organ transplantation system overseen by the National Health and Family Planning Commission (NHFPC) and the Red Cross. The new system will set up a national voluntary organ donation scheme and a new organ procurement and allocation system that is based on clinical needs and which is "open and transparent". China will set up a human organ transplant clinical network based on 169 authorised transplant centres, an organ registry system and an organ donation regulatory system.
"The NHFPC expressed the resolution of the government of China that the dependence upon organs from executed prisoners must be terminated. The government of China has affirmed its commitment to prohibit transplant tourism and to shut down organ trafficking and transplant commercialism," the statement says.
The move to the new organ donation system will also mean that China is no longer the subject of an academic boycott on organ transplantation.
Health minister Li Bin also pledged her commitment "to bring China back to the international community and to promote an academic exchange based upon the five-point NHFPC plan elaborated."
The next step will be to implement the agreement in all China's provinces. The statement says China will also host a meeting this year with leaders of the major international transplantation societies and WHO representatives.
"The meeting will affirm the new resolution in the practice of organ donation and transplantation in China. The meeting will be a milestone for China transplant professionals to practice according to the international standards set by WHO Guiding Principles."
Meanwhile, in a public show of support for the new organ transplant system, senior Chinese leaders have registered to donate their organs.
Officials including Chen Zhu, vice-chairman of the Standing Committee of the National People's Congress and a former minister of health; and Hua Jianmin, head of the Red Cross Society of China added their names to the new online organ registry at the Beijing Union Medical College Hospital .
The registry, overseen by the society's China Organ Donation Administrative Center, is available for people aged 18 and over who are willing to be organ donors after their death.
In December, the State Council issued a guideline related to funeral reform, encouraging Party members and officials to register to donate their organs after their death, according to China Daily.

New organ transplant network launched, transplants for foreigners banned

by Michael Woodhead
China's leading organ transplant specialist Professor Huang Jiefu has launched a new national network of  Organ Procurment Organisations to try clean up the organ transplant system in China.
Professor Huang also launched a new national voluntary organ donation registry, in a bid to move away from the corrupt 'organs for sale' system that has operated in the past.
Under the new system, organs will be assigned according to clinical need rather than according to payment or connections, and there will be severe penalties for doctors and transplant clinics that are found to be flouting the rules.
At an official launch by the National Health and Family Planning Commission in Beijing attended by representatives from WHO and the Red Cross, Professor Huang said that about 160 hospitals had now been approved to carry out organ transplants. In the past about 600 clinics had offered transplants for money, but under the new system any clinic that operates outside the official donor network will lose its license and doctors will be suspended. There is a ban on private organ donations for money and also a ban on procuring and giving organs from Chinese to foreigners.
However, Professor Huang said some provinces had been slow to join the new network and to play an active role in the new organ donor sharing system. He urged them to work more closely with the new system, noting that there were about 30,000 critically ill people in China who urgently needed an organ transplant. He also encouraged Chinese people to sign up for the new national organ donor registry, saying it was possible to amend or withdraw from the scheme at any time.

Tuberculosis in China - the good news and the bad news

by Michael Woodhead
China has succeeded in more than halving its tuberculosis prevalence with a major campaign launched in the 1990s, according to a new report from the Chinese Ministry of Health.
The campaign produced dramatic reductions in tuberculosis because it shifted treatment out of hospitals and into the community via public health centre TB dispensaries, according to an article published in The Lancet this week.
The report assesses the impact of China's tuberculosis control program based on the directly observed treatment, short-course [DOTS] strategy which was scaled up to cover half the population during the 1990s, and to the entire population after 2000.
Between 1990 and 2009 the prevalence of tuberculosis fell from 170 cases to 59 cases per 100 000 population. The decreases were attributable to the program because declines were only seen in areas where it was operating in the 1990s. The reduction in tuberculosis was greater after 2000 than the 90s (57% vs 19%), with 70% of the total reduction in tuberculosis seen in the last decade.
The proportion treated by the public health system using the DOTS strategy increased from 15% of cases in 2000 to 66% of cases in 2010.
The health ministry said China had shown that it was possible to achieve ambitious targets in reducing tuberculosis, which had not been achieved in other developing countries. However, despite this success, China still had an estimated 1 million new tuberculosis cases in 2010.
China now faces the problems of a widening urban-rural gap in tuberculosis prevalence and tuberculosis not being picked up in hospitals. Also, further reductions in tuberculosis prevalence are likely to be less impressive because the DOTS program is more effective in reducing the prevalence of tuberculosis in known cases than in new cases, and the number of known cases is now low.
Therefore other control efforts in addition to the DOTS strategy need to be implemented, the report authors say.
Another problem is that the cost of treating tuberculosis is becoming prohibitively expensive for patients due to hospital profiteering, according to another report released this week. The study by Chinese and international researchers found that many patients are being treated at hospitals with second-line drugs when they should have been treated with first-line drugs in community TB dispensaries. The reason for this seems to be because hospitals want to retain patients to make more profits, the researchers surmised.
The study also found that patients faced crippling costs for treatment despite China's supposedly free TB treatment policy and despite most patients being covered by medical insurance. Insurance coverage for outpatient care generally reimbursed only a small percentage of fees and the free TB treatment policy does not cover costs on auxiliary examinations, drugs and hospitalisation, the report notes.
"A large proportion of patients borrowed money for TB care, and incurred catastrophic expenditure due to TB care," the researchers said.

