Deloitte | China Healthcare Services Industry Analysis Report III: Development Status and Product Overview of Public Hospitals and Community Hospitals
Report 1:The Impact of Healthcare Reform Policies on the Landscape of the Medical Services Market
Report 2:Current Status and Trends in the Development of Private Hospitals and Clinics
1. Dilemmas Facing the Development of Public Hospitals
In the “Key Tasks for Deepening Healthcare System Reform in 2014” issued by the General Office of the State Council, public hospital reform was listed as the top priority. According to the plan, reforms of public hospitals would be advanced simultaneously at both urban and county levels. The number of pilot counties for public hospital reform would increase by 700, covering more than 50% of all counties nationwide, while the comprehensive reform pilots for urban public hospitals would continue to expand, with each province required to designate one pilot city in 2014. On one hand, healthcare reform pushes public hospitals toward market-oriented operations; on the other hand, it reduces their revenue from pharmaceutical sales and employs health insurance payment mechanisms to control medical expenses. As healthcare reform deepens, public hospitals will face a series of challenges.
The abolition of drug markups will compel public hospitals to reshape their revenue mechanisms. A key focus of public hospital reform is to establish a scientific compensation mechanism and restore the public welfare nature of public hospitals by eliminating drug markups. In accordance with healthcare reform policies, after the elimination of drug markups, hospital revenue streams will be reduced from three channels—service fees, drug markups, and fiscal subsidies—to two channels: service fees and fiscal subsidies. The resulting revenue gap will be jointly addressed through increased government subsidies, adjustments to service fees, and enhanced cost control. Data from the Health Statistical Yearbook shows that in 2012, drug sales revenue accounted for 39.7% of the total income of general hospitals in China, while fiscal subsidies accounted for only 7.5%. The elimination of drug markups will significantly reduce hospital revenue, and given the limited scope for increasing government subsidies, it is evident that bridging the revenue gap will primarily rely on public hospitals transforming their operational mechanisms. Therefore, hospitals should proactively diversify their revenue sources. For instance, since medical service pricing standards in China are often set too low to cover costs, hospitals can reasonably adjust these prices to reflect the value of medical personnel’s technical skills and labor. Additionally, hospitals can leverage their technological advantages to introduce high-value-added medical services.
Reforms to the health insurance payment system will compel public hospitals to improve operational efficiency and reduce costs. Under the universal health insurance system, health insurance is the primary source of revenue for public hospitals, and controlling provider costs through insurance payments is an international trend. The 2014 work tasks issued by the General Office of the State Council pointed out that it is necessary to continue improving the overall control of health insurance payments and accelerate the reform of payment methods. Various regions have also actively piloted new health insurance payment systems; for example, Beijing has successively launched pilots for global budgeting and diagnosis-related group (DRG) payments. The reform of payment methods means that the revenue public medical institutions can earn from providing certain services is subject to a cap. Therefore, their profit model must shift from revenue maximization to cost minimization, making efficiency and cost key indicators for assessing the operational performance of public hospitals.
Under market-driven resource allocation, public hospitals may face the outflow of both talent and patients. Private hospitals have experienced rapid growth over the past five years, with a compound annual growth rate (CAGR) of 14% in the number of hospitals and 21% in the number of hospital beds. Although private hospitals currently remain at a disadvantage compared to public hospitals, their strength is gradually increasing as social capital and healthcare management professionals converge toward the private sector, ultimately positioning them as formidable competitors to public hospitals. Additionally, the multi-site practice policy for physicians, a key initiative promoting diversified healthcare delivery, is being progressively implemented. Under this system, physicians can move freely based on their skills and demands, allowing the market to play its full role in achieving an optimal allocation of medical human resources. However, most physicians in China are currently affiliated with public hospitals, with senior specialists heavily concentrated in Grade A tertiary hospitals. As the multi-site practice policy is rolled out, public hospitals may face increasing pressure from the outflow of physician resources.
