Sanming Healthcare Reform: A Satirical Take from Medical Circle Weekly (WeChat Group) No.5

 

Topic: China's Healthcare Reform, the Sanming Continuation.

Location: National Primary Healthcare Management and Operations Exchange Group

Participant: Liang Liangliang

China's Healthcare Reform, The Sanming Sequel:

Public hospitals say, “Listen to me: Give us staffing quotas, give us beds, and give us favorable policies so we can generate more revenue. Only then can we use salaries to incentivize doctors and nurses; only by increasing our earnings can we provide better services to the public…”

Pharmaceutical manufacturers and drug distributors say, “Listen to us: Our drugs are for treating diseases. Don’t create obstacles; encourage the public to take more medications. A blood pressure reading of 140/80 mmHg is considered high and requires medication. Ideally, everyone should be on medication.”

"The patient said, 'Listen to me: it’s difficult and expensive to see a doctor. Although medical insurance covers some costs, medication prices have increased more than tenfold...'"

The government said, “We have no money. Whose advice should we follow?” After much deliberation over a long period, it hesitantly suggested, “How about we try the Sanming Model?”

Pharmaceutical distribution companies are warning the government: “If you dare to implement the Sanming Model, we will immediately collapse and cause nationwide drug shortages... Whoever dares to adopt the Sanming Model, we will send our employees to fight you to the death...”

The government stated, “Stability is paramount… We will give it further consideration…”

Foreign pharmaceutical companies say: “There are so many idiots who have so much money—come on, drug them……”

The market says: “We will use ‘Internet Plus’ to disrupt healthcare and fundamentally change the situation of difficult and expensive medical care…”

Hospital administrators sneered, “Heh, you idiots. Do you think we’re in the taxi industry, ripe for disruption at will? If you’ve got the guts, come and try it yourselves. We won’t take the initiative to change; are you going to force us?” Then they turned back, heads down, continuing to count their money...

The government stated: “Marketization... marketization is needed...”

Experts say: In areas where market failure occurs, would anyone dare to attempt another full-scale marketization like the Zhenjiang model? If you have the capability, go ahead and try!

The government said, “Is it really that alarming? Let me think it over… How about we continue to strengthen the capacity of primary healthcare services?”

Primary care providers say: “There’s a shortage of authorized staffing positions, with excessive workloads and insufficient personnel; performance makes no difference to compensation; revenue and expenditure are managed under separate lines; staff retention is difficult; and primary care facilities are also tasked with delivering public health and family planning services… Just kill me.”

Primary Healthcare Institutions in Mountainous Areas: Keep Piling on the Pressure. The Barefoot Doctors Are Nearly Gone, and No One Wants to Be a Village Doctor Anymore. House Calls Across the Mountains Are Exhausting. What Can We Do? We Have No Choice but to Keep Carrying Our Medical Kits Up the Hills... When Colleagues Ask Why We Haven’t Transferred Away Yet, We Think to Ourselves: Sooner or Later, I Will Leave. It’s Been Another Two Weeks Since I Last Went Home...

Upon reflection, the government realized that while these entities are indeed formidable, it ultimately holds the upper hand. “This won’t do. The Sanming Model can at least alleviate the financial burden on the medical insurance fund. Let’s move forward with its implementation…”

Pharmaceutical distribution companies exclaimed, “Holy shit! Isn’t this cutting off our livelihood? Mobilize online trolls to tell the government how terrible and inefficient public hospitals are in foreign countries, arguing that privatization and marketization are indispensable... If public hospitals are not under government control, initiatives like the Sanming Model—or any similar reforms—will be futile. By the way, I also need to intimidate pharmaceutical manufacturers: Listen up, if the Sanming Model takes hold, your drugs will immediately lose their market.”

Internet-based pharmaceutical distributors nudged pharmaceutical manufacturers from behind, saying, “Don’t listen to that idiot; team up with us, and we guarantee you’ll live in the lap of luxury!”

Pharmaceutical manufacturers are suddenly acting all cute and cuddly, but when you crunch the numbers, the logistics costs for shipping out products from those small drug factories built in various counties are damn high... Forget it, let’s just shut down.

An economics expert spoke out loudly, “Look, who told you to promote the Sanming model? Now the real economy is suffering...”

Thus, at the Two Sessions, the two factions exchanged proposals; alas, the vested interest groups were too powerful and vocal. The Sanming Model persisted in various forms across different regions but ultimately existed in name only.

Topic: Is the Sanming Healthcare Reform Feasible in China?

Location: National Primary Healthcare Management and Operations Exchange Group

Contributor: Xu Yucai

The Sanming healthcare reform has been beneficial for the government, achieving the goal of “safeguarding the medical insurance fund” without additional fiscal expenditure. For patients, it has reduced costs, which is also a positive outcome. For hospitals, service fees have been raised, providing greater financial resources; reportedly, many hospitals have generated significant surpluses. Medical staff have been placed on an annual salary system, resulting in higher wages, which is likewise advantageous. In particular, the reform has curbed commercial bribery. While this has had limited impact on pharmaceutical manufacturers, it has been devastating for distributors and drug vendors, which is ultimately beneficial in the long run. However, these are all based on media reports. In reality, it is said that physicians may not have received the full annual salaries as designed, which is a different matter altogether.

