Bigger than Ben Hur: relaxation of hukou system will provide healthcare for China's 270 million floating population

BY MICHAEL WOODHEAD
If the relaxation of hukou (residence permit) regulations announced by the State Council is actually enacted in practice, this will have a profound effect on healthcare access for a quarter of a billion Chinese.

This week the State Council announced that local governments were being instructed to adopt new regulations that will allow nonresidents to get a household registration. This registration will give the floating rural migrants access to basic public services such as education and healthcare, and family planning services. The changes could potentially affect 270 million internal migrants who have moved from rural areas or regional small towns to the larger and more prosperous cities of China. Until now this floating population has been denied access to healthcare facilities in the cities, leading to the development of many unofficial backstreet clinics. The main problem for migrant workers was that their hukou only entitled them to healthcare in their place of residence registration. This also applied to their children.

However, it pays to read the fine print - this does not mean that city hospitals will be immediately swamped by rural migrants seeking healthcare. The new regulations say that city governments should extend 'basic' services only to nonresidents who qualify for residence via a points test based on factors such as length of residence (as much as seven years) and stable employment. Many rural migrants will only qualify for temporary residence cards in the cities, which may limit their access to healthcare.

According to Xinhua, the State Council made the changes because "if these issues can not be effectively addressed in the long-term, it will trigger a series of social risks and contradictions."

However, some media commentators have been asking whether the legislation is premature because local governments are neither willing nor able to provide additional healthcare services to 'outsiders'

The other questions being asked in the Chinese media are: what are the criteria that will allow a nonresident to acquire city registration? Also, what level of services will the be eligible for? Another important question being posed by analysts is what kind of effect the widening of hukou system will have on current city residents? Will they be crowded out of hospitals and healthcare service by the onrush of outsiders?

One expert from the Renmin University, Beijing, also pointed to a potential problem with the loosening of the hukou system: the degrading of the funding base for rural health services. Professor Yang Junhua said many rural areas had already seen huge migration from the their towns and villages, depleting their tax revenue base, meaning they were unable to support services for the 'left behind' residents who tended to be either older and retired or young children. Allowing rural residents to switch their hukou to cities would further undermine the viability of rural healthcare services, he warned.

Professor Yang also predicted that there would be resistance on the ground from city governments to implementing the new regulations, and thus the central government would have to be strict in monitoring and enforcing the rollout of any hukou reforms.

Nevertheless, if fully implemented the new residency regulations are a 'game changing' step for China and have major implications for healthcare. The 'floating population' have long been neglected in terms of healthcare and many of the rural migrants in cities have poor healthcare as a result: unable to access health services they have missed out on basic services such as vaccination, leading to outbreaks of infections such as measles. The new residency rules could have more of an impact on China's healthcare system than the recent more widely publicised two child policy.

My weekly medical news blog for 7th February

There have been few takers for GP training places in Nanjing. The city's community health centres need to recruit 110 family doctors to fill their positions but have only had 49 applicants. Under new health ministry regulations, all doctors including GPs must have the 5+3 education and training (5 years undergraduate and 3 years postgraduate.) However, despite offering a masters degree and a one month placement with GPs in Taiwan, most medical graduates have given the GP training scheme the cold shoulder. The reason is the low status and poor pay of 'community doctors'. After eight years training, GPs can expect to earn only about 80,000 yuan (US$13,000) a year, which is much lower than hospital-based specialists earn. Also there is no chance of promotion or career progression and GPs are expected to move around many clinics in suburbs and villages. Health educators say the Chinese government needs to put more emphasis and resources into primary care if it is to develop a healthcare gatekeeper system similar to those used successfully in developed countries.

Most of the 'research' published by China's doctors is rubbish and there's a simple reason for this - the publish-for-promotion system. To gain promotion (and often just to stay in the job) all China's doctors have to meet a certain quota of  papers published in medical journals. The problem is that most of China's doctors are way too busy treating patients to be doing research and writing up papers. Many are simply not interested. The result is a thriving industry in academic fakery and plagiarism. It is common knowledge that doctors hire 'publishing agents' and ghostwriters to source the articles that will be published under their name. Ironically, many of the articles are written by medical students, and so there is an inverted system whereby the most knowledgeable and experienced clinicians are publishing articles written by the least knowledgeable. The going rate is about 3000-4000 yuan for a good paper - payment on publication, of course. Experts say the system has become a wasteful farce, and they are calling for reform of the one-size-fits-all quote system, to divide doctors into three categories: 'craftsmen' (no research, just treating patients), physicians (some research) and medical scientists (more  research, fewer patients).

The government says it expects to see a dramatic increase in uptake of private medical insurance before 2020, with new policies encouraging Chinese citizens to take out private cover. Ma Xiaowei, deputy head of the health ministry, the National Health and Family Planning Committee, told a news conference this week that the central and provincial government would "encourage the development of various types of commercial insurance to increase people's ability to deal with risks posed by major diseases." He said private cover was needed to help fund demand for health services, with the number of people over 60 already exceeding 200 million. However Mr Ma didn't explain how people will be enticed to take out private health insurance given that there are currently virtually no private doctors or hospitals and very few services or benefits from having insurance.

Underpaid, overworked and under fire: that's the life of an emergency medicine specialist in Guizhou province, according to a Sina article this week. In China, emergency doctors accompany ambulances and are often first on the scene of trouble, even before police. One doctor said he often had to jump in and stop bleeding in stabbing victims while people were still fighting around him. Another said emergcny doctors were often faced with physical challenges such as getting critically ill patients down stairs of apartment blocks with no lifts. Emergency doctors said they worked 24 hour shifts then had a day off during which they mostly slept, and there was no time for leisure, holidays or study. The stress of daily life as an emergency doctor meant there were high rates of burnout - and doctors were considered grizzled veterans if they lasted three years, they said.

In clinical news, new research shows that older Chinese are consuming more calories - and eating more unhealthy food - than their counterparts of the previous generation. A study from nine provinces found that the average daily energy intake had increased among older Chinese adults from 1379 total kilocalories in 1991 to 1463 kilocalories in 2009. The increases had come from greater consumption of high fat and high carbohydrate foods such as plant oil, wheat buns, and wheat noodles.

Chinese are also consuming more polluted air and it is killing them as much as smoking. A study carried out by the School of Public Health in Peking University found that there were
257,000 premature deaths related to PM2.5 pollution in 31 major Chinese cities. This made air pollution a major killer equivalent to smoking. Conditions such as lung cancer and stroke triggered by air pollution killed about 18,000 people in Beijing alone in 2013, the researchers said.

And finally, a study from Shanghai as shown that the number of cervical cancer diagnoses in the city has increased six fold in the last decade. Data from 13,518 women with gynaecological cancers  from 2003 to 2013 showed that the number of women with diagnosed gynaecological cancers increased by almost sixfold with the increase largely due to the increase of women with newly diagnosed cervical cancer. The study also showed that the age of diagnosis of cervical cancer had increased.

