The World’s Largest Healthcare Umbrella
The amount Song paid herself was manageable for her family, and they were able to continue construction of their new home as planned and send remittances for her grandson’s college education in full and on time. In the past, such health crises in the village would have plunged whole families up to their necks in debt.
According to Xu Debin, director of the Rural Cooperative Medical Care System Office of the municipal government of Lianyungang, the previous scheme was primarily funded by members’ contributions, and subsidies from the government were much lower. It sustained a lower payment ratio, meaning less relief for those needing expensive treatment. Xu was involved in the implementation of the new scheme since trials began in 2003, and worked on it in different regions in the province. Today, he is a member of the expert panel of a project to reform its payment model and promote information technology use, funded by a World Bank loan and British donations.
Xu has conducted several surveys on local residents’ need for medical services. Results show that they made 2.5-3 visits to the doctor every year, and that eight percent of them had experience as inpatients. The rate is lower among rural dwellers. A 2005 research found that farmers in Lianyungang saw doctors 1-1.5 times a year, and only 5 percent had been hospitalized. “This indicates that when falling sick half of rural residents would choose not to see a doctor or avoid hospitalization when their condition calls for it,” Xu said.
These rural figures edged up to be on par with those in cities after the New Rural Cooperative Medical Care System was introduced. “The increase of average rural incomes certainly plays a role, but more government funding is the biggest cause of the change. Medical services are no longer out of the reach of farmers,” Xu said.
Under the New Rural Cooperative Medical Care System every member pays RMB 60 per year and receives RMB 70 from the local government and RMB 70 from the central government for the premium, in comparison with the RMB 10 from individuals and RMB 20 from the state when the system was introduced a decade ago. The result was that payouts also soared. The maximum reimbursed sum was raised from RMB 10,000 to the current RMB 150,000 for inpatients, and no ceiling is set for those diagnosed with severe diseases. Inpatients can have 70 percent or more of their expenditures recovered. The category of severe diseases is expanding steadily, including 16 diseases such as congenital heart disease, leukemia, uremia and cancers, with another 20 diseases poised to join them by the end of this year.
In Lianyungang City 99.58 percent rural residents are enrolled to the New Rural Cooperative Medical Care System, eight percent higher than the national average. To cater to the increasing number of patients, local medical institutes are becoming better equipped and staffed. Punan Central Hospital, for instance, boasts 30-odd physicians and surgeons of a variety of specialties who have sophisticated equipment at their disposal such as an automatic radiography X-ray, a digital ultrasound scanner and an automatic biochemical analyzer. Now, its inpatient wards are furnished and equipped as well as those in larger city hospitals, but the fees are much lower.
According to National Bureau of Statistics, during the past three years the central budget allotted RMB 63 billion to improve the facilities and services of 33,000 county-level hospitals. Monitoring by the Ministry of Health confirms the reimbursement rate for inpatient costs under the New Rural Cooperative Medical Care System climbed from 48 percent in 2008 to 70 percent in 2011, equal to that of urban residents.
Curbing Excessive Drug Sales
Starting from July 1, 2012, the Friendship Hospital in Beijing removes mark-ups on the prices over 1,500 drugs. Such a reform has been on trial in other areas for a long time. The move signals the end of the half-century practice whereby public hospitals are allowed to add 15 percent to the wholesale prices of the drugs sold to patients.
This practice is the major cause of expensive healthcare in China. Because registration fees were very low, ranging from a few to a dozen yuan, hospitals were forced to seek extra income from drug sales and doctors were known to over-prescribe medicine for profits. Moving away from this practice means much cheaper medical bills. Furthermore, in August 2009, China started to promote a national basic medicine system and purchasing prices of drugs have since been cut by an average of 30 percent.
This will greatly help cut the financial burden on patients. According to statistics of the China Health Insurance Research Association, in 2010 the per capita cost for outpatients was RMB 166.8 and that for inpatients was RMB 6193.9, equivalent to one third of the annual per capita income of urban residents and surpassing annual per capita income of rural residents.
