Sanming Healthcare Reform Goes National: Digital Platforms Accelerate Medicine and Healthcare Transformation
“Health is the most important indicator of a happy life.” Recently, General Secretary Xi Jinping visited Shaxian General Hospital in Sanming City to learn about local medical and health system reforms, reiterating the importance of people’s health. He emphasized that during the 14th Five-Year Plan period, we must uphold the principles of putting the people and their lives first, and continue to deepen reforms of the medical and health system.
The Sanming Healthcare Reform has been elevated to a top-level national healthcare reform strategy. As a model for comprehensively deepening healthcare reform, Sanming began in 2012 by tackling inflated prices of pharmaceuticals and medical consumables in the distribution sector as its breakthrough point. It has adhered to the integrated “Three-Medical” reform—linking pharmaceuticals, health insurance, and medical services—introduced digital platforms, and established the “Sanming Alliance” for cross-regional joint procurement with price caps on pharmaceuticals and medical consumables. Meanwhile, it has advanced public hospital reforms in parallel, achieving mutual benefits for hospitals, physicians, patients, and the health insurance fund.
Since 2012, the Sanming healthcare reform has undergone three phases: rectifying the profit-centered model, advancing a disease-treatment-centered approach, and exploring a health-centered paradigm. The reform was initiated by addressing the governance of pharmaceuticals and medical consumables because the multi-tiered markups in their distribution channels led to artificially inflated drug prices, high out-of-pocket costs for patients, and significant financial pressure on the medical insurance system.
In the early stages of its healthcare reform, Sanming, with technical support from the Haixi Pharmaceutical Trading Center, established a transparent online platform for joint price-capped procurement of pharmaceuticals and medical devices. Centered on three core objectives—“lowering drug prices,” “improving efficiency,” and “strengthening regulation”—the platform achieved integration of joint procurement, price negotiation, transaction, settlement, and regulatory oversight for drugs and medical consumables.
Public data from the Sanming Municipal Healthcare Security Administration shows that, based on the provincial median growth rate of 16% for pharmaceutical and medical consumable expenses from 2012 to 2020, the projected cost should have been RMB 20.628 billion, whereas the actual expenditure amounted to RMB 8.225 billion, resulting in relative savings of RMB 12.403 billion. Relative savings in the city’s total healthcare expenditure reached RMB 11.068 billion. As a result, the Haixi Pharmaceutical Trading Center received commendation from the Sanming Medical Reform Leading Group, which recognized its outstanding contributions to facilitating Sanming’s healthcare reforms.
The Haixi Pharmaceutical Trading Center is affiliated with WeDoctor, China’s largest digital healthcare service platform, for which the “Three-Medical Linkage” has always been a core strategy. WeDoctor and Sanming share a common vision: leveraging digital tools to eliminate inefficiencies in pharmaceutical distribution and enhance the utilization efficiency of medical insurance funds.
After achieving tangible results in reducing drug prices through digital platforms, the “Sanming Alliance,” a cross-regional joint procurement platform centered on the Sanming healthcare reform model, was officially established. As China’s only cross-provincial platform for consolidated volume-based negotiation and centralized procurement of pharmaceuticals and medical devices, the Sanming Alliance provides technical support and comprehensive information services for joint procurement, trading, and settlement to its members and partner regions. By enabling dynamic price comparisons across provinces and regions and conducting joint negotiations with pharmaceutical companies, the alliance eliminates inflated prices for drugs and consumables, ultimately passing on the benefits of lower costs to medical institutions and the public in the 16 provinces and autonomous regions under its jurisdiction.
Since the establishment of the National Healthcare Security Administration, and drawing on the experience of Sanming, China has launched the “4+7” centralized volume-based procurement of pharmaceuticals and medical consumables. This initiative has delivered tangible benefits to the public through “volume-based price negotiation,” attracting widespread attention across society. In 2019, the Leading Group for Deepening Medical and Health System Reform under the State Council issued the Notice on Further Promoting the Experience of Fujian Province and Sanming City in Deepening Medical and Health System Reform, requiring all regions to learn from Sanming’s reform pathways and practices.
Building on the foundation of data interconnectivity, digital technologies such as big data collection and analysis have enabled transparent procurement and end-to-end oversight of pharmaceuticals, medical consumables, and medical devices. The first volume-based procurement order under the “4+7” pilot program was issued in Xiamen City, Fujian Province. The Haixi Pharmaceutical Trading Platform also undertook the construction and operation of Xiamen’s “National Centralized Drug Procurement and Usage Supervision Platform,” providing integrated services for procurement, transaction, and settlement of drugs selected through the “4+7” initiative, thereby safeguarding the implementation of the pilot program.
During his inspection in Sanming, the General Secretary emphasized the need to continue deepening healthcare and pharmaceutical system reforms, increase medical resources, and optimize regional urban-rural distribution, so that major illnesses can be treated within the province, common diseases can be managed at the municipal and county levels, and everyday ailments can be addressed at the primary care level, thereby providing reliable safeguards for the people’s health.
During the pandemic, to rapidly establish an “airborne barrier,” the Sanming Municipal Health Commission approved the establishment of the Sanming WeDoctor Internet Hospital, the city’s first internet hospital. Currently, more than 1,100 physicians in the city have registered and come online, with doctors from all county-level public hospitals participating. Nearly 12,000 health consultations have been conducted, and an online convenient outpatient service has been launched to meet the medical consultation and medication purchase needs of some residents.
“Healthy China 2030” first proposed the goal of shifting from a “disease-treatment-centered” approach to a “health-centered” one. Currently, the Sanming healthcare reform is in the third phase of this transition, focusing on advancing the development of close-knit medical consortia, reforming health insurance payment methods, and implementing alliance-based procurement mechanisms for pharmaceuticals and medical consumables.
As a robust measure to further deepen the “Three-Medical Linkage” reform, Sanming Information Industry Development Co., Ltd. and WeDoctor have jointly established two joint ventures: Sanming Sanyi Lian Digital Technology Co., Ltd. and Sanming WeDoctor Internet Hospital Co., Ltd. These entities will fully leverage the pivotal role of big data, the internet, and cloud computing in the “Grand Health and Grand Hygiene” framework, thereby supporting the development of the Digital Sanming and Healthy Sanming systems and promoting the nationwide replication and dissemination of Sanming’s healthcare reform experience.
Healthcare reform practices cannot be achieved without the support of digital platforms, and the exploration of a Chinese-style accountable care system is even more dependent on the empowerment of digital tools. Starting from Sanming, digital platforms represented by WeDoctor and Haixi are leveraging innovative models such as internet hospitals and digital health communities to drive the digital upgrading of healthcare systems at the level of medical insurance pooling areas. These efforts help alleviate pressure on large hospitals, enhance the capabilities of primary care institutions, improve the efficiency of medical insurance fund utilization, reduce the pharmaceutical burden on the public, and enable more people to benefit from the dividends of healthcare reform.