Beijing introduces private health insurance for primary care

by Michael Woodhead
Beijing has introduced a pilot scheme of private health insurance to cover primary care services such as child health checks, maternal and perinatal care, postoperative rehabilitation and elderly care.
The service, which will be available through 23 community health centres allows those with insurance cover to tailor the type and level of services to suit their family needs.
The program is being offered online through the "Beijing General Practitioner and Family Care Reform Portal" website. The project has been set up jointly by the Beijing Medical Association and  China Life insurance
According to the BMA's Dr Wu Yonghao, Beijing residents will be able to purchase "Community Care Insurance" that will entitle them to various services provided by family doctors.
The service will also be offered as an add-on for patients who have insurance cover for procedures such as surgery, cardiac interventional procedures, orthopedic surgery and childbirth. General practitioners will provide the community care, including assessment, counselling, referrals and follow-up.
Insurance will also allow consumers to gain access to health checks, fast track referrals and personalised care.
The first of the "Family e-sites" is expected to go live in October and cover six districts of the city. By 2016 it is expected that 23 community health centres will cover all districts  of Beijing. Dr Wu said all community GPs will be qualified practitioners with at least five years experience as a specialist in the public system.
The program combines two of the National Health and Family Planning  Committee's health reform priorities: a move to private health provision and the development of primary care and community care services.

The top 8 medical news stories from China for Thursday 1 May

1. A person's blood group may influence their survival from cancer according to oncologists in Guangzhou. In a study of patients with oesophageal cancer they found five year survival rates were 50 % for patients with blood type A, 45% for type B, 51% for type O, and 61% for type AB.

2. The incidence rate of type 1 diabetes is increasing at a rate of 14.2 % per year in Shanghai and if present trends continue, the number of new type 1 diabetes cases will double from 2016 to 2020, researchers say.

3. Chinese neurologists say people with atrial fibrillation may be able to avoid the need to take lifelong anticoagulant drugs to prevent stroke by using a minimally invasive surgery procedure called left atrial appendage closure (using a system created by Boston Scientific Corp - could be an advertorial).

4. The introduction of the New Cooperative Medical Scheme (NCMS) has increased access to healthcare for elderly people, but not had any effect on their overall health, a study from Nanjing University shows. The study found that the health cover did not affect overall health status and did not reduce the out-of-pocket spending of elderly people.

5. An outbreak of hand, foot, and mouth disease that hospitalised 1844 children in Central China from 2011 to 2012 was caused by a mixture of co-circulating coxsackievirus A16 (CVA16). and enterovirus I71 (EV71). This may have contributed to the genomic recombination between the pathogens say researchers from Wuhan University.

6. The whistleblower 'Corridor Doctor' doctor of Mianyang who worked in a corridor after being suspended from her job for two years, has now been sacked. Authorities said Dr Lan Yuefeng had been absent for almost two years and had been disruptive and uncooperative. Her colleagues rejected charges of overservicing at the hospital and went on strike claiming she had made false allegations and damaged their reputation.

7. Health authorities in Beijing are urging adults to have measles vaccination after a surge in cases in thecity. They say there has been a spike in cases in the past two months, and more than half of the infected are in adults, probably because protection from childhood vaccination has waned.

8. Radiologists in Sichuan claim that resting-state functional MRI could be useful in providing early and accurate diagnosis of ADHD. In a study published in Radiology, Dr Qiyong Gong of the West China Hospital of Sichuan University, showed that the boys with ADHD had altered structure and function in certain areas of the brain, such as the orbitofrontal cortex and the globus pallidus. that play in executive inhibitory control - the ability to control inappropriate behaviors or responses.

The New Rural Cooperative Medical Scheme has failed: families are still impoverished due to ill health

by Michael Woodhead
Despite covering 90% of rural residents, the New Rural Cooperative Medical Scheme is failing to prevent rural families from becoming impoverished due to expensive medical bills.
A new study shows that 14% of rural families have experienced financial ruin due to catastrophic health expenditure, and one in three people have been unable to afford to go see a doctor when sick.
A review of the NRCMS, which was introduced in 2002, found that it only covered a small proportion of a family's medical bills because the insurance fund did not have enough money. Families typically pay 200 yuan a year to become eligible for the NRCMS, but when sick they face thousands of yuan in bills for treatments that are not covered by the scheme, and face high out of pocket expenses.
Dr Li Ye and colleagues from the Department of Social Medicine, Harbin Medical University found that households in rural areas faced a high risk of medical impoverishment, even if they were relatively affluent. The NRCMS only covered 30-40% of medical expenses, and therefore families faced high levels of out-of-pocket costs when a family member became ill. The study found that 28-30% of families did not seek hospital treatment but self treated when they were sick, because of the cost.
The researchers said the NRCMS had failed in its primary function of preventing catastrophic medical expenses because of the limited scope and low level of its reimbursements
They said that unlike urban health insurance schemes, the  pool of insurance funds in the rural scheme was managed  at a local country level and was insufficient to cover even the most basic medical expenses of someone with a serious or chronic illness. Another problem with the scheme was the lack of cost control mechanisms in the fee-for-service medical system, which meant that hospitals and clinics could take advantage of the system and encourage overprescribing and overtreatment to gain money from the insurance scheme.
"In order to offer a better benefit package for NRCMS contributory members, the financing level of the NRCMS needs to be increased. The NRCMS benefit package should align policies across the whole spectrum of health care services, including primary care, hospital care and long-term aged care. The integrated policies are also important for preventing cost shifting games.
Meanwhile, stronger attentions on provider-side measures need to be paid to control cost of health care," they concluded.
The findings are published in the journal PLOS One.

How much does the average Chinese doctor earn?

by Michael Woodhead
Much of the recent highly-publicised violence against doctors by patients has been triggered by resentment and mistrust of the medical profession, especially in relation to their earnings. 
In theory, doctors have only a modest salary, but everyone in China knows that many doctors make a lot of money through the so-called 'grey channels'. This week the People's Daily mounted an investigation to discover the true earnings of a typical doctor and the sources of their income.

