Establishing Institutional Guarantees for Universal Medical Care

From: English Edition of Qiushi Journal Updated: 2011-09-19 19:56
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    Health is essential to a person’s overall development. Establishing a system that ensures medical care is a fundamental social policy and such a system will play an important role in improving people’s health. Efforts to accelerate development of a system that ensures basic medical care represent a significant measure in the effort to ensure social justice and improve people’s lives.

    China has made outstanding achievements in reforming and improving the system that ensures medical care since the institution of the reform and opening up policy, especially in the last decade. These achievements are mainly in four areas. 

    First, the system now covers essentially all urban and rural residents through basic medical insurance for urban workers, basic medical insurance for urban residents, the new rural cooperative medical care system, and the urban and rural medical assistance system. As of the end of 2008, over 1.1 billion people were covered by the three basic medical insurance systems. 

    Second, the role of public finance is constantly expanding. Financing has become more diversified and is guided by government actions, resulting in an increasing number of people who are covered by medical insurance systems. The 2008 reimbursement rate for hospital expenses from basic medical insurance for urban workers was 70%, from basic medical insurance for urban residents 50%, and from the new rural cooperative medical care system 38%. 

    Third, a basic mechanism for overseeing and regulating contracted medical and pharmaceutical service institutions has been put in place. Some progress has been made in holding down irrational increases in medical costs. 

    Fourth, the basics of a service system under non-government management has been established, making it more convenient for people covered by the medical care system to reimburse their medical expenses.

    However, there are still some obvious areas in the system that ensures medical care where the system is not meeting the needs of the people for health care and social development and is not in line with economic development. This is evident in a number of ways. Some urban and rural residents are not covered by basic medical insurance and the problem of the high cost of medical care has still not been basically resolved. The rate of compensation from basic medical insurance is still low, and the cost of medical treatment for some people, especially those with major diseases and those who are seriously ill, is still too high. The system that ensures medical care is not uniform throughout urban and rural areas and between different regions, making it difficult to provide continuous insurance coverage when a person’s status changes and when a person moves from one area to another. The level and quality of service and management of medical insurance need to be improved.

    January 14, 2009, residents relocated for the building of the Panshitou Reservoir in Xiaokuanhe New Village, Weixian Town, Jun County in the city of Hebi, Henan Province show the public welfare medical insurance cards they have received. /Photo by Li Guoqing, supplied by Xinhua  

    The Chinese government promulgated the Opinions on Deepening Reform of the Health Care System and the Plan for Addressing Near-term Priorities in Health Care Reform (2009-2011) in March 2009 to address these issues. The basic medical care system in these documents includes four systems, the system that ensures medical care, the public health service system, the health care service system and the pharmaceutical supply system. The documents put acceleration of improvement in the system that ensures medical care first among the five near-term priorities in reform, showing that the Communist Party of China and the Chinese central government are very concerned about improvement in the system that ensures medical care. The documents define an overall plan for development of the system based on past experience, with the focus on solving the issues of most concern, most direct impact and most practical consequences for people. In addition, the documents defined many new ideas, policies and requirements. The most outstanding feature of the documents is the goal defined for the reform, i.e. to enroll the entire population in the basic medical insurance system. The specific goal is to extend basic medical insurance for urban workers, basic medical insurance for urban residents and the new rural cooperative medical care system to cover nearly all urban and rural residents within three years so that the insurance participation rate exceeds 90%. The reform should result in the establishment of a fairly comprehensive system that ensures medical care by 2020.

 In the past, when China practiced a planned economy, the system that ensures medical care was only available to employees of state-owned enterprises. During the transition between a planned and market economic system, the system that ensures medical care served as a supporting measure in the reform of state-owned enterprises. In the current stage of building a moderately prosperous society in all respects, the documents setting out plans for medical care system reform define universal coverage as the goal. The goal is to make medical care available to all the people in China, now numbering 1.3 billion, something our ancestors have dreamed about for thousands of years. This will be one of the greatest undertakings in the world.

  The key to development of the system that ensures basic medical care is implementation. There are currently many conditions that favor accelerating development of the system. The great importance attached to the issue by Party committees and governments at all levels provides a strong political and organizational guarantee for success. At the same time, the increasing overall strength of the country is providing a more and more solid material foundation for the effort. We have gained a great deal of practical experience through the rapid development and stable operation of basic medical insurance for urban workers, basic medical insurance for urban residents and the new rural cooperative medical care system, and the strong demand for medical care in society has created a sound environment for the fast development of the system. Meanwhile, we are fully aware that we are facing some serious challenges. Because of the generally low level of China’s economic development and the impact of the international financial crisis, some poorly performing enterprises and economically deprived persons are unable to participate in the insurance system. There is a large gap between urban and rural areas and between regions, making it a very difficult and complex task to bring all the medical insurance systems up to a commensurate level. The average age of the population is increasing, causing the overall cost of providing medical care to rise and making it difficult for medical insurance premiums to keep up expenses. Therefore, we must seize the opportunities and proceed with full confidence in facing the challenges head-on and taking concrete measures to address the issues. The key at present is to concentrate on implementation, first of all working to benefit the people, and placing the focus on including more people in the system to realize the goals defined in the two documents on medical system reform. In the next step, efforts will be focused on four areas.

