JANUARY

CHINA
medical spending exceeding annual caps, as well as individual premiums for publicly financed health insurance.
In 2013, 63.6 million people (approximately 5% of the Chinese population) received such assistance for health
insurance enrollment, and 21.3 million people (1.6% of the population) received funds for direct health expenses
(China National Health and Family Planning Commission, 2014).
There are other financial assistance programs to help with unreimbursed emergency department expenses and
other health expenses. Mostly these are funded by local governments.
How is the delivery system organized and financed?
Primary care: Primary care is delivered mainly through village doctors and health workers in rural clinics,
general practitioners (GPs) in rural township and urban community hospitals, and secondary and tertiary
hospitals. Village doctors, who are not licensed GPs, can work only in village clinics. In 2013, there were
1.08 million village doctors and health workers (National Health and Family Planning Commission, 2014).
Although rural patients are encouraged to seek care in village clinics or township hospitals and urban patients
in community hospitals—as such providers are associated with lower cost-sharing rates—residents can also see
any GP in upper-level hospitals directly.
Registration with a GP is not required and, except for the very few areas that use GPs as gatekeepers, referrals
are generally not necessary to see outpatient specialists. In 2013, China had 194,310 licensed and assistant GPs
(including preventive medicine), representing only 8.5 percent of all licensed physicians and assistant physicians
(National Health and Family Planning Commission, 2014). Except for village doctors and health workers in the
village clinics, GPs rarely practice solo or through partnership but instead work in a hospital with nurses and
nonphysician clinicians. Village clinics in rural areas receive technical support from township hospitals.
Fee schedules for primary care are regulated by local health authorities and the Bureaus of Commodity Prices.
Village doctors and health workers in the village clinics receive income through reimbursement of public health
services (e.g., immunizations and chronic disease screening) and clinical services, as well as through markups of
prescription drugs and government subsidies. Incomes vary substantially by region.
GPs at hospitals receive a base salary along with activity-based payments (e.g., patient registration fees,
surgeries performed). With fee-for-service still the dominant payment mechanism for hospitals (see below),
hospital-based physicians have strong financial incentives to induce demand. It is estimated that wages
constitute only one-quarter of physician incomes; the rest is thought to be derived from practice activities.
In 2013, 48 percent of outpatient revenues and 39 percent of inpatient revenues were from prescription drugs
provided to patients in tertiary hospitals (National Health and Family Planning Commission, 2014). Care
coordination is generally not incentivized.
Outpatient specialist care: Outpatient specialists are employed by and usually work in hospitals, through which
they obtain their practice licenses. Although practicing in multiple settings is being introduced in China, most
specialists practice in one hospital only. They receive compensation in the form of base salary and activity-based
payments from hospitals. Patients can usually see outpatient specialists without GP referral.
Administrative mechanisms for direct patient payments to providers: Patients pay deductibles and
copayments to hospitals at the point of service. Hospitals directly bill insurers the covered payment at the same
time if the payment mechanism is fee-for-service or a diagnosis-related group (DRG) system. Hospitals receive
annual lump-sum payments under global budgets or capitation.
After-hours care: Because village doctors and health workers often live in the same community as patients,
they voluntarily provide some after-hours care when needed. Rural township hospitals and urban secondary and
tertiary hospitals have emergency rooms or departments (EDs) where both primary care doctors and specialists
are available, minimizing need for walk-in after-hours care centers. In EDs, nurse triage is not required and there
are few other restrictions, so people can simply walk in and register for care at any time. (Urban community
hospitals often do not provide after-hours care, given the availability of secondary and tertiary hospitals.) ED use
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