China Sets 10-Year Vision for Multi-Layered Healthcare Security System with Basic Insurance as Core and Commercial Health Insurance, Mutual Aid Programs in Support

Recently, the Central Committee of the Communist Party of China and the State Council issued the “Opinions on Deepening the Reform of the Healthcare Security System.” Building upon the established universal basic healthcare security system, the “Opinions” set forth targets for two key milestones:

The “Opinions” also point out the need to improve the cost-assurance mechanism for medical treatment during major epidemics. In emergencies such as sudden outbreaks, ensure that medical institutions provide treatment first and charge fees later. Improve the health insurance payment policies for medical treatment during major epidemics, refine the system for direct settlement of cross-regional medical expenses, and ensure that patients are not deterred from seeking medical care due to financial concerns.

It is reported that during the COVID-19 pandemic, a policy combining medical insurance reimbursement with fiscal subsidies was implemented to cover treatment costs, thereby effectively addressing patients' financial burdens for medical care.

Healthcare security is a major institutional arrangement designed to alleviate the financial burden of medical care on the public, enhance people’s well-being, and maintain social harmony and stability. The Central Committee of the Communist Party of China and the State Council attach great importance to the health of the people and have established a basic healthcare security system covering the entire population. Since the 18th National Congress of the Communist Party of China, reforms of the universal healthcare security system have been continuously advanced, achieving breakthrough progress in addressing the difficulties and high costs associated with accessing medical care. To thoroughly implement the decisions and deployments of the 19th National Congress of the Communist Party of China on comprehensively establishing a healthcare security system with Chinese characteristics, and to focus on resolving the issues of unbalanced and inadequate development in healthcare security, the following opinions are hereby proposed on deepening the reform of the healthcare security system.

(I) Guiding Principles. Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we shall fully implement the spirit of the 19th National Congress of the Communist Party of China and its Second, Third, and Fourth Plenary Sessions. Adhering to a people-centered approach to health, we will accelerate the establishment of a multi-tiered medical security system that provides universal coverage, integrates urban and rural areas, features clear rights and responsibilities, offers appropriate levels of protection, and ensures sustainability. By unifying systems, refining policies, improving mechanisms, and enhancing services, we will strengthen the equity and coordination of medical security, leverage the strategic purchasing role of medical insurance funds, promote high-quality coordinated development of medical security and pharmaceutical services, advance the implementation of the Healthy China strategy, and enhance the people’s sense of gain, happiness, and security.

(II) Basic Principles. Adhere to the principle of providing universal coverage and ensuring basic needs, legally extending basic medical insurance coverage to all citizens, doing what is feasible within available resources, and determining the scope and standards of coverage based on practical considerations. Uphold steady and sustainable development while preventing risks, scientifically determine funding levels, balance contribution responsibilities among all parties, strengthen pooled risk-sharing, and ensure the long-term sustainability of the fund. Promote equity and establish a strong safety net, reinforce institutional fairness, gradually narrow disparities in benefits, and enhance foundational and bottom-line protection for impoverished populations. Pursue governance innovation and improve quality and efficiency, leverage the decisive role of the market, better fulfill government functions, and advance the socialization, rule-of-law orientation, standardization, and intelligent management of medical insurance governance. Emphasize systematic integration and coordinated efficiency, enhance the holistic, systematic, and synergistic nature of coordinated reforms in medical insurance, healthcare delivery, and pharmaceuticals, and ensure that the public has access to high-quality, efficient, and affordable medical and pharmaceutical services.

(III) Goals for Reform and Development.By 2025, the healthcare security system has become more mature and well-defined, with the basic completion of key mechanisms such as benefit coverage, financing and operation, medical insurance payment, and fund supervision.Reform Tasks in Key Areas Such as the Supply of Pharmaceutical and Medical Services and Health Insurance Management Services。By 2030, fully establishing a system with basic medical insurance as the mainstay and medical assistance as the safety net,Supplementary Medical Insurance, Commercial Health Insurance, Charitable Donations, and Medical Mutual Aid Develop in Concerta medical security system and framework featuring fair and moderate benefit coverage, stable and sustainable fund operations, optimized and convenient management services, and significantly enhanced modernization of healthcare security governance, thereby achieving the goal of better ensuring access to medical care for all who need it.

Equitable and Moderate Benefit Coverage Is an Intrinsic Requirement for Enhancing the Health and Well-being of the Population. It is essential to advance the statutory medical security system toward greater maturity and stability, improve the medical insurance and assistance mechanisms for catastrophic illnesses, coordinate high-quality development across various types of medical security programs, and steadily raise the level of medical security in line with economic development and the financial sustainability of insurance funds.

