Healthcare Reform 'Seven-Day Dialogue': Breaking Old Models and Building New Pathways—Bright Prospects for Tiered Diagnosis and Treatment

On April 8, Beijing’s comprehensive reform to separate pharmaceutical sales from medical services was fully rolled out, bringing more than 3,600 public medical institutions in the city under the scope of the healthcare reform.

This healthcare reform emphasizes citywide coordination, with all public medical institutions and private designated medical insurance providers voluntarily participating in the reform synchronously switching their systems. Starting from 0:00 on the 8th, all public hospitals will abolish registration fees and consultation fees, introducing a medical service fee instead.

Two months ago, a successful healthcare reform was implemented in Shanghai, a major metropolis thousands of miles away. According to Zhao Dandan, Deputy Director of the Shanghai Municipal Health and Family Planning Commission, all public hospitals in Shanghai have fully adopted a zero-markup policy on pharmaceuticals since February this year, eliminating drug price markups.

On one hand, medical service fees are being established; on the other, drug prices are being adjusted. Though different in approach, they share the same goal. The bold and comprehensive reforms to separate pharmaceuticals from medical services in Beijing and Shanghai both aim to eliminate the long-standing malpractice of public hospitals relying on drug sales to subsidize medical care, thereby optimizing the allocation of healthcare resources.

The joint promotion of healthcare reform by two major “heavyweight” sectors has fostered greater optimism across all sectors regarding the progress of China’s healthcare reform. The in-depth implementation of the separation of prescribing from dispensing has addressed the entrenched inefficiencies in the allocation of medical resources, such as those involving physicians, medical devices, and equipment. This reform has streamlined and revitalized resource flow channels across healthcare institutions at all levels, thereby paving a smooth path for another critical component of China’s healthcare reform: the hierarchical diagnosis and treatment system.

It is understood that in Beijing, the medical service fee has replaced drug markups, registration fees, and consultation fees, and has been broadly incorporated into the scope of medical insurance coverage. Industry insiders have stated that following the successful implementation of the comprehensive reform separating prescribing from dispensing in first-tier cities, the pace of similar reforms in other regions across China is expected to accelerate.

If the comprehensive reform of separating drug prescribing from dispensing is considered the “deconstruction” in the hierarchical diagnosis and treatment system reform—dismantling the inherent benefit-distribution mechanisms of public hospitals and clearing obstacles to the flow of medical resources—then the vigorously advancing construction of medical consortia represents the “reconstruction,” integrating medical resources within the same region, establishing smooth flow mechanisms, and achieving rational allocation of patients and medical resources.

As a crucial measure to facilitate the effective decentralization of high-quality medical resources, the development of Medical Consortia is a key component in establishing a rational and orderly tiered diagnosis and treatment model, and is fundamental to resolving the difficulties and high costs associated with accessing medical care.

In recent years, various regions have actively explored and advanced the development of medical consortia. By the end of July 2016, 205 prefecture-level cities and above (accounting for 60.8% of the total number of such cities in China) had prioritized the establishment of medical consortia as a key measure to implement tiered diagnosis and treatment. Several provinces, including Beijing, Jiangsu, Zhejiang, and Guangxi, have subsequently developed preliminary experiences and models.

Amidst the process of dismantling the old and establishing the new, we can more clearly discern the well-defined pathway for the implementation of hierarchical diagnosis and treatment reform.

The development of medical consortia is a key component in promoting the establishment of a rational and orderly tiered diagnosis and treatment model, with telemedicine serving as the “central nervous system” of these consortia. In recent years, the State Council and its subordinate agencies have attached great importance to the development of medical consortia, continuously issuing policies to advance their construction.

On April 12, Premier Li Keqiang presided over an executive meeting of the State Council to deploy and advance the development of medical consortiums, aiming to deepen institutional and mechanistic reforms and provide the public with high-quality, convenient medical services. A key component of this initiative is promoting the sharing of high-quality medical resources and their extension to grassroots levels. Telemedicine plays a significant role in this process.

The implementation of this comprehensive reform to separate pharmaceutical sales from medical services has removed major obstacles in the circulation of healthcare resources, potentially putting telemedicine on the “fast track” and ushering in another wave of rapid development.

Financial analysts have pointed out that, unlike the previously hyped “big health” concept, the primary beneficiaries of the current comprehensive reform to separate prescribing from dispensing will be companies deeply engaged in inter-hospital telemedicine collaboration. Once the window of institutional dividends opens, these enterprises will enjoy a distinct first-mover advantage.

Take SENYINT, which has been deeply engaged in telemedicine for many years, as an example. To date, its tiered diagnosis and treatment platform services have covered 110 national and provincial leading hospitals and more than 4,000 hospitals at all levels across China. The platform boasts over 1,500 specialists at central hubs providing consultation services, serves more than 180,000 primary care physicians, and has successfully supported the establishment and operation of more than 90 medical consortium projects of various types and levels nationwide.

It is worth noting that the healthcare industry is emerging as a new investment hotspot due to its broad development prospects. In addition to forward-looking companies such as SENYINT taking the lead in strategic positioning, financial institutions and social capital are also actively entering the healthcare sector, creating a highly competitive landscape.

SENYINT stated, “Healthcare is the core, while the internet is a tool. We provide patient- and physician-centered services, leveraging the internet to enhance service efficiency and optimize resource allocation in alignment with medical needs.”Building and developing medical consortiums requires not only their establishment but also their active operation. By delivering various clinical, educational, and teaching services focused on specialized disciplines, high-quality medical resources can be extended to broader grassroots areas. This approach facilitates reasonable patient triage while achieving information sharing, disciplinary integration, and strategic alliances among leading institutions, thereby supporting the implementation of tiered diagnosis and treatment.