After speaking to doctors off the record and also to other people working at senior levels in hospital management and in industry, it soon became clear that doctors have many additional and unofficial (but often legal) sources of income. The phrase "drug-dependent doctors" describes the reliance of doctors on prescribing for their income. Another well know rhyming phrase in hospitals is 'physicians rely on commissions, surgeons rely on operations' (it sounds better in Chinese - 'Neike kao huikou, waike kao shoushu').
A typical doctor at a large tertiary level hospital in Beijing will officially earn about 46,000 yuan (US$7500) a year. In reality, doctors earn more than three times that - about 180,000 yuan ($29,000) a year. The additional income comes from four areas:

1. Bonuses  - from hospital, for meeting patient number and performance quotas
2. Commissions for prescribing drugs and ordering tests
3. Red envelopes - from patients to get preferential treatment
4. Moonlighting - doing 'outside clinics' at weekends - often in regional cities and towns

One orthopaedic surgeon said that without the 10,000 yuan ($1600) monthly bonus from his hospital, most doctors in his department would leave. The basic monthly income of a doctor is only about 2-3000 yuan ($320-480), and no-one would work for that. The surgeon said all doctors depend on their monthly bonus for much of their income, and also the annual bonus, which can be several thousand yuan. The real income for a hospital specialist is about 180,000 yuan ($29,000) a year, and for a head of a department as much as 250-300,000 yuan ($40,000-48,000) a year. The income varies between departments and specialities. Some areas such as orthopaedics, surgery and cardiology are the highest paying. Others, such as paediatrics, have a lower income because doctors in these specialities prescribe fewer drugs and use fewer tests. A doctor in a  regional hospital would also earn less - maybe only 10,000 yuan ($1600) a month.

Doctors also get commissions from the sales of drugs. It is well known that hospitals rely on commissions on drug sales, which make up 50-60% of their income. Doctors also individually benefit from drug sales, says a drug company representative. Whether they agree or not, doctor's income is related to how many drugs they prescribe. Companies reckon that 10-30% of drug sales income goes to doctor.s for choosing them and prescribing them. Surgeons do not prescribe as many drugs but they make money from 'red envelopes' in prioritising patients. Surgeons along with anaesthetists and theatre nurses also make commissions on the use of disposable medical items and the use of medical devices and tests.

Another overlooked source of doctors' income is moonlighting. At weekends, Beijing Airport is said to be a social meeting place for the medical profession as doctors fly off to do their 'outside clinics' in other parts of the country. For the top specialists in any field this is a lucrative source of additional income and they can make tens of thousands of yuan from just a single session - and millions of yuan a year. However the junior and low level doctors make much less than the top specialists. A doctor at a community clinic, for example, would get only 4-5000 yuan ($640-800) as a basic salary and would not get much income from prescribing or surgical work.

These kinds of grey income are a contradiction in the health system and are the underlying reason for doctor-patient tensions - it is all to easy for misunderstandings to occur and to flare up into trouble - like 'a minor incident sparking a war' as the Chinese saying goes.

One of the fundamental underlying problems is that the doctor's time is undervalued. Take a knee replacement operation, for example. Such an operation will require two surgeons, two theatre nurses and two anaesthetist and last at least an hour - possibly three hours of their time. And yet the 'doctor's fee' for the operation is only a few hundred yuan - where is all the money to come for the doctor's expertise - let alone for the equipment, drugs, gas and blood and dressings?  There are doctors with a conscience who will add a reasonable and standard markup for their time - and yet there are other 'business minded' doctors who add a lot more. And there are some doctors who use foreign disposable equipment which might cost 200 yuan ($32) to buy, but is billed to the patient at several times that amount.

"There are some bold doctors who when it comes to prescribing always choose the most expensive, not the most appropriate drugs," says one pharmaceutical  supplier. "And when a new drug comes out they all rush for it in a show of excessive and unnecessary prescribing," he says. It is the same with tests - patients are told they must have numerous complex and expensive tests that they don't need, because the doctor gets a commission, he says.

The situation in hospitals also has a rhyming slogan: "Getting to see the a doctor is hard (kanbing nan): registering is hard (guahao nan),  waiting is long (houzhen chang), time with the doctor is brief (kanbing duan), doctor's fee is expensive (kanbing gui), tests are many (jiancha duo), prescriptions are many (chufang duo) and drug costs high (yaofei duo). All in all it is a volcano waiting to explode - no wonder 70% of doctors have experienced violent disputes with patients.

It is hoped that the Chinese government's new health reforms - including those on drug pricing and supply arrangements, will help straighten out this situation. What is also needed to 'restore the honour of the doctor's white coat'? According to leading physician Dr Huang Jiefu, the answer is a turn to the free market. By giving doctors the freedom to practice where and as they wish - as set out in new government policy -  doctors will be able to set a true market value for their services. When they do this they will no longer need to rely on unethical and unfair 'grey market' channels to maintain their income.  The People's Daily ends by saying that new health insurance schemes should allow patients to afford private doctors by encouraging the public to pay in premiums and have a policy that they can use when they need it most.

Medical news - seven China links

1. With more than 10,000 new cases of HIV a year, Yunnan is to fund more NGO anti-HIV programs and improve healthcare for people with the infection.

2. New regulations on genome sequencing are to stop clinics ripping off consumers by offering the sequencing as part of routine health checks or to help predict children’s potential abilities, officials say.

3. Malnutrition is still a major problem in some parts of rural China, with one in every five children under the age of five years in poor areas needing better nutrition. Local governments have been set a benchmark of 29 kg per capita meat consumption standard to benefit children in underdeveloped region.

4. Pilot schemes have been set up in 27 provinces to allow rural migrants to claim medical insurance benefits away from their home town.

5. About 13 million deaths from smoking-related illness could be avoided if China adopted WHO recommendations on tobacco control, a paper in the BMJ says.

6. Adverse effects from drugs - and especially antibiotics - are a major health burden for hospitals in China and also cost thousands a of yuan a year for hospitals and patients alike in extra care costs, a study has suggested.

7. Only 9% of boys and 2% of girls in China get the minimum amount of physical activity per week to maintain health, a study carried out in 11 cities has found.

Will China go bust with new major illness medical insurance scheme?

By Michael Woodhead

In a major feature in today's Beijing News, health economists warn that China faces many problems in widening its medical insurance schemes to cover serious and catastrophic illness. These schemes will cover major illnesses such as cancer where the large medical expenses can often result in families falling into penury. Serious disease medical insurance schemes are currently being pilot tested in 27 provinces and 130 cities, but experts say the existing schemes are very varied in their operation, have mixed results and are often poorly managed, with little commitment from local authorities. The Chinese State Council has recently recommended that implementation be speeded up and has ordered all provinces to have serious illness medical insurance pilot programs up and running by June.
At present, almost 290 million Chinese people are theoretically covered by such catastrophic illness schemes that have funds of more than 600 million yuan. Under existing medical insurance programs the reimbursements for serious illness are meagre and not enough to cover even the most basic costs of treatment. The average reimbursement for urban residents is 258 yuan and for rural residents it is 148 yuan. Health economists say there is a danger that if not managed effectively, a more extensive insurance scheme could simply be like "throwing a cup of water on a blazing woodcart". They point to the widespread 'leakage' in the current medical insurance schemes, in which little of the government funding actually gets to benefit the patient. When the government introduced widespread basic health insurance a few years ago the funding was absorbed by hospitals and practitioners who inflated their fees and carried out unnecessary treatments that would attract reimbursements from the government funds.
Therefore experts say that any new scheme must come with strict supervision and conditions to ensure that providers and insurers do not abuse the scheme. Otherwise there is a danger that any such national scheme would become a bottomless pit into which money was poured but with little benefit.
They say current pilot schemes have proved disappointing, with many of them being incomplete and incompatible with other schemes in neighbouring areas. Many still offer inadequate reimbursement to patients with serious illness and many are underfunded to provide sufficient benefits.
There also needs to be provision for rare and expensive to treat illnesses such as Gaucher's Disease, they warn. Without this, patients and their families will still face ruinous expenses when someone becomes ill.

