Guangdong to Fully Launch Public Hospital Reform by Year-End, Decoupling Doctor Compensation from Drug Sales

Source: Guangzhou Daily

On July 18, the Guangdong Provincial People’s Government website released the “Key Points for Deepening the Reform of the Medical and Health Care System in Guangdong Province in 2016” (hereinafter referred to as the “Key Points”). Guangdong strives to become a pilot province for comprehensive medical reform by the end of this year and to launch the pilot work.

In accordance with the key points, Guangdong Province aims to fully launch the comprehensive reform of urban public hospitals by the end of this year, and promote the participation of hospitals under the jurisdiction of national ministries and provincial authorities in the local public hospital reforms.

Strictly control the unreasonable growth of medical expenses

How Should Public Hospital Reform Be Implemented? Key points indicate that the government must fully fulfill its responsibility for funding public hospitals, and medical service prices should be rationalized in a stepwise manner. Costs for pharmaceuticals, medical devices, and consumables should be reduced through centralized procurement, health insurance cost containment, and standardization of clinical practices, while unreasonable fees for examinations and tests must be strictly controlled to create room for adjusting medical service prices. Medical service prices should be adjusted reasonably to reflect the technical and labor value of healthcare professionals; price adjustments should not be limited merely to offsetting the removal of drug markups, and the adjusted portions shall be included in health insurance coverage in accordance with regulations. Coordination among policies on medical service pricing, health insurance payment, medical cost control, and tiered diagnosis and treatment should be strengthened to ensure the sustainable development of healthcare institutions, the affordability of health insurance funds, and no overall increase in the financial burden on the public.

Meanwhile, strict control must be exercised over the unreasonable growth of medical expenses. Pilot cities for public hospital reform are required to compile specific lists and implement focused monitoring on the irrational use of high-priced adjuvant and nutritional drugs, as well as on the costs associated with 10 typical single-disease conditions, so as to curb the trend of unreasonable growth in medical expenditures. By the end of 2016, the number of cases managed under clinical pathways in pilot cities shall account for 30% of all discharged cases from public hospitals, and the number of disease categories subject to diagnosis-related group (DRG) or per-case payment shall be no fewer than 100.

On the other hand, medical services should be significantly improved, with a focus on appointment-based diagnosis and treatment, day surgery, information push notifications, billing and settlement services, pharmaceutical care, emergency and critical care, and high-quality nursing. Tertiary hospitals shall fully implement appointment-based diagnosis and treatment. Regions with appropriate conditions should take the lead in piloting day surgery programs in tertiary hospitals and continuously expand the range of conditions eligible for day surgery.

Regarding compensation for medical staff, gradually increase the income and benefits of healthcare professionals, as well as the proportion of personnel expenditures relative to operational expenses in medical institutions.The performance-based pay of directors of public hospitals may be determined by government-affiliated healthcare administration agencies. It is strictly prohibited to set revenue-generation targets for medical personnel, and their compensation must not be linked to the hospital’s business revenues from pharmaceuticals, consumables, diagnostic examinations, or laboratory tests.

Increase the free supply of special medications such as those for HIV/AIDS

In improving the drug supply guarantee, fully promote centralized procurement of drugs in public hospitals, and include all medical consumables (including high-value medical consumables) in the centralized procurement through provincial third-party electronic drug trading platforms.

Expand the free provision of essential medications for specific conditions such as HIV/AIDS, advance guarantees for access to basic medicines for the elderly and children, research appropriate dosage forms and specifications of pediatric essential medicines, promote consistency evaluation of quality and efficacy for generic drugs, conduct comprehensive sampling inspections of all essential drug varieties, and strengthen supervision and inspection efforts.

Drug shortages have repeatedly drawn public attention. The key points specifically highlight the selection of certain hospitals and primary healthcare institutions as monitoring sites for drug shortages, and the improvement of the reporting system for shortage-related information. Support will be provided for the establishment of designated production bases and small-volume drug production bases. Efforts will be made to promote the establishment of a routine reserve system for drugs in short supply.

Key points specifically emphasize advancing the separation of prescribing and dispensing through diverse approaches, and organizing pilot programs for the sharing of prescription information from medical institutions, medical insurance settlement data, and retail drug consumption records. Hospitals are prohibited from restricting the outflow of prescriptions; patients may freely choose to purchase medications either at hospital outpatient pharmacies or at retail pharmacies with a valid prescription.

Tiered Diagnosis and Treatment

Key points indicate that tiered diagnosis and treatment should be fully implemented across the province in accordance with the requirements of “initial consultation at primary care institutions, two-way referral, separate management of acute and chronic conditions, and coordination between upper- and lower-level medical institutions.” By the end of 2016, the rate of standardized diagnosis, treatment, and management for patients with hypertension and diabetes should reach over 30%. The range of pilot diseases for tiered diagnosis and treatment should be gradually expanded to include common diseases, chronic diseases, tuberculosis, and other conditions.

Expand the family doctor contract service. Pilot the family doctor contract service in cities such as Shenzhen, Zhuhai, Huizhou, Dongguan, Zhongshan, Jiangmen, and Zhaoqing. The costs of the contract service shall be shared by the medical insurance fund, basic public health service funds, and the contracted residents.

Improve Medical Insurance

Key points indicate that the enrollment rate for basic medical insurance for urban and rural residents has remained stable at over 98%. The per capita government subsidy standard for medical insurance has been raised to no less than RMB 420, with individual contributions amounting to no less than RMB 150 per person. The reimbursement rate for inpatient expenses within the scope of coverage under the medical insurance policy for urban and rural residents has remained stable at approximately 75%.

Comprehensively implement global budget controls for basic medical insurance payments. Outpatient pooled funding shall adopt capitation payment, while inpatient care and coverage for specific outpatient conditions shall promote composite payment methods such as diagnosis-related group (DRG)-based payment and per-service-unit payment. Regions with appropriate conditions may explore payment based on Diagnosis-Related Groups (DRGs). Support the development of day-case surgeries and other services. Launch pilot programs to include pre-admission outpatient examination costs in inpatient settlement.

Healthcare Talent

Key points highlight that policies will be improved regarding the employment and contract compliance management of tuition-free, directionally recruited medical students in rural areas, with a focus on general practitioners.

Fully implement standardized residency training, provide subsidies for teaching and practical activities at 45 standardized residency training bases and for trainees in accordance with regulations, and add 5,200 new standardized resident physicians (including traditional Chinese medicine resident physicians).

Advancing Health Informatics Construction

Build an information technology system for healthcare. All regions shall accelerate the construction of regional health information platforms, establish and improve information systems for tiered diagnosis and treatment, and realize information management functions such as appointment-based services and two-way referrals within the region. Accelerate the development of provincial population health information platforms to promote gradual data sharing across the four levels: province, city, county, and township (sub-district). Initiate the construction of telemedicine platforms in county-level hospitals, and encourage localities to actively explore effective models of “primary-level examination and superior-level diagnosis.” Leverage information technology to facilitate the vertical flow of medical resources, thereby improving the accessibility of high-quality medical resources and the homogeneity of medical services.

Actively promote “Internet + Healthcare” services. Integrate health management and medical information resources to facilitate services such as appointment scheduling, online payment, remote follow-up, and online access to examination and test results. Vigorously develop business applications including telemedicine, disease management, and pharmaceutical care services. Strengthen the development and application of big data in clinical medicine and public health.