Developing a System of Public Hospitals with Chinese Characteristics

From: English Edition of Qiushi Journal Updated: 2011-09-20 15:58
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 A system of public hospitals is the approach adopted by many countries for ensuring and improving the health of its citizens, and the People’s Republic of China established its public hospital system soon after it was founded. The Decision of the CPC Central Committee on a Number of Important Issues Concerning Developing a Harmonious Socialist Society and Opinions of the CPC Central Committee and the State Council on Deepening Reform of the Pharmaceutical Health Care System (hereinafter referred to as the “Opinions”), formulated to address issues in this new historical period, called for preserving the public welfare nature of public medical institutions and strengthening public service function of public hospitals. In February 2010, the Ministry of Health along with four other government departments introduced the Guidelines for Trial Reform of Public Hospitals (hereinafter referred to as the “Guidelines”), marking the beginning of the trial reform of public hospitals and the launch of efforts to develop a system of public hospitals with Chinese characteristics that maintains the public welfare nature of hospitals under socialist market economic conditions.

 I. The decision to develop a system of public hospitals is a historic choice that meets the requirements for developing the health system and is in line with the conditions in China

 The CPC and the Chinese government have always attached great importance to development of the health care system. Public hospitals are established by the government to meet the basic needs of the public for medical services, and their establishment is a direct way for the Party and government to protect the rights and interests of the people concerning health care.

 The ultimate objective of a good medical care system should be to safeguard people’s health, and the system should be designed to be fair and widely available and be effective for the overwhelming majority of the public. Public hospitals represent the most direct approach to ensuring that the medical care system is fair and widely accessible. There is a big gap between urban and rural areas and between different regions in China in terms of economic and social development so the only way to build a network of medical service institutions that covers the people in all areas is to retain non-profit medical organizations as the mainstay of the system supplemented by commercial medical organizations, and to allow development of non-public medical organizations while the leading position of the public medical institutions is maintained. Through unified administration of all urban and rural hospitals at all levels and of different specialties, the system of public hospitals ensures good coordination among medical institutions and continuity of medical service. Tasks assigned to the system by the government include providing education and research, medical care for victims of disasters, foreign aid and sending medical personnel to support the medical system of border regions and rural areas. This work contributes to raising the overall level of fitness of the people. The advantages of the system of public hospitals have also been fully borne out by international experience. The absolute majority of the countries in the world have established a certain number of public hospitals. Even in the United States, where the market economy is the most developed, one-fifth of the medical institutions are public.

 The advantages of the system of public hospitals can only be fully exploited if the system is strictly designed and developed through trial and error. Experience has shown that building a medical and health care system with Chinese characteristics was a historic choice. China’s basic situation is a country that will remain in the primary stage of socialism for a long time to come. We must follow the inherent laws governing development of health care and always view social benefit as the number one criterion in assessing development. It has always been the responsibility of the Party and the central government to protect and improve the health of the people. We should cherish and conscientiously apply the lessons we have learned over our 60-plus years of experience in developing health care work since the founding of New China and carry forward these precious treasures from health care work since the founding of New China.

 II. The top-level design of the trial reform of public hospitals is comprehensive

 We included a top-level design for the trial reform of public hospitals in the “Guidelines” that can be summed up as “one objective, three areas and nine tasks.” The design was formulated to conform with the guidelines and demands set out in the “Opinions” and the Plan for Carrying Out the Key Tasks in the Reform of the Pharmaceutical Health Care System in the Near Term (2009-2011) of the State Council and was finalized through extensive soliciting of opinions, full communication and coordination with concerned parties, and repeated revision and improvement.

 The “one objective” is to safeguard the public welfare nature of public hospitals, motivate the enthusiasm of medical personnel and call on public hospitals to conscientiously perform their public service function by providing the people with safe, effective, convenient and reasonably priced medical care and reducing the high cost and difficulty of obtaining medical care so that ordinary people have access to good health care.

 The “three areas” include, first of all, improvement of the system to develop a system of public hospitals that has a clear public welfare nature, has a full range of functions, is optimally structured, has clear-cut administrative levels, is reasonably distributed and is appropriate in scale. The second area is to make institutional and mechanical innovations to form a scientific and standardized management system, governance mechanism, compensation mechanism, operation mechanism and regulatory mechanism for public hospitals. The third is to improve the management of individual hospitals and improve the performance of public hospitals to strengthen safety guarantees, enhance quality, make costs more reasonable, increase efficiency and improve service.