China's rural health insurance scheme has failed: costs of treatment have gone up instead of down

by Michael Woodhead
China’s New Co-operative Medical Scheme has done the opposite of what it was intended to do: it has increased costs and reduced access to health services for rural people, a study has found.
The government-subsidised health insurance program for rural residents was introduced in 2003 and was designed to reduce out-of-pocket payments for hospital treatment for rural Chinese. The scheme had been intended to make healthcare more affordable following the demise of co-operative health schemes in the 1980s that left most rural Chinese without any subsidised healthcare.
The NCMS proved to be very popular and with subscriptions costing as little as 10RMB a month it soon covered 97% of rural residents - or about 830 million people.
However, a new analysis of the scheme shows that out-of-pocket costs for treatment have actually increased under the program. It seems that rural hospitals have been using the easier availability of funds from the scheme to raise their prices for services and have not been passing savings on to patients.
An analysis by Chinese health economists working at the LSE in London has found that the average cost of outpatient treatment went up from 205 RMB in 2004 to 308 RMB in 2009.  After re-imbursement, patients ended up paying 254 RMB for treatment in 2009 under the new NCMS scheme - almost 50 RMB more than they did without insurance.
The authors of the study say the availability of funds through patients’ NCMS insurance may have caused 'cost inflation' by inducing rural hospitals and doctors to use more expensive drugs and treatments, so as to make more profits for their cash-strapped instiutions.
"Much of the government support intended to subsidise participants’ payments for health care may instead have been absorbed by the insatiable quest for revenues and cost coverage at these smaller health facilities, simply to survive," they write.
Therefore it is not surprising that "the rapid expansion of NCMS through massive injection of government subsidies has so far had limited impacts on either improving access or reducing out-of-pocket payments for outpatient care," they note.
"In fact, our analysis indicates that rural residents covered by NCMS are less likely to seek outpatient care than uninsured residents who did not subscribe to the programme. There is no evidence from our analysis that NCMS has succeeded in reducing out-of-pocket payments for outpatient care," they conclude.
Writing in the journal Health Policy and Planning, the researchers warn that: "further infusions of government subsidies aimed at covering rising NCMS expenditures may simply induce further waves of cost escalation unless NCMS can use its leverage as purchaser and third-party payer to introduce cost-saving measures in participating health services facilities."

China medical news for Saturday 1 February

Light news day today as most Chinese are no doubt at home enjoying (or enduring) the New Year with family...

Ambulances must not refuse penniless patients
The Global Times reports that ambulance and first-aid teams will be forced to treat patients regardless of whether they can pay. A new regulation on management of emergency medical services was adopted by the National Health and Family Planning Commission which bans emergency services from refusing or delaying treatment because the patients cannot pay. The new rules also prohibit ambulances being used for purposes other than offering emergency medical service.

Indemnity insurance to be mandatory
The Chinese government is also said to be planning a move to make medical indemnity insurance compulsory for all doctors. The head of the China Insurance Regulatory Commission, said one goal this year would be to promote compulsory medical liability insurance, with medical institutions and doctors required to purchase such cover. This would ensure that victims of medical malpractice can be assured of compensation, thus stamping out violence in medical establishments.

Say no to cigs
Health groups in China have urged people not to give cigarettes as gifts this New Year and to refuse them if offered. Groups including the Chinese Center for Disease Control and Prevention and the Chinese Medical Association made the plea just prior to the arrival of the Year of the Horse, according to CRI.

H7N9 explained
In the New Scientist Debra McKenzie explains the background to the H7N9 avian influenza virus outbreaks at a molecular as well as epidemiological level. She also provides some ideas of what the solution to possible pandemics might be.

Chinese government acts to improve 'second rate' rural medical insurance plan

Early in November, Chen Ping arrived in Beijing on what was likely to be her last trip to the capital.
The 52-year-old stayed just two days - long enough for her to say a heartfelt farewell to the doctors and nurses in the oncology department of the Chinese PLA General Hospital who have been treating her breast cancer for eight years.
Chen, who comes from a small village in Jilin province, wanted to express her gratitude to the medical staff for helping to extend her life.
She told the staff she was grateful to have lived long enough to see her sons grow up. However, as her illness is now in the terminal stages she has decided to stop receiving treatment.
One man Chen particularly wanted to see was out of town, so she was unable to say a last goodbye to Liu Duanqi, former director of the hospital's oncology department, who supervised her treatment.
Liu, looking tired after a working trip to Gansu province, said of Chen: "She's a peasant woman with a rural hukou (household registration). That means the only public medical insurance available to her is the New Rural Cooperative Medical Scheme."
The hukou system effectively ties a person to their place of birth and registration. It usually means that they are ineligible to claim social benefits or medical insurance if they receive treatment outside the place where they are registered.

China medical news roundup for Friday 15 November

 

Village doctors empowered with cloud computing

Doctors serving China’s 900 million people living in rural areas are being helped with cloud computing. In a pilot study, researchers from Taiwan equipped village doctors with Health Information Technology and developing an electronic health record (EHR) system.

The EHR system based on a Cloud-computing architecture was developed and deployed in Xilingol county of Inner Mongolia using various computing resources (hardware and software) to deliver services over the health network using internet when available. From 2008 to 2011 health records were created for 26% (291,087) of 1,108,951 Xilingol residents. There were 10,240 cases of hypertension and 1,152 cases of diabetes diagnosed and registered. Furthermore, 2,945 hypertensive and 305 diabetic patients enrolled in follow-up. Implementing the EHR system revealed a high rate of cholecystectomies leading to investigations and findings of drinking water contaminated with metals. Measures were taken to inform the population and clean drinking water was supplied.

The researchers concluded: “The Cloud-based EHR approach improved the care provision for village doctor in rural China and increased the efficiency of the healthcare system to monitor the health status of the population and to manage preventive care efforts. It also helped discover contaminated water in one of the project areas revealing further benefits if the system is expanded and improved.”

 Full study: Computer Methods and Programs in Biomedicine

Unifying medical insurance is a gradual process: expert

China is attempting to put its three medical insurance systems under one administration, but a healthcare researcher has warned that obstacles still remain, and an effective solution is to merge two of them initially.

The move can only be done step by step, and the first step is to unify the management of the urban resident basic medical insurance and the new rural cooperative medical scheme, Ying Yazhen, of the National Health Development Research Center under the National Health and Family Planning Commission (NHFPC), was quoted as saying in a report carried on Thursday by the China Business News.

