Experts doubt financing of public hospitals

PUBLISHED : Thursday, 06 March, 2008, 12:00am
UPDATED : Thursday, 06 March, 2008, 12:00am

A long-awaited plan to reform the mainland's health-care sector will be released for public consultation, but medical experts doubt consensus can be reached on how to finance public hospitals.

'From last year, the State Council has organised forces to look into the question of deepening the reform of China's health-care system, and a preliminary plan has been made. It will be released for public consultation,' Premier Wen Jiabao said at the National People's Congress opening ceremony yesterday.

China has been painstakingly mapping out a health-care reform plan since a government think-tank declared the system a failure almost three years ago.

Officials and advisers have been tight-lipped about the consultation and drafting process, and the public has never had a chance to take part.

The report delivered by Mr Wen yesterday did not give a date for the controversial plan's unveiling, but provides the gist of what is ahead.

Mr Wen said the government would earmark 83.2 billion yuan (HK$91.2 billion) for the health-care sector this year, up 25 per cent compared with actual spending last year.

Much of the increase would be channelled to finance medical services in the countryside and the grass-roots level in cities. Mr Wen said China would have to maintain the non-profit nature of public health care.

Mr Wen said the government would also expand medical insurance schemes for urban residents and double its subsidies for the rural co-operative medical insurance scheme from 40 yuan per head to 80 yuan in two years.

Other measures included expanding free immunisation schemes and strengthening community-level and rural medical services, as well as capping the prices for basic medicines designated by the government. The virtue of the measures is indisputable, but analysts are keeping a close eye on what Mr Wen meant by experiments for reforming public hospitals.

A sticking point in the changes is how the government should reform and finance so-called public hospitals, which are all cash hungry.

Gordon Liu Guoen, chair of the department of health economics and management at Beijing University's Guanghua School of Management, said there had never been a consensus among government advisers as to how to finance public hospitals.

'It is not clear what public hospital reform means here,' Professor Liu said.

The Ministry of Health is pushing to force hospitals to hand in their income to the government, which would then allocate funding to them.

Speaking on the sidelines of the Chinese People's Political Consultative Conference opening ceremony earlier this week, Health Minister Chen Zhu confirmed that this would be the direction of the public hospital reform.

But such a proposal faced strong resistance from the hospitals, analysts said.

'The government will need the support of hospitals to carry out the hospital reform, but medical practitioners are sidelined, and the proposal is written by outsiders [of the health-care sector],' said Chen Yude , a health policy and management professor at Peking University.

'How can the government finance public hospitals?' he said. 'Each hospital involves hundreds of millions of yuan, and there is no proper evaluation standard for hospital operating costs.'