Tuesday 7 April 2009
Brave new directions amid unanswered questions and ‘strategic ambiguities’
The central government’s health care reform blueprint has finally been released after three years of intense bickering between various interest groups, and the key question remains: will the mainland’s 1.3 billion people get to enjoy affordable and acceptable health care?
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Brave new directions amid unanswered questions and ‘strategic ambiguities’
Josephine Ma
7 April 2009
The central government’s health care reform blueprint has finally been released after three years of intense bickering between various interest groups, and the key question remains: will the mainland’s 1.3 billion people get to enjoy affordable and acceptable health care?
The government has pledged to spend 850 billion yuan (HK$965.34 billion) on medical care between now and 2011 - 331 billion yuan of which will be provided by the central government.
It also promises medical insurance for the majority. But schemes for civil servants, and urban and rural dwellers, vary greatly, and protection for the rural poor remains low.
The plan also contains a massive boost for grass-roots clinics and medical practitioners, expansion of basic health care at the community and village levels, and a mechanism to ensure cheap, essential medicines.
But many issues remain unresolved in the final draft hammered out by 16 government ministries and departments.
A draft for public consultation released late last year was criticised as being a watered-down collection of compromises.
The release of the final version was further postponed by 11th-hour challenges made by medical practitioners who are members of the Chinese People’s Political Consultative Conference, during the annual session of the advisory body last month. “They originally said it would be announced on March 18 and they have delayed it,” said a public health expert familiar with the consultation process.
“Of course there are disagreements. And the disagreements are over some fundamental issues.”
One of the sticking points is how to reduce the price of drugs prescribed by hospitals.
Hospitals were given the right to impose a 15 per cent surcharge on medicines they dispense, to make up for a sharp decline in government funding - from about 90 per cent of the total cost of an operation to 10 per cent - during the previous round of health care reforms in 1992.
To boost profits from drug sales, which make up more than half of their total income, hospitals are notorious for prescribing expensive and unnecessary drugs, and in excessive amounts.
In extreme cases, patients have been persuaded to have unnecessary surgery or transplants, with damaging or even fatal results.
However, no solution was provided by the plan apart from pledging it would “explore various effective ways to gradually reform” the mechanism of drug surcharges.
Earlier speculation in the media, that the government might require hospitals to spin off their pharmacies, was not mentioned in the plan.
Drew Thompson, director of China studies at the Nixon Centre in Washington, said the ultimate solution was for hospitals to improve transparency and accountability.
“The most important need is improved accountability within the system,” he said.
“Spinning off hospital pharmacies and altering compensation programmes will not necessarily change doctors’ or hospitals’ behaviour.
“It might encourage even worse behaviour, such as undisclosed relationships between the doctors, hospitals, pharmacies and possibly even drug companies.”
The Ministry of Health suggested asking medical institutions to turn over all revenue to the government in return for public funding.
But the question of how to evaluate the performance and operational costs of a hospital remained unresolved, and medical practitioners criticised the proposal as a step back to a planned economy.
Under the new plan, only grass-roots medical institutions would have to hand over all their revenue and receive funding from the government.
Using ambiguous language, the plan appears to give leeway to local authorities to come up with their own solutions to public hospital reform.
Medical practitioners have urged the government to open new sources of income for hospitals and practitioners, such as allowing private investment in public hospitals, creating a level playing field for private and public medical service providers and allowing doctors to practise in various locations.
The new plan says only that the government would increase the proportion of private hospitals “appropriately”.
Zhang Wei, assistant professor of management for the Shanghai-based China Europe International Business School, said the blueprint had intentionally left many “strategic ambiguities” in key areas to give room in which policymakers could manoeuvre in future.
He said the debate had put too much emphasis on medical costs and investment instead of evaluating the value created by medical services.
Simply reducing the price of some drugs would not be enough, he said, because the cost-effectiveness of drugs should be evaluated by their price and dosage as well as efficacy.
Dr Thompson said: “Transparency and some form of effective oversight - potentially even independent oversight - is necessary.
“Someone has to represent the patient’s interests in the system. Lawyers and courts do not perform that function in China as they do in the [United States].
“The biggest challenges are with governance, not prices or services.”
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