(4) Improve the basic medical insurance system. Adhere to and improve the basic medical insurance system and policy framework that provides universal coverage and mandates participation in accordance with the law; implement classified coverage for employees and urban and rural residents, link benefits to contributions, and establish separate accounts and conduct separate accounting for funds. Unify the pooling levels and medical insurance catalogs of basic medical insurance, and standardize the methods for determining medical insurance payment policies.Gradually include outpatient medical expenses within the scope of coverage by the basic medical insurance pooled fund, reform the individual accounts of employee basic medical insurance, and establish a sound mechanism for mutual aid in outpatient care.

(5) Implement a list-based system for medical security benefits. Establish and improve the list-based system for medical security benefits, standardize governmental decision-making authority, scientifically define basic systems, basic policies, items covered by fund payments, and payment standards, thereby promoting the statutory establishment of the medical security system, scientific decision-making, and standardized management. All regions must ensure the smooth implementation of national policies and are prohibited from issuing policies that exceed the scope authorized by the list without prior approval. Strictly enforce the basic scope and standards of payment, implement fair and appropriate coverage, and rectify issues of both over-insurance and under-insurance.

(6) Improve the unified and standardized medical assistance system. Establish a mechanism for the timely and precise identification of assistance recipients, and scientifically determine the scope of assistance. Fully implement policies subsidizing insurance premiums for key assistance recipients, and improve the medical expense assistance mechanism for these groups. Establish a long-term mechanism to prevent and alleviate poverty caused by illness. Strengthen the safety-net function of medical assistance, reduce medical costs through measures such as clarifying treatment plans and standardizing referrals, increase annual caps on medical assistance, and reasonably control the proportion of out-of-pocket expenses within the policy scope for impoverished populations.

(7) Improve the financial protection mechanism for medical treatment during major epidemics.During public health emergencies such as sudden outbreaks, ensure that medical institutions provide treatment first and charge fees later.Strengthen the medical insurance payment policies for medical treatment during major epidemics, improve the system for direct settlement of cross-regional medical expenses, and ensure that patients are not deterred from seeking medical care due to financial concerns.Explore the establishment of a medical expense waiver system for special groups and specific diseases, with targeted exemptions from restrictive provisions such as the national reimbursement drug list, payment caps, and medication dosage limits, thereby alleviating the financial concerns of disadvantaged populations in accessing medical care. Coordinate the use of medical security funds and public health service funds, increase the reimbursement rate for primary healthcare institutions, and achieve effective integration between public health services and medical services.

(8) Promote the development of a multi-tiered medical security system. Strengthen the triple safety net of basic medical insurance, critical illness insurance, and medical assistance; foster complementary integration among various forms of medical security; and enhance coverage for catastrophic illnesses and diverse healthcare needs. Improve and standardize resident critical illness insurance, employee subsidies for high medical expenses, civil servant medical subsidies, and enterprise supplementary medical insurance.Accelerate the development of commercial health insurance, diversify the supply of health insurance products, fully leverage the individual income tax policies for commercial health insurance, and study the expansion of the scope of insurance products.Strengthen oversight of market conduct, with a focus on regulating key aspects of health insurance product design, sales, and claims settlement, so as to enhance the capacity for delivering health protection services. Encourage charitable donations from society, coordinate and mobilize charitable medical assistance resources, and support the orderly development of mutual medical aid.Exploring the Reimbursement Mechanism for Orphan Drugs.

Rational fundraising and prudent operation are the fundamental guarantees for the sustainability of the medical security system. It is essential to establish a financing mechanism that aligns with the basic national conditions of the primary stage of socialism, matches the affordability of all stakeholders, and coordinates with basic health needs. We must earnestly strengthen fund operation management, enhance risk early warning systems, and firmly uphold the bottom line of preventing systemic risks.

(9) Improve the cost-sharing and adjustment mechanism for funding. Employed individuals participating in basic medical insurance shall have premiums jointly contributed by their employers and themselves. Non-employed individuals participating in basic medical insurance shall pay premiums individually, with government subsidies provided in accordance with regulations; premium levels shall be linked to the level of economic and social development and per capita disposable income of residents. To adapt to the development of new business formats, improve the methods for flexible workers to enroll in and pay for basic medical insurance. Establish a benchmark premium rate system for basic medical insurance, standardize policies on the contribution base, determine premium rates reasonably, and implement dynamic adjustments. Balance the funding responsibilities among individuals, employers, and the government, optimize the structure of individual contributions and government subsidies, and study multi-channel funding policies to address the medical burden associated with population aging. Strengthen fiscal investment in medical assistance and broaden the funding channels for medical assistance.