Reform of public hospitals cannot be achieved overnight; rather, it requires sustained efforts on two fronts. The first involves reforming the external environment, which necessitates appropriate top-level design and collaborative planning among all stakeholders, including the government, society, and the healthcare system (including hospital physicians). The second pertains to internal hospital reforms. Against the backdrop of advancing healthcare reform, public hospitals must adapt to this major trend, refine their internal mechanisms, and fulfill their public-interest mission of treating diseases and saving lives.
— Zhang Yu, Shanghai Ruijin Hospital, Associate Chief Physician
2. Countermeasures for Public Hospitals
Public hospitals in China face the issues of undifferentiated administration and operation, as well as blurred lines between governmental functions and institutional operations. Under this system, hospital internal management and medical staff lack motivation on one hand, while the government, serving both as the regulator and the owner of property rights, exercises limited regulatory oversight, resulting in insufficient market competition. Institutional irrationality is a major cause of the low operational efficiency of public hospitals; therefore, adopting appropriate governance models to clarify ownership and management rights has become an inevitable trend. In terms of operational mechanisms, Chinese public hospitals currently hold a leading position in brand reputation, technology, and talent. Thus, they should seize this favorable opportunity to accelerate resource integration and refine business operations, thereby enhancing their competitiveness and securing a place in the increasingly market-oriented healthcare services market.
Reforming the Performance Management System
Despite years of healthcare reform, many public hospitals still adhere to an egalitarian (“big pot”) performance management system, failing to truly implement distribution according to work, let alone tailor detailed performance management systems and metrics to the hospital’s vision and goals. Competition in the healthcare services market is ultimately a competition for talent; without a robust performance management system that cascades metrics down to individual employees, hospitals cannot motivate staff to strive toward institutional objectives. Establishing a scientific and rational performance appraisal system helps enhance employee motivation and enthusiasm, improve both individual and institutional performance, thereby strengthening the hospital’s competitiveness and promoting sustainable development. Particularly in an increasingly competitive healthcare market, public hospitals need to adopt enterprise-style performance appraisal systems to boost their performance and maintain market leadership. Only by aligning appraisal metrics with the organization’s vision, goals, and strategic priorities, and breaking them down to the individual level, can personal objectives be aligned with organizational goals, ensuring concerted efforts in the same direction.
When developing an effective performance management system, public hospitals should adopt the following framework, which encompasses four key components:
Hospital strategy and operational models should provide guiding principles for the overall performance management system. This includes strategic vision, oversight, and organizational structure. When constructing an organizational performance management system, the primary and most critical step is to clarify whether the organization has a clear vision, strategy, and objectives. Secondly, another important consideration is the supervisory role that management and organizational policies can play in change management. Meanwhile, it is also essential to define the overall organizational architecture, including whether there are clear reporting lines and defined job responsibilities within the organization.
Hospital performance management is a system that translates organizational strategy into actionable performance management. It may include the Balanced Scorecard and performance indicators. A comprehensive Balanced Scorecard should encompass assessments of operations, finance, quality, and patient satisfaction, while remaining aligned with the organization’s strategic objectives. Furthermore, a critical aspect of the performance management system is whether performance indicators are clearly defined and established based on appropriate methodologies, clear objectives, and robust indicator management practices.
The level of operational management within an organization serves as the foundation for performance improvement initiatives. This encompasses employee management knowledge (whether formal training is provided to selected medical personnel and staff within the organization); learning, training, and development (whether the organization invests in its employees by offering training courses and development opportunities); and methodologies (how event progress is documented, how incidents are reported, how improvement opportunities are addressed when identified, and how challenges are resolved). The level of operational management also covers information systems (whether existing systems can manage data and generate reports) and communication (how information is exchanged internally and externally).
Organizational culture and the strength of relationships are critical linkages that sustain the operation of performance management systems. Key considerations for hospital administrators include organizational engagement, leadership, and motivational factors: how to involve staff and healthcare professionals at all levels; how to empower healthcare professionals and other employees to lead their own professional development initiatives; and whether appropriate incentive and reward mechanisms are in place within the organization.