Merging the two insurance schemes is feasible as they are similar in terms of fund raising, reimbursement standards and the income of people under their coverage, Ying explained.

She said many places in China, such as parts of the eastern coastal province of Zhejiang and the central province of Anhui, have already merged the two insurances and realized a free capital flow between the two.

Considering its huge population and imbalanced economic development, China implements three separate medical insurances -- the urban workers basic medical insurance for urban employees, the new rural cooperative medical scheme for the rural population, and the urban resident basic medical insurance for people who are not included in the first two insurances, mainly the underage and unemployed residents in cities.

However, the two insurances set for urban residents are managed by the country's Ministry of Human Resources and Social Security, while the scheme for rural people is administrated by the NHFPC. The State Council, or China's cabinet, decided this March to put the three insurances under one administration in order to reduce government redundancy and raise efficiency in medical services. Ying suggested putting all the three insurances under the control of the NHFPC because it is best placed to coordinate the management of the insurances and the medical service fees and quality.

But the researcher insisted that a gradual process is needed for such unified administration.

Compared with the other two systems, the insurance for urban employees is quite different in its participation polices and financing levels, which can be five to seven times higher, Ying told the China Business News.

What's more, its reimbursement percentage for participants, which may reach up to more than 90 percent, is also much higher than the scheme for the rural population and the insurance for unemployed urban residents, according to Ying. The reimbursement percentages of the latter two are often about 55 percent of what patients should pay for medical services.

Ying said there have been rare examples across the country in which the three insurances have been merged for unified management; however, even where this has been attained, administrators have not been able to manage free capital flow among the three insurances.

Source: Global Times

Shanghai to set up China’s first translational medicine centre

The country's first national-level translational medicine center will be established in Shanghai to promote health benefits for individuals and communities.

Translational medicine, also known as translational science, is a discipline within biomedical and public health research. It focuses on translating laboratory findings into diagnostic tools, medicines, procedures, policies and education to improve the health of individuals.

"Translational medicine in China is rapidly growing, though started recently. The establishment of the new center will boost the development of translational medicine in the country," said Zhao Qiang, vice-president of Shanghai Ruijin Hospital.

Covering an area of 60,000 square meters, the research center will have 300 beds for clinical research. And its research will focus on tumors, cardiovascular disease and metabolic diseases among others.

This weekend, the 8th Sino-US Symposium on Medicine in the 21st Century will be held in Shanghai on Nov 16-17, and this year's theme is translational medicine. Medical experts and scholars from both home and abroad will come together to discuss the latest research and the practice's development in the world.

Source: China Daily

Shanghai cracks down on illegal medical practices

At a conference in the Jiading district of the city of Shanghai, on Nov 11, the organizers announced plans to monitor the medical services field in the fight against illegal medical practices.

The related crackdown mainly targets unlicensed practitioners, unnecessary fetal gender tests, and sex-selective abortions.

The district government began its medical monitoring efforts back in 2005 and in the intervening years has developed a governmental management system involving health supervisors and community health service centers. And, things have worked out well, with the discovery of 2,373 illegal activities, with punishment handed out in 742 of the cases, and 54 handed over to the judiciary resulting in 41 people being sentenced.

Source: Jiading District News

Rainbow masks a hit for Hunan surgical staff

Have you ever walked into an operating room fearing the surgeons? Fear not, because rainbow-colored surgical masks and caps designed to ease patients' tension is apparently the latest thing to hit Chinese hospitals.

Allegedly inspired by the hit TV show, Grey's Anatomy, doctors and nurses of Hunan Provincial Maternal and Child care hospital have joined in on the fashion.

With a variety of patterns such as flowers, clouds, animals, Hello Kitty and more, doctors believe the color helps calm the patients and distract them - presumably from the likelihood that they'll lose an ovary during a pelvic operation or get blinded during a nose job. Zing!

Source: Shanghai-ist

Insurance industry will give farmers better medical insurance, says PICC boss

"As urbanization in China accelerates, many problems tend to manifest," according to Wu Yan, chairman of the board of The People's Insurance Company (Group) of China, in his proposal on Chinese People's Political Consultative Conference sessions.
"China faces low urban carrying capacities and a widening rural-urban gap. People in urban and rural regions don't have equal access to basic public services. These problems will hinder China's urbanization process," The Economic Observer reported citing Wu.
The insurance industry has the capacity to assist the government in coordinating rural-urban development and improving security services and social management, Wu said.
In Wu's proposal, he expects the insurance industry to provide farmers with better medical and old-age insurance, public security services and financial support, which are conducive to rural-urban transformation.
The main priority in Wu's proposal is to assist governments in extending rural medical security coverage. Wu called for more joint medical insurance programs applied in Zhanjiang in Guangdong province and Taicang in Guangxi province.
For example, since April 2011, a PICC subsidiary company has been working with the local government of Taicang city in Chinese southeastern Jiangsu province. The government covers the insurance for all citizens registered in the medical insurance system and PICC gives patients back more than half of the amount that goes over 10,000 yuan.
PICC provides insurance for rural and urban patients with the same insurance quota. It signals China's move toward the application of a single nationwide medical security policy, according to Wu.
Source: China Daily

Free emergency medical treatment to be provided for the poor

China will set up funds to subsidize emergency medical fees incurred by the poor and patients whose identities are unclear, the State Council said in a guideline issued Friday.
The move came amid the government's efforts to help patients whose inability to pay medical bills has resulted in hospitals ignoring them or refusing treatment.
The funds will be used to cover emergency medical treatments for acute illnesses or serious injuries among the poor and patients whose identities have not been confirmed, said Sun Zhigang, director of the health reform office of the State Council.
However, it is not yet clear who would qualify for such financial assistance. Sun said specific criteria to determine whether a patient qualifies need to be worked out by governments and medical institutions based on local conditions.
The Ministry of Health will lead efforts to determine which illnesses and injuries can be covered, as well as develop compensation standards, according to the guideline, which did not include a timeline.
Provincial and prefecture-level governments are required to set up such funds, which will be jointly financed by government revenue and public donations, the guideline says.
The funds, described by the State Council as an important guarantee for establishing an emergency assistance system in China, will be operated by provincial and prefecture-level government health departments.
The health departments will be supervised by a special committee of legislators, political advisors, medical experts, donors and media representatives.
Expenditures will also be subject to public supervision, according to the guideline.
Source: Xinhua

Ministry of Health clarifies that 'bulk billing' free treatment scheme will only be a pilot

