Top 10 Internet Healthcare Policies of 2015: Catalyzing China's Digital Health Transformation
On March 5, 2015, Premier Li Keqiang delivered the Government Work Report at the Third Session of the 12th National People’s Congress, outlining the government’s key priorities for 2015. In the healthcare sector, these priorities included strengthening medical assistance for critical and severe diseases and accelerating the improvement of the basic healthcare system.
The Government Work Report clearly stated that in 2015, China would continue to advance reforms in grassroots healthcare, health insurance payment systems, market-based drug pricing mechanisms, public hospital reform, and the encouragement of private healthcare provision. It also emphasized strengthening medical assistance for major and critical illnesses, implementing real-time temporary aid systems, and accelerating the development of the basic healthcare system. In the realm of internet healthcare, what favorable policies with profound impact did the government introduce in 2015 to implement these tasks?
I.“Several Opinions on Promoting and Regulating Physicians’ Multi-Site Practice”
Multi-site practice permits large hospitals to provide remote assistance to primary care institutions, enabling high-level specialists to remotely guide less-experienced physicians. This fosters the development of models such as online consultations and remote case conferences, and is expected to give rise to new roles such as remote physicians in the future.
On January 12, 2015, the National Health and Family Planning Commission issued“Several Opinions on Promoting and Regulating Physicians’ Multi-Site Practice”, proposing to promote the rational mobility of physicians, relax conditions and simplify registration approval procedures, explore the implementation of filing management or regional registration, optimize the policy environment for multi-site practice of physicians, and further liberalize multi-site practice of physicians as a key component of healthcare reform. (For related content, please see VCBeat’s previous article)“How Is the Progress of Physicians’ Multi-Site Practice in Various Regions? A Comprehensive Evaluation Just Released”）
In fact, promoting and standardizing physicians’ multi-site practice is a key initiative in the government’s efforts to deepen overall reforms and advance the reform of the medical and healthcare system. By enabling physicians to practice at multiple sites, it helps achieve a more balanced distribution of medical resources, facilitates the downward flow and scientific allocation of high-quality medical resources, and better serves the public. Currently, by eliminating the approval process for multi-site practice and accelerating its implementation, limited numbers of highly qualified physicians will be able to serve more patients, thereby alleviating the current tension between medical supply and demand.
II."Announcement on the Full Implementation of Electronic Drug Supervision by Pharmaceutical Production and Operation Enterprises"
The implementation of the electronic drug supervision code, coupled with the liberalization of policies for online prescription drug sales, will significantly propel the growth of pharmaceutical e-commerce and serve as a major boost to the pharmaceutical O2O industry.
On January 4, 2015, the China Food and Drug Administration issued“Announcement on the Full Implementation of Electronic Drug Supervision by Drug Manufacturing and Trading Enterprises”, indicating that by December 31, 2015, all domestic pharmaceutical formulation manufacturers and imported drug manufacturers must be fully integrated into the China Drug Electronic Supervision Network, with the unified China Drug Electronic Supervision Code printed (or affixed) on all levels of drug sales packaging (hereinafter referred to as "code assignment"). Starting from 2016, all drugs must be strictly managed under the China Drug Electronic Supervision Network during both production and distribution stages.
The electronic drug supervision code policy has the following impacts on the pharmaceutical distribution sector: First, the electronic supervision code will become a prerequisite for market access in provincial drug procurement bidding, thereby raising the threshold for drug tender participation. Second, for commercial companies involved in drug management and sales, operational costs will increase; moreover, drugs not assigned supervision codes before January 1, 2016, may encounter issues such as the need to affix missing codes or provide alternative documentation upon outbound delivery. Third, and most importantly, the drug supervision code finally opens the door to the online sale of prescription drugs. By affixing unique, one-to-one authentication labels to each drug package, it facilitates circulation management, eliminates the production of counterfeit medicines, and serves as a robust regulatory measure for online drug sales.
In fact, on May 28, 2014, the China Food and Drug Administration (CFDA) released the “Measures for the Supervision and Administration of Online Food and Drug Operations (Draft for Comments)” (hereinafter referred to as the “Draft Measures”), proposing for the first time the liberalization of online sales of prescription drugs. Additionally, on May 7, 2015, the State Council issued the “Opinions on Vigorously Developing E-commerce and Accelerating the Cultivation of New Economic Drivers.” The “Opinions” called for the formulation and improvement of regulatory measures for online food and drug operations, so as to standardize online business practices involving food, health supplements, pharmaceuticals, cosmetics, and medical devices. The document further encouraged traditional commerce and logistics enterprises to develop e-commerce, actively leverage the internet, location-based services, and big data technologies to enhance the quality and efficiency of logistics and services, while emphasizing the strengthening of the regulatory framework for online food and drug markets to promote the development of pharmaceutical e-commerce.
