Effectively Promote the Reform of the Pharmaceutical and Healthcare System with Great Confidence to Tackle Difficulties

From: English Edition of Qiushi Journal Updated: 2011-09-19 17:58
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 The CPC Central Committee and the State Council made a major decision on the reform of the pharmaceutical and healthcare system in April 2009. After implementation over the past year or so, the reform has made active progress and yielded notable results. The effort has increasingly focused on key and difficult issues of the reform and it is also confronted with new requirements and emerging challenges.

 I. Progress and results of the reform

 While carrying out the reform over the past year or so, thanks to the overall planning and coordination made by the Leading Group for Deepening the Reform of the Pharmaceutical and Healthcare System of the State Council and earnest implementation and careful organization of all localities and departments, key tasks in five areas have been initiated in a gradual and orderly fashion. The reform basically has had a good start.

 Firstly, the people are enjoying initial benefits from the reform. Notable progress has been made in developing a guaranteed medical care system with coverage for all the people. The basic medical insurances for urban workers and residents have covered 401 million people, including 6.28 million retirees from state-owned enterprises closed or forced into bankruptcy, 14.62 million college students, and 43.35 migrant workers in particular. The new rural cooperative medical care system has covered 833 million people, accounting for 94.2 percent of the total rural population. The urban and rural medical assistance programs have covered all rural and urban residents receiving costs for living allowances and childless and infirm residents who receive subsidies to cover food, clothing, medical care, housing, and burial expenses. The level of basic medical care has improved steadily. A national system for basic drugs has been initially implemented in 30 percent of all community medical institutions run by government. The prices of drugs have thereby decreased by about 30%. The pace of developing community-based medical and healthcare service system has been accelerated noticeably. The central budget has directly supported the development of nearly 1,000 county-level hospitals and over 4,700 rural and urban community medical and health institutions to improve their conditions and capacities for providing services. The basic public healthcare service is going to be provided to all equally. The pilot reform of public hospitals has been launched. 

  Representatives of residents of Shaoxing City, Zhejiang Province, showing off their social security cards, which they just obtained on June 30, 2010 when the city held a ceremony for issuing the cards for the first time. On July 1, 2010, the city became the first in Zhejiang Province to issue a “universal card” for urban workers to enjoy trans-regional medical care. This kind of social security card keeps track of information and allows commercial transactions, allows electronic certification and allows information queries. It is mainly used for handling the matters associated with social security, such as job hunting, registration of unemployment, social insurance, settling accounts for medical care and application for and issuing social welfare. / Photo supplied by Xinhua

 Secondly, it has been verified that the direction and approach of the reform are correct. The CPC Central Committee and the State Council defined the basic direction and general principles of the reform of the pharmaceutical and healthcare system, namely to maintain public medical and healthcare services as a public welfare undertaking and make the basic medical and healthcare system public goods for all to realize universal coverage. This is a major innovation of the reform and development of China’s medical and healthcare program that was made from the concept to practice. How then do we establish a basic medical and healthcare system and provide universal coverage? These questions have been solved during the practice in the past year. Firstly, the most outstanding feature of this reform is the rational division of basic and non-basic medical and healthcare services. The basic medical and healthcare services are public goods which are provided by the government. It is the government’s responsibility to ensure that all people have sustainable access to the basic medical and healthcare services. The practice over the past year or so has proved that this notion is suitable for the current condition and development stage of China. It also addresses the most outstanding issue of the reform and development of pharmaceutical and healthcare system that we cannot yet provide basic medical and healthcare services to all on an equal basis. Secondly, the focus of the reform in the short term is to lay a foundation for the system and improve community medical institutions. The long-term goal of the reform of pharmaceutical and healthcare system is to establish a basic medical and healthcare system that covers all urban and rural residents by 2020. The main objective we need to complete by 2011 is advancing the five key tasks. To accomplish this, we have made the improvement of community medical institutions a top priority of our current efforts. We have linked up the five key tasks to guide resources, personnel, and technologies towards the community medical institutions. With the efforts made over the past year or so, the hardware and service capabilities of the community medical institutions have improved obviously. Thirdly, a permanent operating mechanism for the pharmaceutical and healthcare system has been established. The core effort in providing the basic medical and healthcare system as public goods for all is ensuring supply and the key work entails setting up a mechanism to achieve this. In the first year of the reform, government at all levels increased investment in the basis and foundation of the system and in the community medical institutions, and launched the reform of the basic drug system and of the public hospitals. These two reforms are designed to solve long-standing problems in the pharmaceutical and health system and combine efforts to increase investment and set up the mechanism to promote the effective and standard operation of all rules and systems.

