Beijing has announced a plan to end markups on drug prices and adjust the cost of 435 medical services in what is being seen as the boldest move yet in improving China’s health care system. Under the plan, from April 8 a medical service fee will replace drug markups, registration and treatment fees. Drug prices were previously marked up by as much as 15 percent, but this will now not be allowed in more than 3,600 hospitals and medical institutions in the capital.
In the meantime, the cost of certain medical services that involve a lot of experience and skill will be increased. These include acupuncture, operations and nursing. However, fees for the use of certain equipment, such as CT and NMR scans, will be reduced.
Prices below cost
Most prices for the 5,300-plus medical services offered at the city’s public hospitals were set in 1999, 75 percent of which have been below cost, said Li Sufang, deputy head of Beijing’s development and reform commission.
Due to poor government funding, public hospitals have relied heavily on markups on drugs, high fees for examinations and sales of materials such as bandages, creating an incentive for doctors to over-prescribe and to recommend unnecessary check-ups. “Separating treatment and drug sales will cut off the channel for making money through over-prescription and help medical practitioners provide more and better treatment,” said Fang Laiying, head of Beijing’s health and family planning commission. To ensure medicine prices drop, Beijing will mandate transparent drug purchases, choosing suppliers through open bidding and requiring the full disclosure of drug and producer information.
Fang said the city consumed 824 million yuan (US$119 million) worth of atorvastatin calcium tablets, a type of lipid-lowering medication, in 2015. Under the plan to bring down the purchase price, 83 million yuan could be saved on just this one drug. According to calculations, Fang said, overall medical costs for Beijing residents will remain balanced and there will be no increased burden on patients.
In addition, Fang said that community hospitals and medical institutions will be given the same access to the medicines that are usually prescribed in high-level hospitals, so that patients will have more choices. The reforms also include adjustments to medical aid for low-income residents. The reimbursement ratio of outpatient services will be raised to 80 percent with a yearly cap of 6,000 yuan from the present 70 percent and 4,000 yuan cap.
Some 80 percent of inpatient service costs, with a yearly cap of 60,000 yuan, will be covered by medical aid. Aid to poor patients with major diseases will also be bumped up to 120,000 yuan a year, or 85 percent of the total medical bill, from the present 80,000 yuan cap and 75 percent. Fang said that the medical reforms will play a vital role in realizing the ambitious national goal of building a “healthy China” and serve as a test for the rest of the country. However, he added that implementation would not be an easy job.