III. “Development Plan for Traditional Chinese Medicine Health Services (2015–2020)”
Promoting elderly care and chronic disease management with traditional Chinese medicine (TCM) will spur the development of the related eldercare service industry, creating significant growth opportunities for internet-based TCM services such as O2O in-home health maintenance, diagnosis, and medication delivery.
On May 7, 2015, the General Office of the State Council issued"Development Plan for Traditional Chinese Medicine Health Services (2015–2020)"This is China’s first national-level plan for the development of traditional Chinese medicine (TCM) health services. The Plan states that TCM-based health and elderly care services should be actively developed, encouraging the establishment of new nursing homes and sanatoriums primarily focused on TCM health and elderly care. Elderly care institutions with appropriate conditions are encouraged to set up TCM clinics specializing in the prevention and treatment of geriatric and chronic diseases. Collaboration between TCM hospitals and elderly nursing homes, rehabilitation and convalescent institutions, and similar facilities should be promoted.
The Plan also mentions supporting the development of TCM wellness and healthcare institutions, encouraging non-governmental entities to establish standardized TCM wellness and healthcare facilities, and cultivating a group of well-known TCM wellness and healthcare service groups or chain organizations with mature technologies and good reputations. It encourages county-level TCM hospitals to explore integrated county-township services, striving to ensure that all community health service institutions, township health centers, and 70% of village clinics are capable of providing TCM services. It promotes the standardized construction and chain development of TCM outpatient departments, TCM clinics, and in-pharmacy TCM practitioner clinics.
Therefore, policies encourage the integration of Traditional Chinese Medicine (TCM) with elderly care services and chronic disease management. The underlying philosophy emphasizes preventive healthcare in medical services, embodying the TCM principle that “the superior physician treats disease before it arises.” As the essence of traditional health preservation and wellness, TCM has long enjoyed widespread understanding and support among the Chinese population, boasting a solid public foundation. Consequently, leveraging TCM as an entry point into healthcare and wellness is a natural progression, and it is poised to become a major driver of rapid growth in the health preservation sector. Furthermore, against the backdrop of broader efforts to control healthcare insurance expenditures, the development of traditional TCM into well-known brands is an emerging trend, expected to foster the rise of numerous branded TCM enterprises and chain clinics in the future.
IV. "Made in China 2025"
In China’s long-term “Made in China 2025” plan, key areas of development include innovation in medical devices, high-end imaging equipment, medical robots, smart wearables, and remote diagnostics, reflecting the government’s strong support for the advancement of internet-based healthcare technologies.
On May 8, 2015, the State Council issued the"Made in China 2025"Notice: In the field of high-performance medical devices, it is proposed to enhance innovation capabilities and industrialization levels, with a focus on developing high-performance diagnostic and therapeutic equipment such as imaging systems and surgical robots, high-value medical consumables like fully bioresorbable vascular stents, and mobile health products including wearable devices and remote diagnosis and treatment solutions. Breakthroughs and applications in new technologies such as biological 3D printing and induced pluripotent stem cells are to be achieved. This content constitutes one of the key components of China’s “Industry 4.0” plan, actively encouraging innovation in domestic medical devices. (For related information, please refer to VCBeat’s previous articles)《Full Analysis: Which Sectors of Future Internet Healthcare Are the Most Lucrative? (Made in China 2025)》）
The “Notice” points out that the strategic goal is a “three-step” approach to building a manufacturing powerhouse. The first step aims to enter the ranks of manufacturing powerhouses within ten years. By 2020, industrialization will be basically achieved, the status of China as a major manufacturing country will be further consolidated, and the level of informatization in the manufacturing sector will be significantly improved, making notable progress in the digitalization, networking, and intelligentization of manufacturing. Meanwhile, by 2020, the penetration rate of digital R&D and design tools will reach 84%.
Furthermore, the strategic focus is to advance the deep integration of informatization and industrialization. We will accelerate the convergence of next-generation information technology with manufacturing technologies, positioning intelligent manufacturing as the primary direction for this deep integration. Efforts will be concentrated on developing intelligent equipment and smart products, promoting the intelligentization of production processes, fostering new modes of production, and comprehensively enhancing the level of intelligence in enterprise research and development, production, management, and services.