 Thirdly, the economic and social significance of the reform of the pharmaceutical and healthcare system have become more evident. Deepening the reform of the pharmaceutical and healthcare system is urgently required in the work to ensure the rights and interests of the people in health and to improve the lives of the people. Medical and healthcare issues are among the most practical issues linked to the interests and concerns of the people. Resolving these issues is also the internal requirement for manifesting the essential objective of the CPC and consolidating the CPC’s position as a ruling party. Meanwhile, the reform of the pharmaceutical and healthcare system may serve as an important measure for expanding domestic demand and promoting stable and rapid economic development. The reform of the pharmaceutical and healthcare system was initiated against the backdrop of the international financial crisis. While the growth of government revenue fell in 2009, expenditures on medical and healthcare services of the financial department at all levels exceeded 390.1 billion yuan, an increase of 38.1% over the previous year. The measures to improve the system of medical and healthcare services, to ensure that basic public health service can be accessed equally by all, and to encourage and lead non-government capital to invest in medical and healthcare services to promote the development of the medical industry can directly expand investment and effectively increase job opportunities. The effort to accelerate development of the safety network of medical security has improved consumer expectations and expanded consumer demand, which is helpful for strengthening the endogenous power of economic growth.

 II. Current situation of the reform

 With the deepening of reform of the pharmaceutical and healthcare system, the tasks for the reform become more arduous and the situation becomes more pressing.

 Firstly, the effort of the reform has gradually focused on key and difficult issues. The reform of the pharmaceutical and healthcare system has entered a crucial stage in tackling difficulties. The reform of the pharmaceutical and healthcare system involves many stakeholders. While the pilot reforms of the national system of basic drugs and public hospitals have progressively entered a substantial stage in which the interest pattern is to be transformed, the reform becomes more difficult and complex. On the one hand, we have to work out effective measures to introduce innovations to the system and mechanism and to promote the reform in a comprehensive way. On the other hand, we need to study, predict, and actively respond to emerging situations and problems, balance relationships between different parties, and strive to gain the understanding, support, and participation of all parties actively in order to ensure the steady advance of the reform in line with the defined objectives and tasks.

 Secondly, given the concerns of all segments of society, we need to produce effective results of the reform as soon as possible. The pharmaceutical and healthcare issue is the hotspot of greatest concern. As the reform advances, the focus of all segments of society has shifted from the direction and principles of the reform to its effects and practical policies. All segments of society have acknowledged the concept of the reform of the pharmaceutical and healthcare system and they expect much more from the results of this reform. We have to speed up our pace of reform to fulfill the solemn commitment which the CPC and the central government have made to the public.

 Thirdly, the reform of the pharmaceutical and healthcare system is confronted with pressure from international competition caused by comparison between different countries. Nowadays, many counties have made the reform and improvement of medical and healthcare system a key point in their social reform and development programs, especially in addressing the international financial crisis. This may be helpful for solving social and economic issues accumulated in the long term. Recently, the United States of America launched healthcare reform which has many similarities to our reforms in terms of planning, concepts, and policies. Some other countries such as Australia have also begun to study how to further improve medical and healthcare services system. The reform of the pharmaceutical and healthcare system has become an important element of soft power competition between countries and a major symbol for a country’s credibility and capability for fulfillment. 