  Trial reforms of public hospitals began in 16 state-designated cities and 31 province-designated cities in 2011. Since the launch of reforms, positive progress has been made in regional health planning and the provision of support from major public hospitals to rural areas and remote regions. These initiatives are expected to gradually address the problem of inadequate access to medical services. / Photo supplied by Xinhua

  “The nine tasks” are to improve the service system of public hospitals, reform the management system of public hospitals, reform the corporate governance mechanism of public hospitals, reform the operating mechanism of individual public hospitals, reform the compensation mechanism of public hospitals, improve the management of public hospitals, reform the regulatory mechanism for public hospitals, and develop a standardized training system for resident doctors and accelerate the development of a medical care system with the participation of public and non-public sectors.

 III. Progress is being made in the trial reform of public hospitals 

 It has now been nearly a year since the start of the trial reform of public hospitals. We have made initial progress in pooling the efforts of the central and local governments and concerned government departments and hospitals as we carry out both general and specific reforms. The cities participating in the trial reform are working to improve the accessibility, affordability and effectiveness of medical care and first addressing tasks that are relatively easy to accomplish, yield quick results and are subject to less environmental constraints. They have already seen initial results and accumulated a certain amount of experience.

 1. The reform is working to improve the system of medical services to ensure that people have access to good medical care. The overall supply of medical treatment resources, especially high quality resources, is inadequate and the distribution of those resources among regions and localities and between urban and rural areas is uneven. In addition, there is inadequate access to community-based and rural medical services. These are the main reasons why people are having difficulty getting adequate medical care. To solve this problem we must strengthen overall regulation of health care resources to promote greater development of service systems in areas with poor access to health care and promote development of a multi-level health care system. The cities participating in the trial reform have improved the planning and distribution of their public hospitals. One, along with development of new urban areas, they built new hospitals and expanded existing ones, demolished and relocated or upgraded hospitals in poor conditions, reorganized resources and set up branch hospitals or jointly operated hospitals to extend high quality health care resources to new urban areas and outlying county areas. Two, they organized medical groups to share resources and promote the free flow of personnel and established a mechanism for sharing information. Three, they set up an interactive mechanism for dividing and coordinating work between public hospitals and community health clinics to allow resources to flow between large hospitals and community health clinics. Four, they began building systems of county-area clinic services led by county hospitals.

 2. Government spending is being increased, the way that payments from basic medical insurance systems are made for medical services is being reformed and the actions of hospitals are being standardized to ensure that people can afford medical care. Problems in the basic medical insurance systems, the high proportion of medical expenditures that must be paid by the patient and the desire of hospitals to make a profit are all important factors contributing to the high cost of medical care. The government has been using a combination of means to standardize the diagnosis and treatment of hospitals and health clinics in recent years to address these problems and put in place a permanent and effective mechanism for controlling hospital costs. One was to increase government spending and improve the compensation mechanism. Two was to reform the way that payments from basic medical insurance systems are made. First, the way insurance funds settle claims was improved to make it more convenient for patients, and the financial burden on patients was reduced through a combination of basic medical insurance plus commercial insurance and government assistance for major illnesses. Second, excessive increase in hospital charges was controlled by instituting payment according to the type of illness, payment according to the number of people and prepayment of a fixed amount. 

 3. Personnel training was improved, medical personnel were encouraged to be more diligent and medical services were improved to ensure people can receive proper medical attention. One was to improve personnel training to raise the overall quality of personnel of medical institutions through standardized training of resident doctors and general practitioners and support arrangements between urban and rural areas. Two was to reform the operating mechanism of hospitals, make the internal mechanism of hospitals more dynamic and strongly encourage medical personnel to be more diligent. First, we reformed the personnel distribution system to implement a new mechanism for personnel management that allows hospitals independence in employing personnel, allows them to create positions as needed, requires that all personnel sign employment contracts and allows hospitals to make hiring and firing decisions. In addition, hospitals implemented a wage system based on post and performance and eliminated the system of linking remuneration with income brought in so that personnel make “more pay for more work and for better work.” Second, we instituted restrictions and regulation for the operation of public hospitals. Three was to reform the management of hospital services by promoting in an all round way the practice of diagnosis and treatment by appointment, third party mediation of disputes between medical institutions and patients and handling of complaints.

 4. Some cities participating in the trial reform have begun looking for ways to address some major institutional and mechanical problems. There are mainly four models for reform of the management system. Anshan, Qitaihe, Wuhu, Weifang, Ezhou, Zhuzhou and Zunyi have set up municipal government bodies to manage public hospitals and administrative bodies under public health departments. Luoyang and Beijing have set up bodies to manage public hospitals administered by their bureaus of public health to manage the personnel, finances and supplies and equipment of hospitals. Zhenjiang and Baoji directly entrust their public health administration departments with the contributor’s responsibilities. Ma’anshan and Kunming have set up bodies independent of their public health administration departments as agencies in charge of managing public hospitals for the government and managing state assets under their control. Some localities have been carrying out reform of the governance mechanism of public hospitals by developing a corporate governance structure for public hospitals featuring a board of directors, functional departments and a board of supervisors to provide checks and balances as well as formulating required qualifications for hospital directors while improving the assessment and management of the performance of hospital directors.