China’s Ministry of Health denied a statement that a medical payment system that allowed patients to pay after treatment will be introduced nationwide, but confirmed that the system was encouraged to promote in pilot regions.
The pilot system reveals a change in China’s medical payment system – hospitals will pay the fees under related policies for patients first and settle the accounts with the medical insurance then.
Earlier, state-run China Central Television reported that the ministry will introduce the system of “Pay after Treatment” in hospitals across the country this year.
But Jiao Yahui, head of the ministry’s medical management division, said on Tuesday that the system will only be promoted in some qualified pilot regions.
Under the new system, patients, especially those suffering extreme conditions, will receive treatment first. Hospitals will pay the fees for them first and repay by medical insurance later. After the treatment, patients will only pay the part that is not included in the medical insurance.
Currently, most Chinese citizens must pay their bills and apply for a reimbursement covered by medical insurance, usually more than 70 percent of the total treatment fees, Xinhua News Agency reported.
Jiao said the “Pay after Treatment” system was first tested in a hospital in Beijing in 2009. Now more than 20 provincial regions are carrying out the pilot programs in local hospitals, Xinhua said.
Jiao said the new system will not be adopted nationwide in the short term due to an immature social credit system and insufficient medical insurance in the country.
Some patients may "disappear" without paying treatment fees after leaving hospital, which has created risks for the hospitals, according to Jiao. Hospitals will not be able to get the money back if patients don’t buy any medical insurance, Xinhua said.
But in coastal wealthy regions, hospitals won’t face such risk. Medical insurance departments, instead of hospitals, will pay in advance for patients who have bought medical insurance, the 21st Century Business Herald reported.
An unnamed director with the medical insurance department of a major hospital in Shanghai told the paper on Tuesday that the department will allocate one twelfths of the annual amount of medical insurance to the hospital every month and the money can totally cover what patients need.
The paper said the above system of payment in advance by medical insurance department can support the “Pay after Treatment” medical payment system. But it hasn’t introduced in most regions of middle and west China.
Zhu Hengpeng, head of the Center for Public Policy with the Institute of Economics of Chinese Academy of Social Sciences, believes that the reform of medical payment system is just a technical matter, what matters the most is the reform of the medical service supply system, the paper reported.
Currently in China, public hospitals have monopolized the medical service, it’s hard for the new payment system to work, Zhu said.
Source: Morning Whistle

Health care for older Chinese people who lose their only child

by Li Yan and Wu Shufang
Over the past three decades, the one-child family planning policy in China has had a substantial role in population control and in boosting the economy. However, it has also brought about a new phenomenon of “childless” older people in China, and this group is expanding rapidly.
In 2011, the number of families who lost their only child across China rose to more than 1 million—a figure that is estimated to reach 10 million by 2035. In a country with a seriously flawed health system, elderly parents are heavily reliant on their children. The death of an only child at a time when parents are unable to have another can cause pronounced psychological trauma, including long-term grief, depression, and anxiety about a lonely old age without an adequate pension or proper health care.
Support from the government is essential in relieving the difficulties currently faced by the childless elderly in China, and the difficulties they face in the future. Such support includes three major aspects. The first is health and social care, including policies to support family care services, better quality nursing homes, and the creation of various community health-care services. The second is economic support. To many of these parents, loss of their offspring immediately means the loss of their only hope of financial security. Although the Chinese Government has begun to schedule plans for providing support to elderly people who have lost their only child, detailed regulations, practical enforcement at the grassroots level, and pension insurance are urgently required. The third aspect is that of spiritual comfort. Several local governments in China have taken steps to act on this; for example, in September, 2012, the Beijing municipal government launched a scheme to provide psychological support at community care centres for the childless elderly, and this scheme now covers around 3900 families in Beijing who have lost their only child. However, the gap in assistance is still vast. The government should increase cooperation with non-governmental organisations in setting up community service centres that can provide door-to-door services for the childless elderly, providing them with psychological care and emotional comfort. Another approach that could be considered by the government is the encouragement of volunteers and training of social workers to offer free psychological consultation and mental health interventions.
Moreover, the media should be encouraged to report on the childless elderly and raise attention to this newly vulnerable group.
Source: Lancet

Private hospitals target China's growing middle class

by Sylvia Pan, United Family Healthcare
A decade of economic growth has created an ever-expanding middle class in China. With a better education background and bigger disposable income, they have become a major force as consumers in pursuit of a better way of life.
Yet the explosion of this vigorous and demanding class, combined with the problem of having the world's fastest-growing aged population, has also led to higher expectations regarding healthcare.
Before the 1990s, China's public medical institutions used to be the first, if not the only choice for most consumers, but through personal contact with foreign healthcare facilities when traveling abroad, and the changing concept of health management, today's emerging middle class has new requirements for medical services.
They want to be more involved in the decisions made regarding their care and prefer a personal, private physician rather than a doctor they are unlikely to see a second time from a roster of rotating faces. They also expect clean, well-maintained facilities, efficient systems and courteous medical staff.
The desire for more respect, privacy and dignity in care services is prompting changes in the healthcare business model, one that moves away more from a passively accepted public management system to that of private institutions offering more diversified medical services.
Over the past six years, spending on healthcare in China has grown by 19 percent. Between 2006 and 2009, total annual healthcare spending more than doubled to $251.8 billion (185.6 billion euros). It is estimated it will exceed $705 billion by 2015.
However, China's current healthcare system is mainly composed of large public non-profit hospitals and only a few private institutions. These big hospitals are generally less sophisticated in their management systems and have a weak organizational structure, simple financial management and limited planning and organizational control, according to a report by PricewaterhouseCoopers (PwC).
The report says most hospitals are not yet true corporate bodies with self-controlling and self-stimulating mechanisms. They are not operated under the normal business principles found in international hospitals, so their ability to respond to market and social demands is limited.
The healthcare system structure in China is such that the hospitals are not sufficiently aware of the need to strive for a competitive and quality service, the report adds. Many medical institutions have lower staff levels and are less efficient than those found internationally.
For years China's public health sector has experienced severe growing pains. Many feel public hospitals are overrun with patients, some of whom have to wait for days just to see a doctor, far less to get a full consultation.
Many complain that seeing a doctor in a Chinese hospital is like working on the assembly line - you talk with doctors for three to five minutes, receive the test results, get the prescription and then pay for medicine and other costs.
In 2010, the ChinaCare Group, one of China's leading international healthcare consultancy firms, published a survey of more than 1,000 people classified as middle class from three big cities .
It found that more than a quarter of the patients were dissatisfied with the public health system. Reasons most commonly cited were long waiting periods, poor physical conditions and the attitude of staff members.
Such a system obviously can't meet the healthcare expectations of the burgeoning middle class, who want a full and proper consultation with a doctor.
Many even hope to be able to build up a relationship with a regular family doctor who can give them treatment and advice based on family members' medical history. Family doctors are common in many countries, but rare in China.
However, the Chinese government is aware of the diagnosis. In response to increasing pressure on the public healthcare system and desire by the emerging middle class for private care, curbs on foreign investment in medical institutions have been lifted.
Foreign investment was limited to 70 percent until November 2010, when the government announced that these restrictions would be gradually lifted.
From January last year, full foreign ownership was allowed, and investment was "encouraged" in China's 2011 Foreign Investment Industrial Guidance Catalogue.
Furthermore, China's 12th Five-Year Plan (2011-15) dictates a clear, supplementary role for the private sector, with the aim of raising standards of care and addressing the growing healthcare needs of middle and upper-middle class Chinese.
Today's Chinese consumers are neither complacent nor compliant, and live in an environment where rapid change is the norm. China's growing urban middle class has become sophisticated and demanding, with requirements such as customer-friendly healthcare and environment, and options to receive patient-centered healthcare.
Note too that Chinese consumers' disposable income stretches further than in developed countries. Affluent Chinese are mostly concentrated in large cities, such as Beijing, Shanghai and Guangzhou, and these are considered the prime markets. But the real spending power lies within the young and massive urban middle class.
As a result, China's healthcare system needs to accelerate its reforms to meet the needs of the growing urban population. Currently, a large gap exists between the demand for these services and their availability.
United Family Healthcare, the first private hospital in China opened in 1997, tries to meet the changing requirements of consumers by adopting an appointment system with a one-on-one service to protect the privacy of patients.
Private hospitals like UFH that previously aimed to serve foreign residents and visitors, are now finding that the more affluent among the Chinese middle class prefer to pay more for their healthcare.
However, these private hospitals, most of which are foreign-owned and joint ventures, are run on a small scale. The average joint-venture hospitals have less than 50 beds, and according to the PwC report, there is not enough capacity to meet the healthcare needs of the growing middle class.
Though the costs of private hospitals are higher than in the public healthcare system, and government health programs and Chinese insurance policies rarely reimburse them, we see that more Chinese consumers are willing to cough up for treatment, because for patients, it means shorter waiting times, ostensibly better doctors, modern technology and international standards.
Source: China Daily

