China Accelerates Provincial Policies to Implement Tiered Diagnosis and Treatment System Amid National Healthcare Reform

On September 12, the General Office of the State Council issued Guiding Opinions on Advancing the Construction of a Tiered Diagnosis and Treatment System, setting forth clear targets to basically establish such a system nationwide by 2020 and to ensure that major diseases are generally treated within county-level jurisdictions by 2017. The directive requires the comprehensive implementation of tiered diagnosis and treatment in 100 cities across China as well as in Fujian, Anhui, Qinghai, and Jiangsu provinces, with the aim of gradually establishing a system characterized by initial consultations at primary care facilities, two-way referrals, separate management of acute and chronic conditions, and coordinated care between upper- and lower-level medical institutions. Last week, it was further announced that nearly 20 provinces have successively introduced policies on tiered diagnosis and treatment.

Compared with the well-developed tiered diagnosis and treatment systems in the United Kingdom and the United States, China lacks a genuine tiered diagnosis and treatment system. Although China has established a three-tier medical collaboration service network spanning cities, counties, and townships (municipal tertiary Grade A hospitals – county-level hospitals – township health centers/community health service centers), as well as a hospital classification system based on institutional capability and quality, our hierarchical network remains significantly different from the tiered diagnosis and treatment models in the UK and the US.



The most notable feature of healthcare services in the United Kingdom is that they are free for all residents. The National Health Service (NHS), which oversees medical affairs, has established a comprehensive primary healthcare system centered on general practitioners (GPs). The gatekeeping role of GPs, requiring patients to consult them first, is both well-developed and strictly enforced. Residents typically seek care from their GP as the first point of contact when ill.

To access free healthcare, individuals must register with a general practitioner (GP) to be enrolled in the National Health Service (NHS). When ill, they can schedule an appointment with an appropriate GP. If further treatment is required following the GP’s diagnosis, the patient will be referred to a specialist.

Therefore, the UK’s tiered healthcare system encompasses both primary care and secondary care services. Primary care is provided by General Practitioners (GPs). In the UK, becoming a GP requires completing medical school followed by at least five years of postgraduate medical training. Medical education typically lasts 5–6 years for graduate-entry programs and 4–6 years for undergraduate programs.

Upon graduation, they have various career paths: becoming principal shareholders or partners in general practices, joining as salaried employees, working in hospital-based general practice emergency departments, or serving in community health service centers. Regardless of their specific role, the vast majority of general practitioners’ income derives from the National Health Service (NHS). Even though shareholders or partners of general practices are essentially self-employed, they still enter into contracts with the NHS and receive remuneration paid by the NHS.

Although consultations at general practitioner (GP) clinics in the UK are free of charge, prescription medication costs vary, with some items provided free of charge and others subject to fees. Furthermore, under the UK’s system of separation between prescribing and dispensing, prescriptions can be filled at any pharmacy nationwide.

The United States follows a similar model, implementing a tiered diagnosis and treatment system with primary care provided by community physicians. Hospitals do not have general practitioners on duty; they only have outpatient and resident physicians. Given that standard outpatient visits are expensive and involve long waiting times, the initial diagnosis is typically conducted by the insured individual’s private physician, family doctor, or community physician. Patients must schedule appointments in advance when seeking care. General practitioners or private specialists may either provide direct treatment or refer patients to hospital-based specialists for more advanced care. Medical expenses are reimbursable only when treatment is accessed through a referral from a primary care physician; otherwise, patients bear the full cost out-of-pocket.

There are several scenarios. First, residents are members of a Health Maintenance Organization (HMO), paying a fixed monthly fee for unlimited visits during the coverage period. Members can choose physicians from designated healthcare providers within the HMO network, and there is generally no deductible system. Second, members of a Preferred Provider Organization (PPO) are recommended specific doctors and healthcare professionals; choosing these in-network providers entitles members to discounted medical fees. PPO members may also seek care at any time without restrictions. Third, in non-PPO cases, members who choose out-of-network physicians not recommended by the system will incur higher costs.

Since China announced the first batch of pilot cities as test beds for public hospital reform in 2010, provinces across the country have successively launched reforms to implement tiered diagnosis and treatment. Although the national new healthcare reform policy was introduced in 2009, some provinces and municipalities had already initiated pilot programs prior to that year. VCBeat has rated the implementation progress of tiered diagnosis and treatment in various provinces and municipalities based on two dimensions: the timing of implementation and the depth of adoption. The assessment results in the table are primarily derived from news reports on policy advancement issued by each province; therefore, they may contain biases and are provided for reference only.



As can be seen from the table above: 1. There are significant disparities in the implementation of tiered diagnosis and treatment across China; 2. The vast majority of provinces have only just begun to pilot tiered diagnosis and treatment; 3. Shanghai is currently the earliest and most mature region in implementing tiered diagnosis and treatment; 4. Regions that implemented the system earlier do not necessarily demonstrate greater depth of implementation, with some later-adopting regions performing better. Tables 1 and 2 below provide a cross-provincial comparison of the status of tiered diagnosis and treatment implementation.





Implementing tiered diagnosis and treatment requires addressing the following key issues:

1 The implementation of tiered diagnosis and treatment is not an isolated endeavor; it is gradually achieved within the process of comprehensive healthcare reform, and payment system reform is a prerequisite for its execution.
The payment system here encompasses several aspects. First, it prohibits the practice of subsidizing medical services with drug profits, ensuring that the income of doctors and hospitals is decoupled from pharmaceutical sales. Second, it aims to ensure fair and reasonable compensation for physicians across medical institutions of different tiers; furthermore, allowing physicians to practice at multiple sites may promote equitable income distribution and encourage the decentralization of medical resources. Third, it leverages market price mechanisms to facilitate tiered diagnosis and treatment, such as tilting health insurance reimbursement ratios toward primary care institutions and implementing differentiated payment policies for health insurance across medical institutions of varying levels.

2. Enhancing the capacity of primary healthcare services is the core objective. If primary healthcare institutions are staffed with high-quality medical professionals, residents will naturally choose to seek treatment locally. Therefore, cultivating primary care physicians and improving their clinical competencies, while simultaneously strengthening supporting infrastructure at primary healthcare facilities and expanding the quantity and variety of available medications, are prerequisites for implementing the gatekeeping system in primary care.

3. Clarify the division of labor and positioning of medical institutions at different levels. Establish a tiered medical service system based on the distinct functions of hospitals, with primary care hospitals serving as the first point of contact for residents. Cases that cannot be managed at this level should be referred to higher-level hospitals through an application and referral process. Therefore, the referral system between lower- and upper-level hospitals must operate smoothly to ensure the prompt acceptance of referred patients and avoid delays in treatment. Consequently, establishing medical consortia to enable close affiliation and tight coordination between lower- and upper-level hospitals is essential to achieving orderly referrals.

Tiered diagnosis and treatment can be described as a landmark event in China’s healthcare reform. The reform may be deemed truly successful only when a comprehensive and well-established tiered diagnosis and treatment system is fully implemented.