Before determining specific performance indicators, consensus should be reached within the hospital regarding its vision, objectives, overall development direction, and strategic priorities. While customizing a performance appraisal system for a large Grade A tertiary hospital, Deloitte Consulting found that employees had varying understandings of and insufficient alignment with the hospital’s overall vision, objectives, and strategic priorities. In response to this issue, Deloitte worked with the hospital’s management to clarify these three critical considerations and communicate them to staff. After achieving consensus, Deloitte proceeded to reform the performance appraisal system in accordance with the following principles.
Specific principles include:
Indicators must be aligned with the hospital’s vision and strategic objectives;
Prioritize the 3 to 6 most critical indicators, which must be objectively measurable and derived from reliable data sources;
Demonstrate a commitment to team building by establishing diverse evaluation scopes, promoting intra- and inter-team interactions, and sharing leading treatment protocols;
Recognize team performance and commend outstanding individuals or teams, provide timely feedback, and publicly share performance scorecards for individuals, groups, and the organization;
Implement fair, objective, and transparent incentive mechanisms in accordance with established criteria;
Inform employees of performance and evaluation criteria, manage their expectations reasonably, hold discussions to understand their concerns, and continue to optimize based on feedback.
Improving Patient Experience
According to Deloitte’s 2011 Survey on China’s Healthcare Services, many patients believe there is significant room for improvement in the service quality of public hospitals. Specifically, 47% of patients felt that public hospitals were not patient-centered; 32% believed that current medical services in public hospitals failed to meet their needs; and 45% considered waiting times for treatment to be excessively long. With the widespread adoption of medical technologies across healthcare institutions at all levels, the rapid expansion of private hospitals, and the increasingly diversified and multi-layered demands for healthcare consumption among the public, public hospitals are facing an awkward situation: diminishing technological barriers, growing competition from private hospitals, and a mismatch between service offerings and patient expectations. To avoid substantial patient outflow, public hospitals must address their weaknesses, genuinely establish a patient-centered service philosophy, and comprehensively improve patient experience to maintain their market position.
Systems for enhancing patient experience must be comprehensive, establishing professional patient experience protocols. Patient experience encompasses the entire journey from admission to discharge, with patient satisfaction and complaint rates serving as key outcomes of this process. Contrary to the prevailing perception in public hospitals that patient experience is solely the responsibility of doctors and nurses, every staff member who interacts with patients contributes to shaping their experience—from the moment they decide to seek hospitalization until discharge. This includes everyone from telephone operators and security personnel to admission cashiers and cafeteria staff; each individual plays a role in defining the patient’s overall hospital experience.
The foundation of patient experience must be a comprehensive program, not merely a “special project.” Hospitals need to reach a consensus on patient experience at the level of core values, understand the drivers of patient experience and patient perspectives, design processes based on these perspectives, and motivate and train all staff members who interact with patients. When assisting a leading tertiary Grade A hospital in China to enhance its patient experience, Deloitte Consulting employed the following evidence-based dimensions to deconstruct the drivers of patient experience: respect, communication, education, knowledge, physical comfort, emotional support, involvement, coordination and integration, referral to lower-level medical institutions, and accessibility. Taking respect as an example, it refers to focusing on patients’ values, needs, and preferences, including issues related to culture, dignity, privacy, and personalization; recognizing the importance of quality of life; and collaboratively developing treatment plans with patients. Specific details include addressing patients by their preferred names, assigning rooms or beds according to patients’ preferences or requests, and promptly responding to or fulfilling patients’ needs. Meanwhile, Deloitte also helped the hospital establish a dedicated Patient Experience and Complaints Office, set up a Patient Experience Fund to incentivize outstanding staff, collect patient experience data, analyze trends, and link these insights to the hospital’s performance evaluation system. Without resonance with core patient values, motivational factors, and leadership, it is impossible to effectively promote engagement among all team members or create an exceptional patient experience.