Shaolin medical insurance

by An Baijie
A universal medical insurance policy funded by government subsidies extends coverage to communities including monks and nuns such as those at the famous Shaolin temple.
Shi Yanlin was taken aback five years ago when some monks asked him how to get coverage under the country's health insurance policies.
Shi, 52, executive director of Shaolin Temple, China's most famous Buddhist monastery, with a history of more than 1,500 years, is in charge of the temple's health and medical issues.
Since 2003, when the country began establishing universal healthcare, religious groups, including Shaolin monks, began to get coverage.
So far, more than 1.3 billion people on the Chinese mainland have joined one of the three basic medical insurance policies that cover either urban or rural residents.
Government subsidies, not mandates, led to that high coverage, said Gordon Liu, a professor of economics at Guanghua School of Management of Peking University.
In the case of Shaolin, to find out how to buy health insurance for the temple's monks, Shi submitted a proposal to the local government during the annual session of the Henan provincial political advisory body in 2008.
He said health insurance should cover the monks even though there were no regulations on religious groups' health insurance at that time.
Jing Shuzhen, director of Dengfeng city's health bureau, said that the government started to plan for the monks' health insurance after receiving Shi's proposals.
"There are many Buddhist and Taoist temples in Dengfeng in Henan, and their demand for medical health must be met by the government," she said.
According to Shi, Shaolin Temple's executive director, the temple spent less than 30,000 yuan ($4,800) buying the government-held public health insurance for its staff members last year, but they finally got a reimbursement of more than 90,000 yuan in hospital costs.
However, participating in the policy was not easy and confusing at first, Shi recalled.
The primary problem originated from the country's existing policies. For example, a person's health insurance is attached to their hukou (household registration) status. There are two kinds of hukou status, rural and urban, and health insurance for rural residents costs less than it does for urban dwellers.
However, most of the temple's 267 monks were not sure whether their hukou was rural or urban, Shi said.
The current law rules that people with rural hukou have the use rights of farmland, but all of the monks with rural hukou gave up their farmland. As a result, identifying their hukou statuses was difficult.
"Buddhist doctrine says all human beings are equal, and we have no idea about the hukou differences, particularly here within the temple," Shi said.
Because Shaolin Temple is in the rural area of Henan province, the local government enrolled the monks there into the rural health insurance system rather than the urban system in late 2008, said Jing of the Dengfeng health bureau.
"There were no such regulations on religious people's health insurance until 2011, so we kept low profile on this issue at that time," she said.
China launched the new rural cooperative medical care system in 2003 in a bid to ensure that the country's vast number of rural residents have access to affordable medical treatment and to reduce disease-triggered poverty. Under the policy, both the government and individual contribute.
The annual government subsidy for each participant has increased from 20 yuan in the starting year, 2003, to 280 yuan in 2013, statistics from the Ministry of Health showed.
Matching that, individuals under the policy each paid 10 yuan in 2003 and 60 yuan this year.
In return, participants have 75 percent of their inpatient expenses reimbursed under the rural cooperative medical program, and coverage for outpatient costs are further boosted, Health Minister Chen Zhu said at the national health work conference held early last month.
In Henan, rural participants can have at most 90 percent of their medical expenses reimbursed, Jing said.
At Shaolin Temple, in 2012, a total of 415 people, including monks and more than 130 children in the temple's orphanage, participated in the policy, according to the local health bureau.
One of the temple's monks was diagnosed with cancer and died last year. He had about 60 percent of his medical cost reimbursed under the insurance, and the temple paid the rest, Shi said.
"A 78-year-old monk named Shi Xingzhou in Shaolin Temple suffered from heart disease and went to the hospital at least twice a year for surgeries," he said. "An average of 10,000 yuan of his medical expenses was covered by the health insurance every year."
Preventive care
"Even in developed economies like the United States, health insurance is a heavy financial burden for the government," Shi said. "So we encourage the temple's people to protect themselves from getting sick by doing physical exercises as often as possible."
Most of the monks in Shaolin Temple are younger than 40 years old, so their medical expenses are not large, Shi noted.
Also, Shaolin Temple has a public-funded medicine bureau, where the monks and the tourists can get medicinal herbs free of charge to treat some minor diseases.
To date, the number of people covered by the new rural cooperative medical care system has surged from 80 million in 2003 to 900 million nationwide now.
"The coverage has kept growing though it's not so generous," said Wu Ming, assistant director of the Peking University's Health Science Center.
Also, as an important part of the ongoing medical reform in China, the system helped the country edge much closer to universal healthcare, she said.
By the end of 2015, basic health insurance coverage is expected to rise to about 98 percent from the current 95 percent, according to the Ministry of Health.
This is despite the fact that the coverage is not mandatory, said Liu, the economics professor.
Wang Yuliang, a resident of Sanyao village in Xi'an, Shaanxi province, said he joined the policy in 2004.
"I only paid 10 yuan as the annual premium and got a reimbursement of more than 2,000 yuan that year," he said, adding that the policy is not as good for outpatient care as it is for inpatient services.
"But given the quite low premium, I will constantly participate," said the 54-year-old man, who has diabetes and high blood pressure.
Some, however, thought otherwise about the policy.
Jing, the health bureau official, said that the monks and nuns at Sanhuangzhai Buddhist Hall turned her down when she asked if they would like to buy the health insurance.
"A 92-year-old nun told me that she has gotten used to the traditional herbal therapy self-provided at the Buddhist hall, and she doesn't want to go to a hospital," Jing said.
Besides, the Buddhist hall is on top of a 900-meter mountain, and it's difficult for the elderly nuns and monks to go down to get to the hospital, she added.
Shi, the Shaolin Temple executive director, suggested that the government should attach more importance to public education of basic health.
"If 30 percent of the government's medical cost could be used to educate the people about how to prevent diseases, there will be fewer patients, and the government's health insurance burden will be eased," he said.
Famous for its kung fu performance, Shaolin Temple has a higher income from ticket sales than many other temples, and it can afford to pay the monks' medical expenses.
"For many less famous temples, where there are not as many tourists, health insurance might help more to ease the monks' financial burden," Shi said.
Nationwide, local governments issued rules in recent years concerning health insurance coverage of religious groups.
In general, they can choose to participate in the policies according to the location of their religious institutions like temples, Jing said.
Wu added, "No one should be left out if they were willing to join."
Read more: China Daily