(10)Consolidate and raise the level of pooling.Fully implement city-prefecture-level pooling of basic medical insurance in accordance with the standards of unified institutional policies, consolidated collection and disbursement of funds, and integrated management services. Explore and advance the vertical management of healthcare security departments below the city-prefecture level.Encourage provinces (autonomous regions, and municipalities directly under the Central Government) with the necessary conditions to advance provincial-level pooling in accordance with the principles of tiered management, shared responsibility, coordinated adjustment, and budgetary performance assessment.Strengthen the management of medical assistance funds, promote coordination between the pooling levels of medical assistance and basic medical insurance, improve the efficiency of fund utilization, and maximize benefits for impoverished populations.

(11) Strengthen fund budget management and risk early warning. Scientifically prepare the budget for medical security fund revenues and expenditures, strengthen supervision over budget execution, and fully implement performance-based budget management.To meet the needs of direct settlement for cross-regional medical treatment, the development of “Internet + Healthcare,” and the evolving service models of medical institutions, explore the implementation of pilot programs for cross-regional fund budgeting.Strengthen medium- and long-term actuarial assessments of the fund, establish a mechanism for balancing revenue and expenditure, and improve risk assessment and early warning systems for fund operations.

Medical insurance payment is a key mechanism for ensuring public access to high-quality medical and pharmaceutical services and improving the efficiency of fund utilization. Efforts should focus on clinical needs, rational diagnosis and treatment, and appropriate technologies, while improving the management of the medical insurance catalog, agreements, and settlement processes. By implementing more efficient medical insurance payment methods, we can better safeguard the rights and interests of insured individuals and enhance the incentive and constraint effects of medical insurance on the medical and pharmaceutical service sector.

(12) Improve the dynamic adjustment mechanism for the medical insurance catalog. Based on the fund’s affordability, and in response to the public’s basic medical needs and advances in clinical technology, adjust and optimize the medical insurance catalog by including drugs, diagnostic and treatment items, and medical consumables with high clinical value and favorable cost-effectiveness evaluations in the scope of medical insurance payment, and standardize the coverage of medical service facilities. Strengthen the dynamic adjustment mechanism for the medical insurance catalog and improve the system for market access negotiations.Reasonably delineate the responsibilities and authority of the central and local governments in adjusting the drug catalog. Regions are not permitted to independently formulate catalogs or adjust the scope of limited reimbursement for medical insurance drugs, with the aim of gradually achieving basic nationwide uniformity in the scope of medical insurance drug coverage.Establish evaluation rules and an indicator system for medical insurance-covered drugs, diagnosis and treatment items, and medical consumables, and improve the exit mechanism.

(13) Innovate the management of medical insurance agreements. Improve the agreement-based management of basic medical insurance, and streamline and optimize the procedures for application, professional assessment, and negotiation for designated status of medical institutions and pharmaceutical providers. Include eligible medical institutions and pharmaceutical providers within the scope of medical insurance agreement management, and support the development of new service models such as “Internet + Healthcare.” Establish and improve mechanisms for managing cross-regional healthcare service agreements. Formulate assessment methods for designated medical institutions and pharmaceutical providers to evaluate their compliance with agreements, emphasizing behavioral standards, service quality, and cost control, and refine the exit mechanism for designated medical institutions and pharmaceutical providers.

(14) Continuously advance the reform of healthcare insurance payment methods. Improve the overall budget management system for healthcare insurance funds, establish a sound negotiation mechanism between healthcare security agencies and medical institutions, promote collective bargaining among medical institutions, scientifically formulate overall budgets, and link them to medical quality and performance assessment results related to agreement compliance.Vigorously promote the application of big data, implement a diversified and composite medical insurance payment system primarily based on diagnosis-related group (DRG) payments, expand DRG-based reimbursement, adopt per-diem payments for long-term hospitalizations such as medical rehabilitation and chronic mental disorders, and implement capitation-based payments for special chronic diseases in outpatient settings.Explore the separation of payments for medical services and pharmaceuticals. Adapt to innovations in the development of healthcare service models, and improve the payment methods and settlement management mechanisms for health insurance funds. Explore the implementation of global budgeting for closely integrated medical consortia, strengthen supervision and performance assessment, allow retained surpluses, and share reasonable deficits. In regions with appropriate conditions, partial health insurance funds may be prepaid to medical institutions as agreed upon in contracts, thereby alleviating their operational financial pressures.