Of course, patients are not always right. While striving to create the optimal patient experience, it is also essential to manage patient expectations. Typically, communicating with patients before admission—informing them about the general examinations and treatments they will undergo during their hospital stay, as well as basic living conditions—can help them form reasonable expectations about their inpatient experience. Following Deloitte’s recommendations, a tertiary Grade A hospital used printed materials and videos to inform patients about what to expect during their hospitalization. These materials covered topics such as potential nighttime disturbances due to emergency resuscitation efforts, the fact that nurses prioritize call-light responses based on urgency, and explanations regarding pain management and how to communicate effectively with physicians. Meanwhile, the hospital also required patients to jointly maintain the quality of the inpatient experience after admission: patients in shared rooms were asked to minimize nighttime noise, report any inadequately cleaned rooms, and were encouraged to routinely ask physicians and nurses whether they had washed their hands. After the project was designed and implemented, the hospital’s patient satisfaction rate rose from 55% to a leading level of 92% within six months.
Introduce Marketing Management to Build a Solid and Mutually Trusting Relationship with Patients
Marketing management in healthcare services is a series of activities centered on patient needs, which accurately position the market by studying the demands of target populations, integrating medical resources, and providing medical services to patients. Supported by robust policies, China’s healthcare service market is gradually opening up and shifting from a former “seller’s market” to a “buyer’s market.” The promotion of multi-site practice and the accumulated capabilities of private hospitals are gradually breaking down technical barriers, dismantling the monopoly status of public hospitals, and intensifying competition. To secure a foothold in this competitive landscape, meet patients’ medical needs, and establish stable, mutually trusting doctor-patient relationships, large public hospitals must introduce the concepts of marketing management. Implementing marketing management helps build the brand image of public hospitals and improve doctor-patient relationships. The principle of being “patient-centered” precisely reflects the marketing concept of starting from the customer. By adopting marketing strategies, hospitals will gradually move away from the outdated notion of being “hospital-centric,” sincerely serve patients, comprehensively enhance the patient care experience, and attract customers through high-quality medical services. Furthermore, the medical needs of the Chinese population are developing in a multi-level and diversified direction. Marketing management assists public hospitals in breaking free from rigid management models, conducting market segmentation and positioning based on the needs of target populations and their own technical capabilities, and providing differentiated services to enhance their competitive strength. Additionally, brand promotion by public hospitals facilitates stronger communication with the public, increases patient loyalty, expands public awareness, and grows market share.
Public hospitals should first establish correct marketing concepts when implementing marketing management. The essence of marketing lies in demand management, not merely in advertising. Therefore, the promotion of marketing strategies must clearly focus on patient-centered service objectives, achieved through collaboration between marketing department personnel and medical staff in clinical departments. Secondly, public hospitals need to strengthen market research, analyze target customers, orient themselves according to market trends, and position appropriate service portfolios based on customer needs. In terms of brand marketing, public hospitals already enjoy considerable public recognition due to their non-profit nature. Hence, brand marketing should focus on enhancing the public image of the hospital’s medical expertise and service quality. Marketing methods can adopt a combination of various approaches; in addition to advertising, hospitals can boost public identification by having specialists provide community services, launching doctor Q&A programs on television and radio stations, and establishing green channels for expedited care.