Dr Zhong Nanshan: what's wrong with China's health system and why we need to get doctors on board to fix it

by Michael Woodhead
Dr Zhong Nanshan is one of China's most well known and respected doctors. A respiratory physician and former head of the Chinese Medical Association, he is the 'hero' of the 2003 SARS infection outbreak, and his frank advice is respected by the government. At this week's meeting of the National People's Congress in Beijing, Dr Zhong gave a speech on the current problems with the Chinese healthcare system and the direction of health reforms.

"Today when I heard Premier Li Keqiang's announcement I was very excited, as his words provided a lot of inspiration on the difficult problems we are facing with medical reform. In recent years China's reforms of health insurance and the healthcare system have attracted worldwide attention. But from the public's point of view, there is still the problem of 'difficult to see a doctor, expensive to see a doctor'. Doctor-patient relations are still tense (as the China Hospital Association has recently made clear, hospital doctors and staff have often been the victims of violent  attacks) and hospital staff are not showing enthusiasm or initiative in their work.

For these three criteria, when it comes to health reforms there has been no breakthrough in the last five years, and in fact things have become worse in some areas. Where does the blame lie? The answer is in our major (tertiary level) hospitals.  In these institutions, doctors have not become heavily involved in medical reforms, and this problem is becoming more serious. Look at land reform: this was about the relationship between farmers and landlords, and it was based on respecting the position of the farmer, allowing them to make a living. Likewise with education reform - this was about teacher-student relations and when teachers and schools got better pay, resources and conditions, teachers got more respect.

Why are doctors not enthusiastic for health reform?

Similarly, medical reform will depend on the involvement of doctors. America's medical reforms were about respecting medical opinion and allowing the doctor's clinical judgement to drive the direction of the medical system. I remember in 2012 when Li Keqiang was deputy premier and I saw him at a meeting, and I told him that the most important point I wanted to make was that doctors must be the driving force behind medical reform. However, five years have gone by and it seems that under the present reform system medical staff can see no way in which they can change things for the better. On the contrary it seems that many of the reform programs have an adverse affect on the working conditions for doctors. For doctors it is as if society 'discriminates against them'. And under such conditions, where is the enthusiasm for medical reform going to come from?

As any changes are going to affect doctors' interests, let us first analyse the current situation in regard to doctors' incomes. It is a widely held belief among the public and some government departments that doctors' earn a large amount of extra and unjustified income through what we could call unofficial 'grey channels', and this is seen as outrageous, unethical behaviour. Therefore, before the conference I examined the accounts of the Guangzhou tertiary hospitals. These showed that in 2012 the average official annual salary of a doctor was 41,077 yuan, but the actual annual income for a doctor with all allowances, bonuses and subsidies was 176,320 yuan. For 2013, the average official salary for a doctor was 46023 yuan, but their actual annnual income was more than 190,000 yuan.

Of course this level of income is high compared to the average worker or government official, but it is low compared to the incomes of doctors in other countries. It may therefore be said that this level of income for doctors is reasonable, especially when this extra income comes from government policies as they are applied in hospitals. Here is a typical example of how state-owned enterprises operate to improve performance: hospitals want to increase their income so they increase the number of beds to accept more patients and they increase the number of procedures and tests. On my ward rounds I see many patients who are having unnecessary tests and procedures. One of the main reasons for this is that doctor's income is linked to irrational medical practices - this is a major contradiction within our health system.