Payment reform fails to fill medical insurance abyss

by Tian Peng and Zuo Lin
After three years of expansion, China's medical insurance system now covers 95 percent of the population. However, as the world's largest medical insurance program, it has come under great pressure to make ends meet.
On the one hand, medical insurance funds nationwide are struggling to foot skyrocketing medical bills resulting from soaring medical costs and surging compensation standards. Meanwhile, the current medical insurance system, which already boasts universal coverage, leaves little room for expansion. Therefore, increasing funding size hinges on rises in urban employment, higher income levels, and larger government allocations.
Compared with their foreign counterparts, Chinese citizens spend a large percentage of their salaries paying for social security, namely endowment insurance, medical insurance, unemployment insurance, employment injury insurance, maternity insurance, and the housing provident fund. Given that social security contributions and taxes already take up over 25 percent of individuals' total wages, it would be difficult to raise the percentage any time soon.
Take Beijing for instance. The municipality's medical insurance fund experienced average annual growth rates of 20-30 percent between 2007 and 2011. In comparison, medical costs increased 50 percent in 2010 and 38 percent in 2011 and have been growing faster than average wages since 2008.
The public's demand for medical services is soaring while the medical insurance contribution-wage ratio is already high. The Center for Public Policy at the Institute of Economics under the Chinese Academy of Social Sciences (CASS) estimated that under the current system, most Chinese cities will see their medical insurance funds running out of capital before 2020, though they may vary in population size and age structure.
Given the circumstances, the top priority for policymakers is to ensure efficiency and fairness in the deployment of medical insurance funds.
Medical insurance funds worldwide generally pay hospitals in two ways: one is through a fee-for-service system under which hospitals are paid based on specific services they provide, the categories their services fall into, or the categories of illnesses they treat; the other is to pay hospitals fixed total amounts determined in advance (i.e. the "total prepayment" mechanism) or predetermine per capita amounts of payment and pay hospitals based on the number of patients they treat and predetermined price levels.
For a long time, hospitals in China have generally been paid based on specific services they provided. In other words, hospitals (doctors) that prescribed more medical examinations and drugs enjoy higher incomes. As medical insurance funds nationwide strive to keep down overall medical costs, the "total prepayment" mechanism is gradually gaining momentum.
The mechanism could effectively contain medical costs in the short term; however, on a closed medical service market where reform on the supply side lags behind and administrative forces play an increasingly larger role in allocating medical resources, payment reform alone could in effect "release demand while limiting supply," which in turn would make medical insurance funds unable to foot skyrocketing medical bills.
In the long run, opening up the medical service market should be the ultimate solution to adjust demand and supply and control medical insurance costs. An expert contends the first step of medical reform should be deregulating the medical service market, which is the simplest reform path with the least social impact.
Source: Caijing

China's most needy missed out on medical insurance

When Liao Dan, a 41-year-old Beijing resident, appeared in the Dongcheng District People's Court on July 11, 2012, facing charges of defrauding Beijing Hospital of medical fees, sympathy was so overwhelming that some netizens called for his acquittal.
Liao had forged an official stamp to evade medical fees for his wife, Du Jinling, who suffered from acute kidney disease. The couple, married 15 years with a 12-year-old son, earned little more than the government living allowance of 1,700 yuan ($270) per month. Laid off during a spate of state-owned bankruptcies a decade earlier, the meager and unstable income Liao earned as a manual laborer was nowhere near enough to cover the costs of Du's biweekly dialysis treatments, nearly 5,000 yuan ($794) per month.
Since Du is from Yixian County, Hebei Province, and does not have a stable job in Beijing, she would have had to return to her hometown to receive treatment eligible for medical insurance reimbursements. Liao doubted his wife could stand frequent travel between Yixian and Beijing. Sobbing several times during court, Liao testified, "I could not find any other way and just wanted to keep her alive."
According to Liao's lawyer, money donated by the owner of a software company in southern Guangdong Province to cover the medical expenses owed was among the reasons the court showed lenience in sentencing Liao on December 7, 2012. Instead of sentencing him to up to a decade in jail, as proposed by prosecutors, the court fined Liao 3,000 yuan ($476) and gave him three years in jail with four years' reprieve for defrauding the hospital of 172,000 yuan ($27,300) from September 2007 to November 2011.
Netizens donated over 500,000 yuan ($79,400) to pay for Du's future treatment.
Although China's basic medical insurance program had covered more than 95 percent of its population by the end of 2011, Liao's case once again sheds light on the urgency for the country to institute a universal social safety net to protect the most vulnerable and disadvantaged groups.
Sun Shuhan, a professor at the Beijing-based Renmin University of China, said people like Du, who are married to Beijingers and work and live in Beijing, should be able to have their medical bills refunded locally rather than be forced to return to their hometowns for treatment.
However, Lu Xuejing, a professor at Capital University of Economics and Business who studies social security policies, stands in opposition. She said that if government-sponsored medical insurance is available to all immigrants living in Beijing, it would place an enormous burden on medical facilities in the capital, where the most advanced medical resources in the country are located. "The local budget will not stand the pressure either," she said.
China's medical insurance system is segmented as each province has its own medical insurance fund, which only pays for the expenses of its registered residents.
Gu Xin, a professor at the School of Government of Peking University, said that in the long run, difficulties faced by families like Liao's could only be solved if medical insurance accounts were better consolidated fro smooth transfer between localities around the country.
Gu said that he had designed a universal health insurance system, where each citizen pays an annual premium of 200 yuan ($32) him or herself and receives 500 yuan ($79) in subsidy from a state-financed national health fund. The 700-yuan ($111) annual premium is calculated based on China's current medical consumption level. Under Gu's proposal, premiums for low-income earners would be entirely paid for by the government.
Source: Beijing Review