The establishment of medical consortiums facilitates marketing management in hospitals. By achieving vertical resource sharing, hospitals at all levels can make more precise strategic positioning based on their own conditions and patient needs, determine appropriate product portfolios, and effectively integrate resources. For instance, central hospitals within a medical consortium can undertake complex treatments (which typically have higher value-added), while referring minor illnesses or rehabilitation cases to lower-tier hospitals with lower fees. This approach not only fully utilizes specialists from upper-tier hospitals by freeing them from treating minor ailments and allowing them to devote sufficient time to diagnosing and treating severe diseases, thereby maximizing the value of medical services, but also increases patient flow at lower-tier hospitals, improving their resource utilization rates. Such a referral system can also reduce patients’ medical costs, improve service quality, and enhance the public recognition of the entire medical consortium. Secondly, technical output from central hospitals to lower-tier hospitals within the consortium can improve the medical service capabilities and standards of lower-tier institutions, thereby strengthening their support for upper-tier hospitals and enhancing the overall operational efficiency of the consortium. Additionally, the establishment of medical consortiums helps member hospitals secure physician resources. With the full implementation of multi-site practice and free practice for physicians, medical consortiums that possess more medical service institution platforms will have access to broader patient channels, making them more attractive to physicians and enabling them to retain this relatively scarce resource. Currently, a common pilot model across various regions involves tertiary hospitals forming alliances with several primary and secondary hospitals, community service centers, and township health clinics within the area. This creates a medical model where residents sign up locally, receive care in their communities, and are referred through a tiered system. However, most medical consortiums remain at the level of technical collaboration and mutual recognition of information, with relatively loose organizational structures. They have not established reasonable benefit distribution and incentive mechanisms, resulting in poor effectiveness and difficulty in forming long-term mechanisms. In contrast, tightly integrated medical consortiums, which achieve unified allocation of personnel, finances, and materials among alliance members as well as economic integration, find it easier to optimize resource allocation; the Shanghai Ruijin Group is an example of the latter. In terms of specific operations, public hospitals at all levels within the medical consortium need to build chains for knowledge and skill development, integrated medical division-of-labor services, data, internal incentive mechanisms, and patient recognition to meet continuously growing medical demands.
Establish Standardized Medical Services and Clinical Pathways
Standardized medical service processes are effective measures for improving service quality, optimizing resource utilization, and enhancing patient safety. The accreditation system of the Joint Commission International (JCI) requires hospitals to establish standardized procedures for patient admission, referral, and discharge, ensuring that patients receive continuous and coordinated care throughout the entire diagnosis and treatment process. In its Notice on Further Improving Medical Service Management in Healthcare Institutions, China’s National Health and Family Planning Commission also stipulated that all medical institutions should design scientific and rational medical service processes centered on patients to simplify procedures. By leveraging patient needs and implementing standardized processes, hospitals can coordinate various services and human resources, foster organic integration among work teams, reduce inter-departmental buck-passing, improve patient treatment outcomes, and maximize the utilization of medical resources. For instance, patient triage and standardized bed allocation rules eliminate unnecessary time spent on inter-departmental resource coordination while enabling rapid assignment of patients to appropriate beds. Real-time bed monitoring and the flexible deployment of nursing staff across departments help alleviate pressure from sudden patient surges, reduce the workload of healthcare professionals, and ensure that patients receive safe and appropriate treatment. Effective discharge and referral systems ensure optimal matching between patient needs and medical resources. Based on early-established diagnosis, treatment, and discharge plans, combined with patients’ recovery status, hospitals can facilitate timely discharge or referral, allowing patients to receive suitable supportive care or different types of medical services. Meanwhile, this releases hospital medical resources to serve other patients with corresponding needs. Collaborative medical service processes ensure that care provided by different hospital departments and professionals aligns with patient needs, while also guaranteeing that doctors, nurses, and other medical personnel have access to comprehensive information, thereby reducing redundant work and resource waste.
In contrast to the standardization of medical service processes, clinical pathway management is a quality management model focused on patient treatment itself. Guided by evidence-based medicine and based on patient diagnoses, clinical pathway management regulates medical practices, controls treatment risks, improves therapeutic outcomes, and optimizes resource utilization through the standardization and refinement of activities such as examinations, surgeries, treatments, and nursing care for specific diseases. Originating in the United States in the 1980s, it has been widely applied with favorable results in Europe, the United States, and some Asian countries, and has been listed by the Joint Commission International (JCI) as one of the core standards for hospital accreditation. China started relatively later; after 1998, domestic hospitals began pilot programs for a limited number of diseases. In 2009, the National Health and Family Planning Commission officially launched nationwide pilot work on clinical pathway management. By the end of 2011, a total of 3,467 medical institutions and 25,503 departments across China had implemented clinical pathway management. The pilot programs achieved significant results, demonstrating that clinical pathway management helps ensure medical safety, improve service efficiency, standardize clinical medication, control unreasonable medical costs, and enhance patient satisfaction (Table 7). In October 2012, the National Health and Family Planning Commission issued guidelines for promoting clinical pathway management during the “12th Five-Year Plan” period, setting work objectives for the following three years. It required that by the end of 2015, all tertiary hospitals and 80% of secondary hospitals in each province (autonomous region, or municipality) should implement clinical pathway management, and gradually increase the number of specialties and diseases covered by clinical pathways.
