Health care reform in China to make life easier for patients, not hospitals

The central government has made cutting the cost of medical bills a key element of this year's health care reforms, but the plan says little new about how to alleviate the financial woes of urban public hospitals.

Beijing's main goals in health care reform this year show its resolve to reduce patients' medical bills, but the most daunting task - to sort out the finances of public hospitals in the cities - seems as remote as ever, analysts say.

Cost controls and increased health insurance subsidies were among 26 tasks in the new State Council's guidelines on "making new breakthroughs" in health care. The document represents the latest instalment in Beijing's four-year-old effort to overhaul of the country's expensive and inaccessible health care system. The massive reform stands as a major test for Premier Li Keqiang , who oversaw its launch before his installation as premier in March. The State Council - Li's cabinet - has ordered local governments to play a greater role in the overhaul.

The plan calls for maintaining high rates of public health insurance coverage and increasing reimbursements for medical bills. It would raise public health insurance subsidies for rural residents and non-employee urban residents by more than 16 per cent to 280 yuan (HK$350) per year.

The State Council spent more than 1 trillion yuan in the first three years of the reform, which was originally projected to cost 850 billion yuan. Nearly half of that has been spent on expanding public insurance.

"The fiscal income [from taxes and fees] is limited, but spending is increasing," said Wang Hongzhi , a health care specialist at management consultancy Allpku. "So, now you see a series of measures to bring down the medical costs via payments from health insurance."