Reward doctors for their skills, not for how much they prescribe

My second major point is that a doctor's economic labour value is not reflected in medical fees in China, which are far too low. A doctor's economic value should be related to their ability to diagnose and treat and their ability to give individual attention to a patient based on their skill and knowledge. Unfortunately, in China this is not the case. In the rest of the world a doctor's income depends on their clinical skills, whereas in China a doctor's income is linked to how many drugs they prescribe and how many tests and treatments they order. It is not surprising then, that in China doctors' credibility is called into question. But rather than blame this on a doctor's ethical flaws, we should recognise that this is due to hospital policies that prioritise income and profit and skew the doctor's working patterns.

Too many patients, not enough time

My third point is related to the tense situation in doctor-patient relations. I believe this is 80% due to the difficulty that patients have in accessing a doctor. Owing to the way hospitals operate, doctors are given quotas of numbers of patients to be seen each day. If they do not meet the targets for numbers of patients treated, they miss out on their financial bonus. In other words, the more patients they see, the better. Thinks about this: in half a day a single doctor must see fifty or sixty patients. What does this say about patient access to a doctor and the doctor's 'space' to practice good medicine? The reality for patients is "wait for three hours to see a doctor for three minutes". That just isn't enough time for a proper consultation, and as the consultation time shrinks, the strained relations between doctors and patients increase.

These days in a bid to exploit 'resources' to the full, hospitals are always seeking to increase their bed numbers and they open 'branch hospitals' to increase capacity. While in theory this increases the opportunities for the population to get treatment, the reality is that this increases the hospital income. And the other aspect is that doctors are 'running to exhaustion' trying to treat ever higher numbers of patients. This is not a sustainable model for providing for a community's medical needs.

So we have doctors who see that the government health system cannot provide them with a basic income in proportion to their work and skills. They thus see no benefit from medical reforms so far: they have a negative view, show little enthusiasm and no initiative towards medical reforms. Therefore, as the public should be the target for healthcare reforms, I could set the theme of my speech today as: "Discard doctors as driver of health reform: don't let the medics change the medical reform."

Principles: the need to put more value on health

The way to solve these problems is to change our principles. Today I especially appreciated hearing Premier Li Keqiang's remarks that: "For existing problems the government should look within itself for the causes." I think for health reform we need to look within the health system for the causes of the problems.

Firstly, within both government and society we need to develop a respect for life, to treasure life and health. And if we are to attach importance to preserving life and health we must invest in the health system. From 2005 to 2012 our country made great efforts in health and increased funding for health from 3% to 5% of GDP. However, this is still a lower level of health funding compared to developed countries - in fact we spend less on health by GDP than Afghanistan does. Developed countries spend between 8% to 15% of GDP on health, and we need to aim for that.

But we can't just think of health in economic terms. Health reform must start by putting health and life as a first priority for society. At present in Chinese hospitals the economic value of the healthcare staff is very low compared to other countries. The incomes  of public hospital medical staff are very low and should be higher. Other countries have managed to create good public hospitals systems, why can't we?

Use public insurance funds to improve health services

Of course China has a huge population, and we can't expect our public hospitals to immediately become public welfare providers for everyone. We have to look to the health insurance system for the potential to do that. Since 2011, the national health insurance scheme has been meant to guarantee access to medical treatment and medicines. However the system is fractured and un-coordinated, and those benefits have not been realised. Since 2009, the rural medical insurance scheme has shown good results but these have not been seen with urban insurance schemes, which still have major problems.

Health departments lack the management skills to oversee these schemes, and although the public have paid a lot into these public insurance schemes, the benefits have not been taken out. We should look to these accumulated health funds as resources to fund health reforms. We need to focus on the supply side, not just on patient input and demand. If doctors show good performance they should be rewarded for providing more services. Hospitals should be able to use this insurance funding as a lever to deliver more and better services - but currently the health insurance funds are out of their control and managed by the social welfare department.