Improving Hospital Information Systems
Healthcare informatization applies computer science, networking, telecommunications, and database technologies to manage the storage, retrieval, sharing, and utilization of information, thereby supporting healthcare delivery as well as clinical and administrative decision-making. With the rapid advancement of medicine, rising public expectations for healthcare quality, and increasingly stringent government control over medical expenses through health insurance mechanisms, hospital management has become more complex, making information technology an indispensable tool for hospital development. Hospital informatization helps improve service quality. The patient care process often requires frequent communication among various healthcare professionals, patients, and their families, as well as coordination across different medical services and even between hospitals. Enhanced availability of information technology at various points of care will significantly facilitate communication, expand alongside the continuous optimization of service and clinical workflows, and support coherent healthcare delivery. For instance, the use of Electronic Medical Record (EMR) systems can accelerate information sharing among inpatient, outpatient, and emergency departments, enabling healthcare providers to promptly access patient medical histories and understand their conditions. This facilitates smoother patient transfers between departments and reduces the likelihood of duplicate tests caused by information asymmetry. Informatization also contributes to ensuring patient safety. Networked EMRs and medication knowledge bases can automatically detect and correct errors in physician orders, thereby reducing the risk of medication errors due to misreading or transcription mistakes. Convenient, anytime-anywhere access to detailed patient information, such as allergies and medication history, assists healthcare providers in making accurate clinical decisions. Furthermore, cardiovascular information systems and surgical anesthesia monitoring systems can accurately record details such as anesthesia administration, thereby improving surgical success rates. The application of information technology can also enhance operational efficiency and reduce costs. Electronic bed monitoring systems help hospitals better allocate nursing staff, ensure appropriate staffing levels across departments, and minimize unnecessary labor costs. Service and clinical protocols that healthcare providers must follow can be integrated into information systems for easy reference. Additionally, the deep mining, integration, analysis, and utilization of multi-channel data—including administrative, financial, clinical, and multi-hospital data—support clinical and managerial decision-making, driving hospitals toward intelligent transformation.
The in-depth development of hospital informatization will undergo the establishment of Hospital Information Systems (HIS) and Clinical Information Systems (CIS), ultimately expanding toward Regional Healthcare Information Networks (RHIN). The Hospital Information System primarily targets the management of patient flow, material flow, and financial flow within hospitals, serving both medical operations and administrative functions. In contrast, the Clinical Information System is patient-centric, designed to collect, store, process, and transmit clinical care data. It includes systems such as Computerized Physician Order Entry (CPOE), Physician Workstation Systems, Nursing Information Systems, Laboratory Information Systems, and Picture Archiving and Communication Systems (PACS). Hospital Information Systems meet the needs for automation in daily hospital administration while providing the data foundation and procedural support for the collection of clinical information. Consequently, most hospitals begin by implementing HIS and gradually transition to CIS. On the other hand, Clinical Information Systems not only support the daily clinical work of medical staff but also generate vast amounts of data that help hospital administrators gain deeper insights into the characteristics and needs of their patient populations, as well as identify issues within healthcare service delivery, thereby enhancing the utilization of Hospital Information Systems. Building on these two foundations, Regional Healthcare Informatization aims to achieve regional sharing of medical information, including information exchange between hospitals and among various entities in the healthcare industry, such as hospitals, payers, and pharmaceutical and medical equipment suppliers.