My view is as follows: First, pharmaceutical manufacturing must yield reasonable profits; otherwise, Chinese patients will ultimately suffer. The direction of the Sanming salary system reform is correct, but it is clearly problematic if compensation is determined solely by “professional titles,” as everyone knows how flawed these titles are. I am not optimistic about the trend of decentralizing disease diagnosis and treatment to lower-tier healthcare institutions.

I believe the fundamental reasons why the Sanming model is unsustainable and difficult to replicate lie in its exclusion of market mechanisms, failure to implement personnel system reforms, lack of exploration into modern hospital systems, and absence of reforms in the layout of medical institutions. If severe brain drain is indeed occurring, then the reform is destined to fail.

In my view, the Sanming healthcare reform still requires substantial refinement. The current phase represents a critical “transition period” and “window of opportunity,” rather than a period for mere replication. Although I hold differing perspectives on the Sanming healthcare reform, it must be acknowledged that it remains the healthcare reform with the greatest exploratory value in China—bar none.

Location: The planned healthcare approach of the Sanming Model is not viable.

Participants: Liu Qian, Zhang Weiliang

Topic: Sanming Healthcare Reform

If the Three Principles of the People did not succeed in China, how could the Sanming Model unify the country? It is impossible to revert to a planned economy for healthcare management, nor is it feasible to apply a single model to meet the needs of the entire nation. Pharmaceutical professionals need not alarm themselves unnecessarily; healthcare reform is imperative, and so is supporting the pharmaceutical industry.

I firmly believe that the government will not revert to the old path of a planned economy; Sanming can only represent China’s lower-tier economic and healthcare standards.

Topic: The Sanming Model from the Perspective of Pharmaceutical Reform.

Location: Dayi Cloud Valley

Contributor: Liao Xinbo

I believe the strength of the Sanming Model lies in government involvement, although the extent of such involvement remains debatable. It also touches upon issues related to physicians and the definition of medical value. The Sanming Model may have used pharmaceutical reform as a lever; however, I consider pharmaceutical reform to be merely one component of broader healthcare reform. Following the separation of prescribing from dispensing, the key aspect of public hospital reform is how to create positive incentives for physicians.

The Sanming healthcare reform has driven down the prices of most drugs to very low levels. If this model were replicated nationwide, it could lead to the closure of many pharmaceutical manufacturers. However, I believe that drug pricing reform aims to adjust medication prices to an appropriate level, not necessarily the lowest possible. Only in this way can we ensure both the efficacy and cost-effectiveness of drugs, while also allowing pharmaceutical companies to retain sufficient surplus value to invest in research and development and expand production.

In the second aspect, the closure of pharmaceutical manufacturers is not necessarily a negative outcome, given that China has an excessive number of such companies with widely varying quality. If Sanming’s pharmaceutical reforms are appropriately designed and effectively implemented, they can serve as a filtering mechanism, eliminating substandard manufacturers and phasing out ineffective medications.

Topic: Examining the Core of Healthcare Reform Through the Lens of Sanming Physicians’ Exodus

Location: Dayi Cloud Valley

Participants: Liao Xinbo, Yu Xiaoming, Liang Liangliang

If the Sanming healthcare reform is indeed successful, why then is it unable to retain physicians, and why are large numbers of doctors leaving? I do not have specific data on this matter, but if this phenomenon is real, there are two possible interpretations: First, physicians may struggle to adapt to survival in the new environment; second, their professional value may be better utilized elsewhere. From an objective standpoint, it is not unreasonable to understand physicians’ departure with a balanced perspective.

The exodus of doctors from Sanming may be attributed to the lack of synchronized reforms. With viable alternatives available and driven by financial incentives—such as private hospitals seizing the opportunity to recruit talent—many physicians are inclined to leave. It is important to recognize that for many doctors, informal income can be several times their official salary, making it difficult for them to accept a reduction in these vested interests. Although the reform aims to maintain doctors’ legitimate income levels, it disrupts the lucrative kickback system. Consequently, regardless of how the reforms are structured, doctors tend to respond with negativity, passivity, and resistance. While the reform seeks to restore the true professional value of physicians, it must be acknowledged that doctors, like anyone else, are also motivated by self-interest.

Unless China eliminates kickbacks and separates prescribing from dispensing, no reform will succeed in improving its healthcare system. In such an unfavorable climate and environment, even the best policies will be undermined; consequently, effective foreign policies and practices become distorted when implemented in China.

Everyone keeps talking about spending money and making money, with endless rhetoric about “returning to the intrinsic value of life.” Yet in reality, the focus remains solely on preserving the health insurance fund (as seen in the Siming Healthcare Reform) and increasing physicians’ income (amid concerns over physician attrition and the rise of physician groups). When it comes to improving efficiency, all we hear about is tiered diagnosis and treatment. But when will we genuinely address how to prevent diseases, reduce disease incidence, and stop minor illnesses from progressing into severe conditions? I maintain my stance: any healthcare reform policy that does not aim to reduce disease prevalence, the variety of diseases, and the total number of patients is nothing but a sham!

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