The social welfare department does not accept responsibility for health reform and this is a major obstacle to reform of public hospitals and the way that funding is raised, dispersed and linked to performance of the public hospital system. In 2010 there was something like a 7 billion yuan surplus in health insurance contributions - why is this surplus not being used to boost the public hospital provision of services? The health department does not have funding for hospitals - this system needs to be changed - as in 70% of foreign countries where health departments manage public hospitals.

Hospitals should be centres of excellence

Finally we need to improve the education and culture of healthcare staff. We need to have a system based on merit. In most countries, large hospitals are centres for medical expertise and do not deal so much with common, everyday problems. These are dealt with by family doctors or community clinics. Last year the government's health working group made the creation of community clinics and hospitals a priority. I strongly approve of this. Through investment the government should improve the skills and the remuneration and conditions for community clinics and local hospitals. I think the technical and management skills of small hospitals and clinics should be nurtured and overseen by tertiary hospitals, which take responsibility for community clinics. In this way the standard of local clinics could be increased to allow them to cover the same scope of basic care as tertiary hospitals within 3-5 years.

In summary, across the world, the medical profession is regarded with respect in most countries, but China is the exception. The economic value of medical personnel has been degraded, and until this is restored they will not be at the front of driving health reform. The medical staff of Guangzhou University Hospital have great underlying enthusiasm for health reform - it just needs to be shown that reforms will bring them benefits and respect, for them to be positive and actively support them, I believe. I think that in this respect Guangdong doctors will be at the forefront of reforms. We will work together to fulfill what Li Keqiang described as "a solution with Chinese characteristics to the difficult problem of health reform."

Editor's note: This is my translation of Dr Zhong Nanshan's speech that was made at the NPC meeting in Beijing on 5th March, 2014 and published in the People's Daily. It is not a perfect translation, but I have covered the main points as best I can. If you see any errors I will be happy to correct them. The original can be seen in Chinese here.

Why Beijing's plans to privatise medical services get a lukewam reaction from China's doctors

by Michael Woodhead
Beijing is one of several cities that has recently announced plans to encourage doctors working in public hospitals to set up private clinics. The government used the socialism-friendly euphemism "social capital" for the private capital investment it wishes to attract for establishing new medical facilities. 
However, the plans come with a few strings attached, which will deter most doctors from even thinking about setting up private clinics. Firstly, the city also announced that Beijing already has enough medical clinics in the central area, and it will only permit new clinics to be set up outside the fifth ring road. It also stipulated that only experienced doctors who hold the grade equivalent to 'associate professor' would be able to set up the new private clinics.
The reaction from doctors has been underwhelming and many have questioned how such a monumental change in the current system will be implemented. In theory, the new proposals will "free up" doctors to better serve patients in more flexible ways. Doctors however, have described these predictions as wishful thinking.
Firstly, the number of senior doctors who qualify to set up new clinics is only a small proportion of the total number of working doctors. These senior doctors are in short supply and they are the backbone of the current public hospital and medical school teaching system. How will the system cope if these doctors leave to devote their time to private clinics?
Doctors say that if a new layer of private clinics is to be established, there needs to be a plan for how patients will be managed in public hospitals. If the privatisation plan is to succeed there will need to be a move away from large hospitals treating minor illness, and these functions being taken over by local clinics. Big hospitals will have to become specialist centres with expertise in treating serious diseases, they say.
In places such as Hong Kong and the US, there is a long tradition of doctors working in private clinics as well as in public hospitals. How will China manage this balance? In the US, for example, patients can only get their medical fees reimbursed if they go to a  doctor approved by the insurer or government, and the doctor and clinic must have acceptable quality and safety standards - how will China manage such a system? In addition there needs to be safeguards that private clinics will operate in an ethical manner. In western countries there are a range of professional associations and health department systems to define and oversee standards. With new private clinics in China there is also a danger that they will inherit the 'prescribing for profit' and overservicing practices of some existing hospitals in an effort to increase revenue, doctors warn
In reality, there is also a big difference between the government 'permitting' and 'encouraging' doctors to set up private undertakings. As anyone in China knows, running a private enterprise can involve a lot of 'mafan' (trouble) - and that 'mafan' can also mean paying out a lot of money. How many experienced doctors will be prepared to take on this risk?
These are just a few of the doubts that doctors have expressed about the new proposals for private clinics in China. They say "jumping into the sea" of private enterprise is a huge step for a doctor to take - there are so may unanswered questions and risks that it will need more than just "permission' from the government to make them do it.