It also proposes the research and development of high-end CNC machine tools and robots. Robot development should focus on meeting the application demands for service robots in healthcare, home services, education, and entertainment, actively develop new products, promote the standardization and modularization of robots, and expand their market applications.
V.“Several Policy Measures on Promoting the Accelerated Development of Socially Run Medical Institutions”
The government encourages private investment in healthcare and recommends that non-governmental entities participate in public hospital reform through diverse models. These models include leveraging internet technologies to enhance medical informatization and improve the efficiency of care delivery in public medical institutions.
On June 15, 2015, the General Office of the State Council issued"Several Policy Measures on Promoting the Accelerated Development of Socially-Run Medical Institutions", the "Opinions" propose to eliminate pre-approval items, approval conditions, and application materials that are not explicitly stipulated by laws and regulations, further streamline approval procedures, and delegate approval authority. Socially operated medical institutions shall be incorporated into relevant planning frameworks with reserved space for development. At the same time, restrictions should be relaxed
Configuration of large-scale medical equipment, exploration of the establishment of regional testing and examination centers, and promotion of co-construction and sharing of large-scale equipment. Meanwhile, the opinions also encourage social forces to participate in the restructuring of public hospitals through various forms. To promote the development of private healthcare, the notice issued by the General Office of the State Council has proposed 16 policy measures from aspects such as further relaxing market access, broadening investment and financing channels, promoting resource mobility and sharing, and optimizing the development environment.
VI."Guiding Opinions on Promoting the Construction of a Tiered Diagnosis and Treatment System"
It explicitly proposes using chronic diseases such as hypertension and diabetes as entry points to gradually promote tiered diagnosis and treatment. In chronic disease management, it clearly emphasizes leveraging internet technologies for real-time remote health monitoring, remote chronic disease management, inter-institutional network consultations, and patient referrals.
On September 11, 2015, the General Office of the State Council issued"Guiding Opinions on Promoting the Construction of a Tiered Diagnosis and Treatment System"(hereinafter referred to as the “Opinions”) The Opinions point out that by 2017, the policy framework for tiered diagnosis and treatment will be gradually improved; a mechanism for division of labor and collaboration among medical and health institutions will be basically established; high-quality medical resources will be systematically and effectively decentralized; the development of primary healthcare workforce, with general practitioners as the focus, will be strengthened; the efficiency and overall effectiveness of medical resource utilization will be further enhanced; the proportion of visits handled by primary healthcare institutions in total consultations will increase significantly; and the order of medical care will become more rational and standardized. By 2020, the service capacity for tiered diagnosis and treatment will be comprehensively improved, and safeguard mechanisms will be gradually perfected. A medical service system that is rationally laid out, appropriately scaled, optimally structured, clearly defined in responsibilities, fully functional, and efficient will be basically established. A tiered diagnosis and treatment model featuring initial consultation at the primary level, two-way referral, separate management of acute and chronic conditions, and coordination between upper- and lower-level institutions will take shape, thereby establishing a tiered diagnosis and treatment system suited to China’s national conditions. (For related content, please refer to“Dense Tiered Diagnosis and Treatment Policies: How Much Tailwind Can Primary Healthcare Services Leverage for Growth?”）
This opinion clarifies the positioning of hospitals at all levels, with a particular focus on exploring tiered diagnosis and treatment for chronic diseases, which will promote the development of companies involved in online hospitals, telemedicine, and healthcare informatization. Meanwhile, the document innovatively proposes that various regions should use chronic conditions such as hypertension, diabetes, cardiovascular and cerebrovascular diseases, and cancer as entry points to steadily advance pilot programs.
VII.“Decision of the State Council on the First Batch of Cancellation of 62 Administrative Examination and Approval Items Designated by the Central Government for Implementation by Local Authorities”
Lowering the entry threshold for corporate entities applying to provide internet-based healthcare information services will spur the prosperity and growth of more enterprises, thereby facilitating the collection and integration of internet information data.
On October 15, 2015, the State Council released to the public"Decision of the State Council on the First Batch of Cancellation of 62 Administrative Examination and Approval Items Designated by the Central Government for Implementation by Local Authorities". Seven of these pertain to healthcare: 1. Qualification review for designated retail pharmacies under the Basic Medical Insurance program; 2. Qualification review for designated medical institutions under the Basic Medical Insurance program; 3. Approval for medical and health institutions to conduct preventive health examinations; 4. Review of internet-based medical and healthcare information services; 5. Market access approval for the clinical application of Class II medical technologies; 6. Approval for clinical research on new medical aesthetic technologies; 7. Licensing for radiological imaging-based population health screening by medical institutions.
