Four More Provinces—Guangdong, Jiangxi, Gansu, and Jilin—Poised to Join China's National Comprehensive Medical Reform Pilot

Guangdong, Jiangxi, Gansu, and Jilin are expected to be included in the third batch of national comprehensive healthcare reform pilot provinces, bringing the total number of such pilot provinces to 15.

Recently, according to a report by the Southern Metropolis Daily, the scope of the comprehensive medical reform pilot will continue to expand, with specific plans to be announced within the year. At that time, approximately half of the provinces across China will be included in the comprehensive medical reform pilot. In addition, at least 10 of the 44 hospitals under the jurisdiction and administration of the National Health and Family Planning Commission (NHFPC) must be incorporated into their respective local public hospital reforms this year. As public hospital reform is fully rolled out and covered nationwide next year, all 44 NHFPC-affiliated and administered hospitals will be included in the public hospital reform.

Guangdong’s “Key Points for Deepening the Reform of the Medical and Health Care System in 2016,” released in July, also listed “launching the construction of a pilot province for comprehensive medical reform” as its top priority. Currently, Guangdong is studying and formulating a pilot program for the comprehensive reform of the medical and health care system. After submitting the program to the State Council’s Leading Group for Medical Reform for review in accordance with established procedures, the province aims to be designated as a pilot province for comprehensive medical reform and to launch the pilot by the end of this year.

Public information indicates that Jiangxi Province may also be included in the third batch of national pilot provinces for comprehensive healthcare reform. On October 26, Yao Jianhong and Wang Hu, Deputy Directors of the Department of System Reform under the National Health and Family Planning Commission, organized renowned domestic experts on healthcare reform to visit Jiangxi on behalf of the State Council’s Healthcare Reform Office to conduct research and deliberations on the “Jiangxi Province Comprehensive Healthcare Reform Pilot Plan (2017–2020).”

In its 2016 Government Work Report, Gansu Province stated that it would “deepen the comprehensive reform of public hospitals, implement tiered diagnosis and treatment, allow physicians to practice at multiple institutions, and strengthen the development of key specialties and weak disciplines in county-level hospitals as well as the establishment of regional medical centers.”

Furthermore, Jilin Province has currently prioritized “actively applying to become the first national comprehensive healthcare reform pilot province among the three northeastern provinces and the Inner Mongolia Autonomous Region” as the top priority among its six key healthcare reform initiatives.

Yao Jianhong, Deputy Director of the Department of Structural Reform under the National Health and Family Planning Commission, once explained that as healthcare reform enters a phase of deep-water complexities and critical challenges, the adjustment of interest structures has become more intricate, systemic and institutional contradictions are increasingly prominent, and it is necessary to further strengthen the coordinated nature of reforms and intensify efforts to drive them forward.

This is also the urgent reason for continuing to expand the scope of comprehensive healthcare reform pilots across China. As comprehensive healthcare reform deepens, nationwide coordination is essential to sustain its advancement. According to a source close to healthcare reform policy formulation, the State Council’s Healthcare Reform Office has begun accelerating province-level comprehensive reform pilots this year. By year-end, approximately half of China’s provinces may be included as pilot provinces, accounting for half of the country.

Provincial comprehensive healthcare reform pilots were launched last year, with the first batch of pilot provinces including Jiangsu, Anhui, Fujian, and Qinghai. This year, Shanghai, Zhejiang, Hunan, Chongqing, Sichuan, Shaanxi, and Ningxia have been added as new pilot areas, bringing the total number of provinces and regions in the first two batches of comprehensive healthcare reform pilots to 11.

Prior to the launch of provincial-level comprehensive healthcare reform pilots, China’s healthcare reform trajectory followed a path of “urban areas, then rural areas, followed by parallel urban and rural reforms, and finally provincial-level comprehensive reforms.” In February 2010, five ministries and commissions, including the former Ministry of Health, jointly issued the Guiding Opinions on Pilot Reforms of Public Hospitals. Comprehensive public hospital reforms were initiated in 16 nationally designated pilot cities, such as Shanghai and Shenzhen, with Beijing added in 2011. Additionally, various provinces selected 37 cities for their own reform pilots. In the subsequent years, the number of cities participating in the urban public hospital reform pilots was not expanded, and the focus of public hospital reform shifted to the county level.

In 2012, the General Office of the State Council issued the “Opinions on Pilot Comprehensive Reforms of County-Level Public Hospitals,” designating the first batch of 311 pilot counties across China to carry out comprehensive reforms. Two years later, five departments, including the National Health and Family Planning Commission and the Ministry of Finance, jointly issued the “Opinions on Advancing Comprehensive Reforms of County-Level Public Hospitals,” expanding the pilot program to 700 counties and ultimately rolling it out nationwide to all counties last year.

Four years after the initial trial, it was not until 2014 that the State Council’s Office of Healthcare Reform expanded the number of pilot cities to 34, adhering to the principle of designating at least one pilot city per province. Since then, reforms in urban and county-level public hospitals have advanced in tandem, with the number of pilot cities rising to 100 last year and reaching 200 this year. Next year, comprehensive public hospital reform will be rolled out across all prefecture-level cities and above.

The focus of this round of comprehensive healthcare reform pilots can be seen from the “Key Tasks for Deepening Healthcare System Reform in 2016,” issued by the General Office of the State Council in April. The document states, “Encourage and guide cross-provincial joint procurement; within provinces participating in comprehensive healthcare reform pilots, volume-based joint procurement among certain regions may be encouraged… Provinces participating in comprehensive healthcare reform pilots shall implement the ‘two-invoice system’ province-wide… Summarize and improve the reform practices and experiences of Sanming City in Fujian Province, and promote them in comprehensive healthcare reform pilot provinces such as Anhui and Fujian.”

On November 8, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued the “Several Opinions of the Leading Group for Deepening the Reform of the Medical and Healthcare System under the State Council on Further Promoting the Experience in Deepening the Reform of the Medical and Healthcare System,” which also stated that “public hospitals shall gradually implement the ‘two-invoice system’ for drug procurement, and other medical institutions are encouraged to adopt this system. This aims to reduce intermediate links in the drug distribution sector, increase the concentration of distribution enterprises, crack down on invoice fraud and money laundering, lower artificially inflated drug prices, and purify the distribution environment.”

As can also be seen from the above two documents, the “Two-Invoice System” is a key focus in the pilot provinces for healthcare reform; public hospitals are gradually implementing the “Two-Invoice System,” which will be expanded to nationwide rollout across China.

Comprehensive healthcare reform is gradually expanding nationwide, with the aim of progressively establishing a coordinated mechanism that encompasses inter-provincial collaboration and synergy across all sectors of the healthcare and pharmaceutical system. In many regions, the top Party and government leaders have personally taken charge of comprehensive healthcare reform, requiring close coordination among medical insurance, healthcare delivery, and pharmaceutical sectors to achieve integrated “three-medical” linkage.

In addition, under the overarching framework of healthcare reform, the inter-provincial comprehensive healthcare reform pilots must also address issues such as tiered diagnosis and treatment, drug pricing, fiscal policies, health insurance payment reform, health insurance funds, the establishment of modern hospital management systems, hospital personnel and compensation, and multi-site practice for physicians.

(This report synthesizes coverage from Nandu and Saibailan.)