JANUARY

CHINA
disease care, improve health care quality, and contain rising costs. Hospitals in the same medical alliance use
the same electronic health record system, and results of labs, images, and diagnoses can be shared easily within
the alliance.
There are three main medical alliance models (Jiang et al., 2014). Hospitals in the Zhenjiang model have only
one owner (usually the local bureau of health). Those in the Wuhan model do not belong to the same owner,
but administration and finances are all handled by one tertiary hospital. Hospitals in the Shanghai model share
management and technical skills only; ownership and financial responsibility are separate.
What is the status of electronic health records?
Nearly every health care provider has set up its own electronic health record (EHR) system. Within hospitals,
EHRs are also linked to the health insurance systems for payment of claims with unique patient identifiers
(citizenship ID). However, EHR systems vary significantly by hospital and are usually not integrated or
interoperable. Patients often have to bring with them a printed health record if they would like to see doctors in
different hospitals. Even if hospitals are owned by the same local bureau of health or universities in the same
region, different EHR systems may be used. Patients generally do not use EHR systems for accessing
information, appointment scheduling, secure messaging, prescription refills, or accessing doctors’ notes.
How are costs contained?
Health expenditures have risen significantly in recent decades as a result of health insurance reform, population
aging, economic development, and health technology advances. Health expenditures increased from CNY510
(USD139) per capita in 2003 to CNY3,234 (USD884) in 2013 (China National Health and Family Planning
Commission, 2014). The key cost-containment strategy is reform of provider payment. Prior to the recent
introduction of DRGs, global budgets, and capitation in 2009, fee-for-service was the main provider payment
mechanism and consumer- and physician-induced demand increased costs significantly. Global budgets in
particular have been used in many regions, since these are relatively easy for authorities to implement. As noted
above, government encourages use of community and township hospitals over more expensive care provided
in tertiary hospitals. Hospitals compete on the basis of quality, level of technology, and copayment rates.
In township, community, and county hospitals, a campaign of “zero markups” for prescription drugs was
introduced in 2013 (see below).The National Development and Reform Commission places stringent supply
constraints on new hospital buildings and hospital beds, and the National Health and Family Planning
Commission controls the purchase of high-tech equipment such as MRI scanners.
What major innovations and reforms have been introduced?
Sales of prescription drugs have been a major revenue source for hospitals, which are allowed a 15 percent
markup, and providers have strong financial incentives to induce demand for more and expensive drugs. Prices
for services, on the other hand, are rather low, in accordance with traditional health practice in China. However,
as of 2015, 3,077 public county hospitals and 446 public city hospitals were participating in a governmentfinanced
pilot program to eliminate markup of prescription drug prices. At the same time, 224 prefectures and
cities in 21 provinces adjusted prices of health care services upward to reflect true costs. The zero-markup policy
has been found to have significantly reduced total medical spending (Fu and Yang, 2013).
Another important health reform was the introduction in 2015 of special health insurance for severe diseases,
such as cancers, kidney disease, and acute myocardial infarction (AMI), which supplements the regular publicly
financed schemes. Severe-disease health insurance provides reimbursement beyond the rather low
reimbursement ceilings. It is also mostly publicly financed, particularly for urban resident basic insurance and the
rural new cooperative medical scheme, and administrated by local health authorities. However, private
commercial health insurance companies, given their experience in providing complementary insurance, are
heavily involved as well. By 2017, severe-disease insurance is expected to be available throughout China.
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