Some developed countries have prioritized the use of hospital information systems to ensure medical safety and improve the quality and efficiency of healthcare, and have successively entered the stage of promoting regional informatization. The United States, a representative of highly marketized medical services, has achieved a high level of informatization. Since 2000, most hospitals have entered the phase of integrating hospital-wide information systems centered on electronic health records (EHRs). The U.S. government has also actively promoted hospital informatization; the American Recovery and Reinvestment Act signed in 2009 allocated approximately $19 billion in fiscal funds to incentivize the adoption of EHRs, thereby creating conditions for regional information sharing. It also proposed the establishment of a National Health Information Network and launched specialized projects to promote interoperability among healthcare institutions’ information systems by establishing technical standards and rules. The United Kingdom implements a national public healthcare system and has therefore adopted a fully government-led model for establishing EHRs. The UK government signed contracts worth over £6 billion with multiple multinational health information organizations to build the infrastructure for a nationwide health information network. In China, the "Outline for the Development of National Health Informatization (2003–2010)" issued in 2002 set forth goals for constructing medical service information systems and regional health informatization. Furthermore, the 2009 healthcare reform plan designated the establishment and use of shared health information systems as one of the "eight pillars" supporting the deepening of healthcare system reforms. As can be seen from a series of subsequent policies (Table 8), the government will continue to vigorously promote and invest in the construction of regional medical platforms, while the establishment of hospital management and clinical information systems serves as the foundation for realizing regional informatization.
Based on the current state of hospital informatization in China, most hospitals have already established Hospital Information Systems (HIS). The primary trend moving forward will be the integration of HIS with medical insurance systems and various clinical application systems. On the other hand, the penetration rate of Clinical Information Systems (CIS) remains low. According to statistics from 1,067 hospitals compiled by the Professional Committee on Hospital Information Management of the Chinese Hospital Association between 2012 and 2013, the implementation rates of all clinical information systems—except for inpatient nurse workstations, ward physician workstations, and outpatient/emergency physician workstations—were below 50%. Furthermore, data from this survey regarding the issues hospitals believe should be prioritized for resolution through information technology show that "improving medical quality, ensuring medical safety, and reducing medical errors and accidents," "enhancing clinical operational efficiency to support hospital process reengineering," and "reducing hospital operating costs and supporting hospital cost accounting" ranked as the top three choices, accounting for 83%, 81%, and 69% respectively. This indicates a strong demand for CIS among hospitals, suggesting that CIS construction will continue to advance rapidly.Secondly, medical informatization in China faces the problem of "information silos." Hospitals often fail to conduct sufficient self-assessments and unified planning before selecting and implementing systems, resulting in poor coordination among internal systems and an inability to fully leverage their potential. Systems across different hospitals operate independently, lacking standardized electronic medical records and business processes. From the vendor perspective, the compatibility of developed information systems is relatively poor. These factors will create difficulties for the future interconnectivity of hospitals within Medical Consortia and for the ultimate realization of regional medical informatization. China’s hospital informatization efforts should fully leverage the advantages of late development to avoid the challenges of later-stage integration caused by inadequate planning.Thirdly, the application of information systems in most Chinese hospitals is still limited to basic financial and billing processing, with significant room for expansion in both breadth and depth. As shown in Figure 15, although CIS components such as Picture Archiving and Communication Systems (PACS), Electronic Medical Records (EMR), and Surgery and Anesthesia Information Systems are of great significance to clinical care and decision-making, their current adoption rates remain low. Additionally, Chinese hospitals, particularly large tertiary Grade A hospitals, have accumulated substantial amounts of clinical and management data over the past decade. Deep mining, analysis, and utilization of this data could be applied to the design of clinical workflows and the assessment of financial and clinical risks, thereby enhancing hospital decision-making and management. However, few hospitals currently employ intelligent analytical technologies, such as data warehouses, to support decision-making.
Appendix: Comparison Table of Current Major Tax Policies for For-Profit and Non-Profit Medical Institutions
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