This decision means that the qualification review for retail pharmacies and medical institutions designated under the Basic Medical Insurance scheme will be directly approved by relevant provincial, municipal, and county-level authorities. Meanwhile, the entry threshold for the use of medical insurance funds will be lowered; any medical institution or retail pharmacy approved and established by the health and drug regulatory authorities may operate on a for-profit basis. Furthermore, administrative decentralization will also apply to enterprises and institutions providing internet-based healthcare information services—including those offering internet information services related to news, publishing, education, healthcare, pharmaceuticals, and medical devices—with direct approval granted by relevant provincial, municipal, and county-level authorities.
This policy is beneficial in several ways. First, it facilitates the chain expansion of medical institutions and retail pharmacies. Second, it stimulates the market by relaxing approval requirements to allow more participants to enter, thereby intensifying market competition and compelling hospitals and pharmacies to standardize their clinical practices and business operations. Finally, closely linked to the internet sector, the liberalization of eligibility for designated medical insurance providers will facilitate the collection and integration of information data, thereby fostering industrial innovation in areas such as health management and pharmacy benefit management.
VIII.“Several Opinions on Controlling the Unreasonable Growth of Medical Expenses in Public Hospitals”
Leverage information technology to implement healthcare cost containment, explore the establishment of a cost information repository for medical institutions, and enhance the level of refined management in public hospitals with regard to disease management, financial budgeting, and other areas.
On November 6, 2015, the National Health and Family Planning Commission, the National Development and Reform Commission, the Ministry of Finance, the Ministry of Human Resources and Social Security, and the State Administration of Traditional Chinese Medicine jointly formulated and officially issued“Several Opinions on Controlling the Unreasonable Growth of Medical Expenses in Public Hospitals”Notice. (For related content, please refer to VCBeat’s previous articlesWhat New Directions Do the Key Indicators in the Latest “Opinions on Cost Control in Public Hospitals” Take Compared to Previous Versions?）
In accordance with the notification requirements, the national phased objectives for cost control are as follows: by the first half of 2016, all regions shall establish, in light of local conditions, a preliminary monitoring system for medical expenses in public hospitals, thereby initially curbing the unreasonable growth trend of such expenses; by the end of 2017, sound monitoring and assessment mechanisms for controlling medical expenses in public hospitals shall be gradually established and improved, and the proportion of out-of-pocket expenditures in the medical costs borne by insured patients shall be progressively reduced.
Policy dividends related to internet healthcare include: exploring the establishment of a cost information database for medical institutions, and leveraging information technology to enhance refined management in public hospitals across areas such as medical records, clinical pathways, pharmaceuticals, consumables, expense auditing, finance, and budgeting. A tiered diagnosis and treatment system should be constructed to optimize the structure and distribution of medical resources, promote the downward flow of high-quality medical resources, improve service capabilities at the primary care level, reasonably define the functional roles of medical institutions at all levels and types, and perfect mechanisms for division of labor and collaboration. Patient-centered guidelines for tiered diagnosis and treatment should be formulated, employing a comprehensive mix of administrative, health insurance, and pricing measures to establish a model featuring initial consultation at primary care facilities, two-way referrals, separate management of acute and chronic conditions, and coordination between upper- and lower-level institutions. This aims to guide patients toward appropriate healthcare-seeking behavior, thereby improving the efficiency of medical resource utilization and overall benefits.
Implementing National Health Promotion and Health Management—Strengthening the Prevention and Control of Chronic Diseases, Improving the Performance of Basic Public Health Services and Major Public Health Service Programs, Implementing a National Health Promotion Strategy, and Controlling the Rise in Disease Prevalence and Medical Costs at the Source.
IX.“Guiding Opinions on Promoting the Integration of Medical and Health Services with Elderly Care Services”
Encourage healthcare services to leverage internet-based approaches and rely on various community services and information network platforms to achieve seamless integration between primary healthcare institutions and community elderly care service providers.