  1. Efforts will be made to speed up the process of bringing people into the system to reach the goal of universal coverage as soon as possible. Nearly 200 million people are currently not covered by basic medical insurance. Some of the people in this group live in areas where a medical insurance system has not been implemented, some cannot afford the insurance premiums, and some young healthy people don’t think they need health insurance. Efforts to expand participation will mainly rely on 4 measures. First is expansion of efforts to provide basic medical insurance for urban residents to include all towns and cities in 2009. This work was started in the second quarter this year and should bring the participation rate in cities first implementing the system this year to over 50% and in the cities that participated in earlier pilot programs, to over 80%. Second is implementation of the policy of granting government subsidies. The problem of uninsured workers who have retired from the state-owned enterprises that were shut down or declared bankrupt should be resolved this year, for which a one-time subsidy of 42.9 billion yuan has been earmarked in the central government budget to help affected workers pay health insurance premiums. Local governments will also increase budgetary allocations to help uninsured workers who have retired from all kinds of enterprises that have gone bankrupt or are performing poorly purchase health insurance. Third, policies concerning participation in insurance programs will be adjusted to meet the requirements of people without fixed employment and rural migrant workers. Fourth is to improve the way insurance programs are managed and intensify promotion efforts to increase interest in medical insurance so that everyone wants health insurance, can easily obtain health insurance and can afford the premiums.

  2. The level of compensation will be steadily increased in line with improvement in conditions in China. China is still in the primary stage of socialism and will remain so for a long time to come. It is therefore inevitable that the level of the medical care is to low start with and can be increased only in line with economic and social development. We plan to concentrate on three areas over the next several years. First, efforts will be made to control the speed and order of increase in compensation. The maximum amount of compensation paid by health insurance will be increased first. This should in principle be accomplished this year, resolving the high cost of treatment for major illnesses that has been of great concern to the general public. Increasing the proportion of the funds going to local medical institutions should be the first consideration to direct more insured patients to local level medical facilities for initial diagnosis. Second, everything possible should be done to reduce the proportion that economically deprived patients have to pay for medical care in an effort to ensure that such patients have access to adequate care. Third, level of compensation paid to patients in different systems and areas should be evened out as much as possible. Within three years, the reimbursement rate paid by basic medical insurance for urban workers should be raised to about 75%, by basic medical insurance for urban residents to about 60%, and by the new rural cooperative medical care system to about 50%. These increases should narrow the gap between urban and rural areas, between different systems and between different regions.

    3. Management and services for medical insurance will be improved, taking into consideration the requirement for sustainable development and greater convenience for the people. First, the oversight and management system and internal controls for medical insurance funds need to be improved so that the funds will play its role for the best. We need to increase transparency in the use of the funds, eliminate potential threats to the security of funds, and maintain a reasonable level of the balance of the pooling funds. Second, to improve the level of pooling. A special campaign will be carried out to change collection of funds for basic medical insurance for urban workers and for basic medical insurance for urban residents so that funds are basically all collected at the city level by 2011. Third, we will carefully coordinate policies on medical care, work to join different systems, formulate a method for transferring people’s medical insurance coverage from one area to another, work out a way to combine annual premiums for basic medical insurance for urban workers, basic medical insurance for urban residents, and the new rural cooperative medical care system, and improve management and services for patients receiving medical treatment outside the jurisdiction of their insurance coverage. Fourth, management will be standardized and the service network and management of local infrastructure will be improved by standardizing business practices in order to provide more convenient and efficient services to patients.

    4. We will work to both control costs and improve quality by strengthening oversight and management for medical services. We will improve planning and coordination to hold the cost for medical services down to a reasonable level and improve the quality and efficiency of services following a principle of striving for both fairness and good productivity and giving play to both the leading role of the government and the role of market forces. First, we will develop a mechanism for carrying out negotiations between medical insurance providers and medical institutions and drug suppliers to reduce the cost for medical services. Second, we will work out different methods for settling medical bills, including payment according to the type of illness, lump sum pre-payment and payment according to the number of patients so that medical institutions and physicians can actively participate in controlling the cost for medical services. Third, we will work to improve oversight and guidance for medical services in medical care system. We will improve management of agreements concluded with designated medical institutions in the system and introduce a credit rating system for them. We will assess the quality of medical services in terms of the technical standards and norms set by concerned government authorities, such as standards for hospital admittance and discharge, clinical diagnosis standards and guides for dispensing medication. 



Note: Yin Weimin is the Minister of Human Resources and Social Security of the People’s Republic of China

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