 III. Future tasks for the reform of the pharmaceutical and healthcare system

 This year is a crucial year for the reform of the pharmaceutical and healthcare system to ensure smooth transition to the next stage and to tackle difficulties. The central task remains ensuring that all people can access basic medical and healthcare services, improving community medical institutions, and establishing a sound mechanism. We will focus on measures that can benefit the people and produce effective results. We will continuously improve policy measures and advance the five key tasks taking the overall situation into consideration: 1. We will continue to develop the guaranteed medical care system on the basis of ensuring and expanding the current coverage and we will strive to improve greatly the level of guarantee and the level of providing service; 2. We will give top priority to the establishment of the national system for basic drugs; 3. We will improve the community medical and healthcare service system and implement a plan to improve the medical workers in community medical institutions with the focus on training general practitioners; 4. We will make greater efforts to provide basic public healthcare services for more people equally and improve service efficiency; 5. We will advance the pilot reform of public hospitals and improve the service quality and efficiency of public hospitals. The difficult and key points of the reform for this year are tasks in the fields of the system of basic drugs and the reform of public hospitals.

 We need to devote more efforts to improving key links in the development of a national system for basic drugs. The basic drugs system is a new system which involves different links, including production, pricing, bidding, delivery, usage, compensation, and reimbursement, as well as a personnel distribution system and rural doctors. These links must be connected and improved by taking the overall conditions into consideration. The practice over the past year shows that we need to focus on two links in developing the basic drugs system. One is standardizing the mechanism for bidding and purchases, which is a crucial link in lowering drug prices to a rational level. This link has a direct bearing on whether people can enjoy real benefits. The provinces shall be the unit to be responsible for purchasing basic drugs through public bidding. The provinces will unify the delivery, link the quantity with the price, and directly conclude the purchase and sale contracts with enterprises in order to take full advantage of batch-purchasing to lower prices, ensure quality and supply, and strengthen oversight and control. By this means, we can cut the irrational profit chain between community medical institutions and drug production and circulation enterprises, in order to ensure that people can obtain safe and reliable drugs at cheap and rational prices. The second link is setting up a rational and stable mechanism for subsidizing community medical institutions. When basic drugs are to be sold to patients without a markup, how to implement the policy for subsidizing community medical institutions and how to ensure the normal operation of these institutions have a direct bearing on medical workers’ interests. We hereby must adhere to the principle of ensuring sound pay for medical workers and the normal operation of institutions. The shortfall in the funding for ensuring normal operations of the community medical institutions will be addressed through the overall investment plan of the government in these institutions and may be complemented through exploration of the approach of purchasing medical services with medical insurance fund and other means. In any circumstances, the financial departments will undertake the responsibility for ensuring basic funding. We need to explore actively measures for rural doctors and non-public community medical institutions for implementing the basic drug system. Moreover, we need to improve corresponding mechanisms for overseeing and controlling quality, unified delivery, and the preparation and use of basic drugs as well as the reimbursement of medical insurance to ensure that the reform will not stray from its original intention.

 We need to make breakthroughs in the reform of public hospitals. The progress and efficacy of this reform have a direct bearing on the understanding and opinions of all segments of society regarding the reform of the pharmaceutical and healthcare system. In addition, public hospitals have been the accumulation point for various contradictions in the pharmaceutical and healthcare system which formed and accrued over the long term. We must carry out the pilot reform first and then expand the reform carefully. We encourage all localities to make bold experiments and innovations in terms of the content and practical approach of the reform. Taking the current focus of the reform of the pharmaceutical and healthcare system into consideration, we need to work hard in three areas. One area is to set up a mechanism for labor divisions and coordination between public hospitals and community medical institutions so that public hospitals can devote greater efforts to treating major diseases and tackling difficulties and passing on their experience, as well as helping and guiding community medical institutions to improve their service ability. The second area is to improve the internal operation mechanisms of public hospitals whereby their staffs may be motivated and kept within certain bounds in order to improve their internal energy. Public hospitals need to improve the process of making diagnoses and providing treatment, standardizing medical behaviors, shortening waiting times to see doctors, lightening the burden of medical services on patients, strengthening cost accounting and controls, and improving internal management systems to increase operation efficiency and patient satisfaction. The third area is to take advantage of outside driving forces to promote the reform and development of public hospitals. We need to create an external environment for different social forces running medical institutions in order to meet the various demands of patients for medical services. Public hospitals may gradually transfer personalized and high-level medical services to market forces. The government must strengthen oversight and control to ensure standardized development.

(From Qiushi in Chinese, No. 12, 2010)


Note: Author: Director of the Office of the Leading Group for Deepening the Reform of the Pharmaceutical and Healthcare System of the State Council and Deputy Director of the National Development and Reform Commission  

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