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China ramps up healthcare reform with pilot pricing scheme

China ramps up healthcare reform with pilot pricing scheme

The Chinese national flag is seen in Beijing, China, on Apr 29, 2020. (Photo: Reuters/Thomas Peter)

BEIJING: China stepped up its reform of healthcare service pricing at public medical institutions on Tuesday (Aug 31) with the announcement of a pilot programme aimed at controlling costs for consumers, ensuring service quality and incentivising providers.

China's state insurance fund, which helps patients cover their medical costs, is facing the combined pressures of a growing elderly population and a falling birth rate, prompting it to explore more efficient medical services.

Shortcomings in the pricing mechanism for medical services that have existed for years, such as gaps between regions and a lack of participation from medical professionals in setting prices, are also driving China's reforms.

In response, Chinese authorities including the National Healthcare Security Administration (NHSA) and National Health Commission (NHC) have issued guidelines for pilot programmes which will regulate price adjustments at public medical institutions to curb growing health costs.

"Adjustment to healthcare service prices ... will involve both price increases and decreases," the guideline said.

Market-driven pricing is allowed at private hospitals, but China will strengthen its regulation and, when necessary, take action such as pricing investigations, summoning hospitals for talks and public exposure of price irregularities, it added.

China has saved billions with a national bidding scheme where drugmakers vie to cut prices to bulk sell their products at public hospitals, known as a bulk buy scheme, potentially giving the government some leeway to increase prices for some healthcare services.

The government aims to kick-start the pilots in five cities, and have experience gained from programmes ready for national adoption by 2025, the guideline said.

Beijing will set guide pricing for frequently offered, general services, and allow some price fluctuation among public institutions in different regions and of different levels.

For more complicated services, public medical institutions can participate in determining government-guided pricing.

For certain speciality services and novel services, market-driven pricing is allowed, but their costs cannot account for more than 10 per cent of the total service prices at the institution.

NHSA said in a statement alongside the new guideline that the pilot programme for healthcare pricing is not designed to give back money saved from the bulk-buy program by increasing prices of certain healthcare services.

Source: Reuters

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