China unveiled a healthcare blueprint for the next decade a few years ago. By 2020, China is expected to have a basic healthcare system that can provide healthcare services to urban and rural citizens.

When China began its economic reform in the 1980s, healthcare switched to a market-oriented system. Hospitals received little government funding and were forced to generate income by marking up drug prices. As a result, personal spending on medical services doubled from 21.2 percent in 1980 to 45.2 percent in 2007.

When the new reforms began in 2009, basic healthcare was defined as a public service for all citizens. The Chinese government invested about 124 billion USD from 2009 to 2011 in these reforms. They established a health insurance system that provides coverage to all citizens, and other reforms continue. In the next five years, China will focus on a national healthcare information platform, public health management, health insurance, basic healthcare and drugs management.

Hospital HIT reforms

The Chinese government began investing in a Hospital Information System (HIS) several years ago. In 2008, data from the Ministry of Health shows that 80 percent of hospitals implemented HIS. In the next five years, they will invest more in a national Electronic Medical Record (EMR) system.
Chinese EMR systems have developed slowly over the past few years because of the absence of a single standard for all EMR system providers. As a result, hospitals are unable to share information or provide qualified health services to patients.

To support EMR systems, hospitals will invest more in data centers, IT outsourcing, and mobility. Cloud services would be an attractive solution for hospitals looking for flexible computing and managing EMR systems effectively. Mobility solutions would enable doctors to receive and update information anywhere and at any time.

Health insurance reforms
To achieve near-universal health insurance coverage by the end of 2011, China created two insurance programs for low-income citizens: the Urban Resident Basic Medical Insurance (URBMI) and the New Rural Cooperative Medical Scheme (NRCMS). In addition, many Chinese who work for private or state-owned enterprises are eligible for the Urban Employee Basic Medical Insurance (UEBMI).
According to the Chinese Ministry of Health Information Center, by 2009, 0.8 billion citizens had joined NRCMS and all urban residents joined URBMI or UEBMI. However, there is a large gap between NRCMS and URBMI. Both the URBMI and NRCMS programs are funded by the local government and individuals, but the investment level differs. Under the UEBMI program, enterprise employers contribute at least 6 percent of an employee’s annual salary to the program. In 2009, the average local government NRCMS investment per person per year was about USD 25.00, which is much lower than the investment level for UEBMI. Meanwhile, URBMI and NRCMS investments depend on the wealth of each region. East China is wealthier than West China, so this creates an imbalance in health insurance and the imbalance does not compliment the core principle of healthcare reform – public service.

China needs to invest in healthcare infrastructure and make reforms to applicable regulations and policies that will enable them to manage their finances themselves. As a step in this direction, the government has outsourced the administration of some forms of health insurance to commercial players, but much more needs to be done to fill the gap.

Primary care reforms

China’s hospitals are usually grouped into three categories. Class I & II hospitals are smaller and have fewer staff than class III hospitals. The criteria for differentiation are the number of beds, facilities and the clinical staff level. Patients prefer to visit class III hospitals to take advantage of the better facilities and services. As a result, the class III hospitals are overburdened and unable to deliver qualified services to all patients. It is for patients to have to wait for hours for a consultation with a doctor.

CHCs (Community Health Centers) were established to improve urban medical care, and small hospitals were set up for rural areas to improve healthcare standards and coverage. The Chinese government has been testing the CHC model since 2006 when they established about five to eight experimental centers in various cities, and then promoted them across the whole country. Today, most tier 1-3 cities have CHCs, which are managed by big hospitals to balance resources. In rural areas, the government continues to invest in small hospitals and clinics.

Another challenge China faces is a lack of General Practitioners (GPs) to support CHCs and small rural hospitals. Medical education in China focuses on specialized medicine rather than general medicine. Upon graduation, new doctors work in one department, and have no opportunities to train in new areas. As a result, most doctors working at CHCs are not GPs and may be unable to diagnose and treat many common diseases.

Furthermore, China is also testing diagnosis-related groups (DRGs) and clinical pathways to manage health services and improve service quality. Both of these are expected to control medical service costs.

Looking ahead…

The increasing aging population is forcing the Chinese government to increase investment in the healthcare system. China has already made progress since reforms were initiated in 2009, but it still faces many challenges. With investments from central and local governments, nongovernmental organizations, and private organizations, progress will be gradual.

China’s health system is facing a critical transition moment. Some of the government’s reforms, especially those targeted at the imbalance of health insurance and the establishment of a primary care system, should significantly increase access to care. Other reforms, such as improving GP training and relying less on drug markups to fund hospitals, will further improve the quality of healthcare in China.

Ben Zhou leads the Dell Services Public Sector in Greater China. He is a senior executive with a record of integrity and excellence in management, IT services and consulting. As a MD and IT professional, Ben served executive roles and key IT professional roles in multiple organizations.