The State Council issued yesterday (21st) the "Planning and Implementing Plan for Deepening the Reform of the Medical and Health Care System during the Twelfth Five-Year Plan period" (hereinafter referred to as the "Program"). In the next three years, China will focus on lowering drug costs and inspections in public hospitals. We will strictly control non-essential medical services in public hospitals, reverse the behavior of profit-taking in public hospitals, and prohibit the construction of public hospital loans.

Will control non-basic medical services in public hospitals

The “plan” requires that local health departments must strengthen the supervision and control of medical expenses, and incorporate control management objectives such as the average cost and total cost growth rate, the number of hospital beds, and the ratio of medicines (the ratio of drug revenue to total hospital revenue) to the public sector. The objective management responsibility system of the hospital is used as an important indicator of performance appraisal, and the irrational use of drugs, materials, inspections, and repeated inspections for the purpose of pursuing economic interests are investigated in a timely manner. Strengthen the monitoring of the rapid increase in the cost of disease diagnosis and treatment, and control public hospitals to provide non-basic medical services.

The "Program" clearly states that China will insist on the dominant position of public hospitals in providing basic medical and health services to urban and rural residents, further clarify the purpose of the government's public hospitals and the duties to be performed, and reverse the behavior of public hospitals. Reasonably determine the number and layout of public hospitals (including hospitals owned by state-owned enterprises), and strictly control construction standards, scale, and equipment. It is forbidden to build public hospital debt.

High-value consumables for hospitals implement centralized purchasing

Eliminating the “drug-to-doctor” mechanism, promoting the separation of medicines, and gradually eliminating the drug addition policy, the public hospitals’ compensation was changed from three channels of service fees, drug addition revenue, and financial subsidies to service fees and financial subsidies. The hospital's medicines and high value medical supplies are subject to centralized purchasing. Government-invested public hospitals purchase large-scale equipment for public hospitals to set inspection prices at the cost after depreciation. Large equipment purchased through loans or fund-raising is, in principle, bought back by the government. Repurchases are difficult to check prices for a limited period. The inspection of medical institutions is open to the society. Inspection equipment and technical personnel should meet statutory requirements or have legal qualifications to achieve mutual recognition of inspection results. Raise the charges for medical treatment, surgery, and nursing care to reflect the reasonable cost of medical services and the value of medical personnel's technical and labor services. The charges for medical technology services are included in the scope of medical insurance payment as required.

Basic medicine list will increase children's drug use

The "Programme" clearly states that in the next three years or so, China will optimize the variety and categories of essential drugs based on the use of essential drugs in various regions, increase the number of chronic diseases and children's drug use, and reduce the use of drugs with low use rates and low coincidence rates. Maintain a reasonable amount of essential drugs, and gradually standardize basic drug standards, specifications and packaging. The basic medicines shall be supplemented by the provincial people's government, and the supplemental authority shall not be delegated to the city, county or grassroots medical and health institutions. At the same time, it insists on the central procurement of essential medicines in the province as a unit, and implements procurement policies such as the integration of recruitment and price, price-price linkage, double-envelope system, centralized payment, and overall monitoring. Further improve the basic drug quality evaluation criteria and evaluation methods to ensure that essential drugs are safe, effective and timely. Basic pricing for exclusive products and basic medicines that have been repeatedly stabilized and the market supply is adequate has been piloted by the government for unified pricing. For basic medicines with a small amount and clinical necessity, the supply can be ensured through fixed-point production through tenders.