On November 20, 2015, the General Office of the State Council forwarded and issued“Guiding Opinions on Promoting the Integration of Medical and Health Services with Elderly Care Services”, comprehensively deploy further integration of medical and health services with elderly care services. By 2020, a system and policy framework for integrated medical and elderly care suited to China’s national conditions will be basically established, and a service network for such integrated care will be largely formed. (For related content, please refer to“Simplifying Complexity: Understanding the Core Direction of China’s Elderly Care Industry Policies in Recent Years”）
The "Opinions" specify five key priority areas. First, establish and improve cooperation mechanisms between medical and health institutions and elderly care institutions. Elderly care institutions are encouraged to enter into various forms of contractual collaborations with nearby medical and health institutions. Second, support elderly care institutions in providing medical services. Based on service demands and their own capabilities, elderly care institutions may apply to establish geriatric hospitals, rehabilitation hospitals, nursing homes, traditional Chinese medicine hospitals, hospice care facilities, and other such entities in accordance with relevant regulations; they may also set up internal clinics or nursing stations to enhance their capacity to deliver basic medical services. Third, promote the extension of medical and health services into communities and households.
Fully leverage various community service and information network platforms to achieve seamless integration between primary healthcare institutions and community-based elderly care service providers. Fourth, encourage non-governmental entities to establish integrated medical and elderly care institutions. Support non-governmental entities in setting up integrated medical and elderly care facilities, as well as specialized medical institutions such as geriatric rehabilitation and geriatric nursing centers, through market-oriented operations tailored to the health and elderly care needs of the older population. Fifth, promote the integrated development of healthcare services and elderly care. Encourage local authorities to adopt diverse approaches suited to local conditions to foster the integrated development of healthcare and elderly care services.
X."Proposal of the Central Committee of the Communist Party of China for Formulating the Thirteenth Five-Year Plan for National Economic and Social Development"
The 13th Five-Year Plan comprehensively outlined the development direction for the healthcare sector, highlighting close ties between internet-based healthcare and areas such as commercial health insurance, chronic disease management, and healthy aging.
From October 26 to 29, 2015, the 13th Five-Year Plan Conference was also held in Beijing, as publicly released by the government."Proposal of the Central Committee of the Communist Party of China on Formulating the Thirteenth Five-Year Plan for National Economic and Social Development"In China, key initiatives in the healthcare sector include: 1) Strengthening the medical insurance system by implementing critical illness insurance for urban and rural residents, leveraging health insurance’s role in cost containment, while encouraging the development of supplementary medical insurance and commercial health insurance, and inviting commercial insurers to participate in the administration of public health insurance schemes. 2) Improving the essential medicines system, promoting equal emphasis on traditional Chinese medicine and Western medicine, rationalizing drug pricing, and enhancing drug quality. 3) Proactively addressing population aging by building a multi-tiered elderly care service system with home-based care as the foundation, community services as support, and institutional care as a supplement; advancing the integration of medical and elderly care services; and exploring the establishment of a long-term care insurance system. The elderly care services market will be fully liberalized, with support provided to various market entities through government procurement of services, equity cooperation, and other means to increase the supply of elderly care services and products. On this basis, in December, the National Health and Family Planning Commission, in accordance with central government directives, is studying and drafting the “13th Five-Year Plan for Healthy China Development,” which will serve as the guiding document for advancing the Healthy China initiative over the next five years.
Therefore, as evidenced by the aforementioned national macroeconomic policies, policy initiatives continue to revolve around the central theme of deepening healthcare system reform. First, private and social capital is encouraged to establish medical institutions, fundamentally addressing the imbalance between medical supply and demand. Second, for existing medical institutions, comprehensive changes to patient care processes are being implemented through the promotion of tiered diagnosis and treatment, strengthening primary healthcare services, and liberalizing multi-site practice for physicians. These measures aim to mobilize and optimize scarce medical resources, fully leverage the functional value of existing healthcare assets, and safeguard citizens’ rights to equitable access to medical care. Furthermore, leveraging the circulation advantages of the internet, online sales of prescription drugs are being promoted to further implement policies separating prescribing from dispensing, thereby ensuring public access to high-quality, adequately supplied, and reasonably priced medications. In terms of healthcare payment, commercial health insurance is encouraged to participate in order to supplement deficiencies in national health insurance, alleviate the government’s fiscal burden, and achieve objectives such as cost containment and disease prevention. Finally, in response to China’s severe population aging challenge, the government is vigorously promoting policies that integrate medical care with elderly care, as well as traditional Chinese medicine (TCM)-based chronic disease management. By leveraging social resources, these initiatives aim to resolve elderly care challenges, ensuring that seniors receive proper support and security. Additionally, the government emphasizes the strategic goal of vigorously developing innovative manufacturing in China, intending to facilitate and drive successful healthcare system reform through advanced technologies, intelligent equipment, and IT-based informatization solutions.