The healthcare security fund is the "life-saving money" of the people, and safeguarding its security must always be the top priority. It is essential to strengthen the institutional framework for supervising the healthcare security fund, advance reforms of the regulatory system, establish a sound credit management system for healthcare security, and crack down on fraud and deception with zero tolerance, thereby ensuring the safe, efficient, and rational use of the fund.

(15) Reform and improve the regulatory system for medical insurance funds. Strengthen the capacity for medical insurance fund supervision, further improve the regulatory systems and mechanisms, and effectively safeguard fund security and enhance fund utilization efficiency. Strengthen the construction of internal control mechanisms within public medical security service institutions, and implement responsibilities for agreement management, expense monitoring, and audit inspections. Implement cross-departmental collaborative supervision, actively introduce third-party regulatory forces, and strengthen social oversight.

(16) Improve the regulatory methods for innovation funds. Establish a normalized mechanism for supervision and inspection, and implement real-time dynamic intelligent monitoring using big data. Enhance the monitoring mechanism for medical services, establish a mandatory information disclosure system, and publicly release information on medical expenses and cost structures to society in accordance with laws and regulations. Implement performance management throughout the entire process of fund operation and establish a performance evaluation system for medical insurance funds. Improve the social supervision and incentive mechanism for medical security, and refine the reward system for reporting fraud and deception involving medical insurance funds.

(17) Hold entities and individuals accountable for fraud and deception involving medical insurance funds in accordance with the law. Formulate and improve laws and regulations governing the supervision of medical insurance funds, standardize supervisory authority, procedures, and penalty standards, and promote rule-of-law-based and lawful administration. Establish a credit system for medical security, implementing joint incentives for trustworthy behavior and joint penalties for untrustworthy conduct. Strengthen interdepartmental joint law enforcement, comprehensively employ contractual, administrative, and judicial measures, strictly hold accountable units and individuals engaged in fraudulent or deceptive practices related to medical insurance, pursue criminal liability in accordance with the law for acts suspected of constituting crimes, and resolutely crack down on fraud and deception that undermine the rights and interests of insured persons.

The supply of medical and pharmaceutical services is vital to public health and the effective functioning of healthcare security. It is essential to fully leverage the leading role of centralized volume-based procurement of drugs and medical consumables in deepening supply-side reforms of medical and pharmaceutical services, advance the integrated systemic reform of healthcare insurance, medical care, and pharmaceuticals, strengthen policy and management coordination, and ensure that the public has access to high-quality and affordable medical and pharmaceutical services.

(18) Deepen the reform of the centralized volume-based procurement system for pharmaceuticals and medical consumables.Adhere to the integration of tendering and procurement, link volume with price, and fully implement centralized volume-based procurement for pharmaceuticals and medical consumables. Based on medical insurance payment, establish a provincial-level tendering and procurement platform that integrates bidding, procurement, trading, settlement, and supervision., advance the establishment of regional and national alliance-based procurement mechanisms to form a supply guarantee system characterized by full competition, reasonable pricing, and standardized, orderly operations. Promote direct settlement between medical insurance funds and pharmaceutical enterprises, and improve the coordination mechanism between medical insurance payment standards and centralized procurement prices.

(19) Improve the price formation mechanism for pharmaceutical and medical services. Establish a market-led price formation mechanism for drugs and medical consumables, and create a national information-sharing mechanism for transaction prices. Address artificially inflated prices of drugs and high-value medical consumables. Improve the access system for medical service items, accelerate the review of new medical service pricing items, establish a mechanism for scientifically determined and dynamically adjusted prices, and continuously optimize the structure of medical service prices. Establish mechanisms for monitoring and disclosing pharmaceutical price information and industry development indices, implement a credit evaluation system for drug pricing and centralized procurement, and improve systems for price inquiries and interviews.

(20) Enhance the accessibility of pharmaceutical and medical services. Establish a modern medical service system characterized by collaborative division of labor between general practice and specialized care, and strengthen primary-level general practice services. Strengthen regional assessments of medical service capacity, rationally plan the allocation of various medical resources, promote resource sharing and utilization, accelerate the development of privately run medical institutions, and regulate the development of new service models such as “Internet + Healthcare.” Improve the management of medical equipment configuration in regional public hospitals, guide rational allocation, and strictly control excessive and oversized procurement. Address shortages in critical medical services, including nursing, pediatrics, geriatrics, and psychiatry. Conduct acceptance and review for the quality and efficacy consistency evaluation of generic drugs, support the research, development, and use of high-quality generics by improving medical insurance payment standards and drug bidding and procurement mechanisms, and promote the substitution of brand-name drugs with generics. Establish a sound system for monitoring, early warning, and graded response to drug shortages.

