China Healthcare Reform: More Accessible, Quality and Efficient

In the beginning of the Year Ox, the State Council announced an investment plan of 850 billion yuan (~$124 billion) for a national healthcare system reform in China, which will be aimed at "solving pressing problems that have caused strong complaints from the public".

On the April 6th, three months after the initial announcement, a high-level reform roadmap was unveiled to outline the objectives and focus areas, along with a more detailed implementation plan for the next three years. According to Ministry of Finance of China, in the next three years, the big pie of RMB 850 billion will be sliced into two major chunks: 2/3 goes to the end-users by improving the healthcare insurance coverage and the other 1/3 goes to invest in the healthcare providers to improve their capabilities and service level.

There are many promising things to expect, one of which is the makeover of small clinics and transforming some state-owned hospitals into private-held to improve the whole community healthcare presence. In China, there's a long-standing challenge that people prefer to see a doctor in large hospitals, usually of Tier 2 or 3 state-owned ones, no matter how serious the illness is. There's a missing link of family doctors or clinicians that can help manage end-users medical history and make the effective referral. This missin link worsens the increasing pressure on hospital resource allocation. Hot big hospitals have to allocate more resources to serve regular outpatients, but still not being able to meet the demand surplus. Small clinics and community hospitals don't get attention and credibility from end-users and lose funding and talents accordingly. That's the vicious cycle.

In summary, after the national economic reform in the 1980s, China's healthcare system got a chronic malfunction. All kinds of social germs, such as increasingly expensive medicine cost and insurance coverage disparity between urban areas and countrysides, make the whole system helplessly inefficient.  It has reached such a tipping point that China has to take this chance to conduct a nation-wide overhaul to make the healthcare system more accessible, quality and efficient.

-- Emma Zhu, Strategist, frog Shanghai