 IV. An approach has been defined for reform of public hospitals under the current situation

 During the Twelfth Five-Year Plan period, the main objectives for the reform of public hospitals are to improve the planning for and distribution of public hospitals, improve the county-level medical health care service system, improve the system for making payments from basic medical insurance systems by making them subject to a unified set of standards, set up a standardized training regime for resident doctors, improve hospital services to make them more “patient-oriented” and launch an extensive reform of hospital services mainly focusing on diagnosis and treatment by appointment, holistic care and clinical pathways. In addition, the reform is designed to develop a unified and highly efficient system for overseeing and regulating hospital operation, taking advantage of the role of local governments in managing the local medical industry, turn over management to local governments across the industry, improve the operating performance of hospitals and initiate appraisal of public hospitals based on quality of medical care and safety of patients and progress in improving the degree of patient satisfaction. 

 Based on the experiences of the participating cities and in accordance with the requirements for consensus, ripe conditions, feasibility and effectiveness of implementation, we have provisionally identified the following initiatives as priorities for nationwide implementation. 

 The first task is to optimize the structure and distribution of public hospitals. We need to improve the regional public health plan and regional distribution plan for medical institutions. We also need to optimize the structure and distribution of public hospitals, strengthen government support for the construction and development of county level hospitals, set up regional medical centers and improve the technological level and level of service of medical institutions and their personnel.

 The second is to speed up establishment of an interactive mechanism for dividing and coordinating work between public hospitals and community health clinics. We need to establish a permanent, stable and institutionalized mechanism for dividing and coordinating work based on the inherent interests of the hospitals and community clinics that is interactive to gradually develop a system in which initial diagnosis is made at the community level, treatment is carried out by different levels of medical institutions and patients may be transferred up or down in the system as appropriate. 

 The third is to give priority to developing county level hospitals. Devoting great efforts to the development of county-level medical institutions is an effective way to balance development of urban and rural medical institutions and the decision to do so represents a new breakthrough in both the theory and practice for the Party’s rural health care work in this new period. The Ministry of Health has consistently focused efforts on building county-level hospitals since 2004 to address the problem of the inadequate access and high cost of medical care, striving to reach the goal of at least one Grade B or better hospital in every county within two years by increasing government support, building and equipping more facilities, and strengthening support from stronger areas for weaker areas.

 The fourth task is to reform the way that payments from basic medical insurance systems are made for medical services and the way hospitals collect fees. We need to gradually realize direct settlement of bills at the hospitals and other places on the basis of a system of one card for all medical expenses. We need to reform the way that payments from basic medical insurance systems are made for medical expenses to promote formation of an internal mechanism in hospitals for controlling expenditures. In addition, the level of reimbursement of basic medical insurance systems for medical expenses needs to be raised.

 The fifth is to reform the operating mechanism of public hospitals and improve their internal management to strengthen their performance. We need to make hospital management more scientific and delicate, focusing first on clinical pathway, tap the hospitals’ internal potential for improvement and ensure that the treatment is suitable for the illness. In addition, we need to improve hospital services to ensure quality medical care and diagnosis and treatment by appointment.

 The sixth is to improve the incentive mechanism for medical personnel to encourage them to be more diligent. We need to increase government spending for the training of medical personnel and regulate medical costs to keep them reasonable. A third party mediation mechanism is needed to settle disputes between medical staff and patients, and insurance needs to be developed to cover accidental death or injury related to medical treatment in order to ensure harmonious relations between medical personnel and patients. We need to strengthen publicity efforts to guide formation of a social atmosphere of respect for medical science and medical personnel.

 The seventh task is to standardize training of resident doctors. We need to develop a network of training bases to provide standardized training for resident doctors in order to turn out large numbers of qualified personnel needed to staff medical institutions at all levels.

 The eighth is to expand the application of IT and the use of remote medical treatment in hospitals. We need to develop a hospital information network mainly for storing electronic medical records and hospital management to promote more scientific and delicate hospital management and improve and upgrade services in community hospitals.

(Originally appeared in Qiushi Journal, Chinese edition, No.24, 2010)

Note: Author: Vice Minister of the Ministry of Health of the People’s Republic of China

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