(21) Promote the enhancement of medical service capabilities. Standardize the diagnostic and treatment practices of medical institutions and healthcare professionals, implement a prescription review system, and promote rational drug use. Strengthen specialized and refined internal management within medical institutions, improve scientific and reasonable evaluation systems by category, and link evaluation results to payments from the medical insurance fund. Reform the current accounting methods for departments and individuals, improve personnel and compensation systems that are incentive-compatible, flexible, efficient, and suited to the characteristics of the healthcare industry, and establish sound performance-based assessment and distribution mechanisms.

Public management and services for medical security are closely tied to the vital interests of hundreds of millions of people. It is essential to improve the administration and public service system, deliver more precise and refined services, enhance informatization capabilities, promote innovation in healthcare security governance, and provide the public with convenient and efficient medical security services.

(22) Optimize public services for medical security. Promote the standardization and normalization of public services for medical security, and achieve one-stop service, single-window processing, and unified bill settlement for medical security. Adapt to the needs of population mobility, ensure insurance enrollment and cross-regional transfer and continuation of medical insurance relations for all groups, and accelerate the improvement of direct settlement services for medical treatment in different places. Deepen the construction of work style in the medical security system, establish a unified medical security service hotline, accelerate the online handling of service items, and improve operational efficiency and service quality.

(23) Promote the development of standardization and informatization from a high starting point.Unify business and technical standards for medical security, establish a nationwide unified, efficient, compatible, convenient, and secure medical security information system, achieve interconnectivity of medical security information across China, and strengthen orderly data sharing.Standardize data management and application access permissions, and protect the basic information and data security of insured persons in accordance with the law. Strengthen big data development, highlight application orientation, enhance service support capabilities, and promote equitable and accessible public medical insurance services.

(24) Strengthening operational capacity building. Establish a nationally unified healthcare security administration and management system, vigorously promote the decentralization of services, and achieve full coverage at the provincial, municipal, county, township (subdistrict), and village (community) levels. Strengthen the development of operational service teams to build a professional workforce aligned with the public service requirements of healthcare security in the new era. Enhance the allocation of resources for healthcare security public management and services, and establish incentive and constraint mechanisms linked to management and service performance. The government shall reasonably arrange budgets to ensure the normal operation of healthcare security public service institutions.

(25) Continuously advance innovation in healthcare security governance.Promote corporate governance of medical security handling agencies, actively introduce social forces to participate in handling services, and explore the establishment of a medical security governance pattern featuring joint construction, collaborative governance, and shared benefits.Standardize and strengthen cooperation with commercial insurance institutions and social organizations, and improve incentive and constraint mechanisms. Explore the establishment of cross-regional collaborative mechanisms for medical insurance management to achieve full-process, seamless public services and fund supervision. Better leverage the decision-making support and technical assistance roles of high-end think tanks and professional institutions.

(26) Strengthening the Party’s Leadership. Party committees and governments at all levels shall regard the reform of the medical security system as a key task, and ensure that the Party’s leadership is integrated throughout the entire process of reform and development in medical security. In strict accordance with unified deployments, they shall improve working mechanisms and formulate practical and feasible policies and measures tailored to local conditions. The implementation of medical security system reforms shall be incorporated into the priority tasks for safeguarding and improving people’s livelihoods, ensuring that the reform objectives are achieved as scheduled.

(27) Strengthening Coordination and Collaboration. Enhance legislative work in the field of medical security, and accelerate the formation of a legal and regulatory framework that aligns with medical security reforms and facilitates the standardization and improvement of the system. Establish inter-departmental coordination mechanisms to strengthen overall planning and comprehensive policy alignment among medical insurance, healthcare delivery, and pharmaceutical systems. The national department in charge of medical security under the State Council shall be responsible for comprehensively advancing the reform of the medical security system, collaborate with relevant departments to study and resolve major cross-departmental, cross-regional, and cross-industry issues arising during the reform process, and provide guidance to ensure standardized policy alignment and appropriate levels of coverage across all regions.

(28) Create a favorable atmosphere. All regions and departments should proactively interpret medical security policies and promote related services, promptly respond to public concerns, and reasonably guide expectations. Fully mobilize the enthusiasm and initiative of all parties to support and cooperate with the reforms, thereby building social consensus. For major reform initiatives, extensive opinions should be solicited, and risk assessments should be conducted in advance. In the event of significant issues, timely reports and requests for instructions shall be submitted to the CPC Central Committee and the State Council.

Source: Xinhua News Agency