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Challenges seen in med-care plan

SHANGHAI hospital chiefs have expressed their support for the goals of the central government's new health care reform program.

But in interviews yesterday with Shanghai Daily, they also voiced concern, especially over a measure that would significantly reduce the price of medicines - now a key profit center.

Though the reform plan would replace the revenue shortfall with government subsidies, some officials worried whether the funding would be enough. And some said that rather than providing handouts, the government should ease regulations and allow hospitals to shift toward a more market-based mode of operation.

Several of those interviewed will be part of the local health community's effort to translate the general state guidelines into a detailed program of specific medical practices.

The central government plan, announced early this week, calls for an investment of 850 billion yuan (US$124 billion) through 2011 to ensure that 90 percent of China's citizens are covered by basic health care. And by 2020, China intends to have a basic health care system that can provide "safe, effective, convenient and affordable" health services for all of its 1.3 billion citizens.

One of the main complaints among patients that the plan seeks to address is that doctors often prescribe high-priced and often unnecessary medications.

The national health care reform will require hospitals to gradually reduce the price of medicines to their actual purchase cost. To offset the loss of income, hospitals will be able to increase treatment fees, which are now set by regulators. And the government will increase its funding for hospitals to pay for construction of medical care facilities, equipment, doctor training and other expenses.

Making up the revenue shortfall will be no small matter. Some 40 to 50 percent of the income generated by state-owned hospitals comes from selling medicines, which can be marked up by a maximum of 15 percent.

"It is impossible for the government to make up all the losses that will come from cutting pharmaceutical income," said Dr Liu Zhongmin, president of Shanghai East Hospital, which posted 700 million yuan in total revenue last year.

At present, government investment accounts for only 5 percent of the annual income of local district and city-level hospitals, which are the dominant providers of health services.

Officials from Shanghai Health Bureau said authorities will work out a health plan that is consistent with the local economy, medical resources and patients' diversified requirements for health services.

The government, medical schools and the Shanghai Academy of Social Sciences will all take part in drafting a local reform blueprint.

"Shanghai has some of the best medical resources in the nation and the highest medical insurance coverage," said Song Guofan, a health bureau official. "Our plan will focus on the reasonable use of various levels of medical resources to give patients good and affordable service while ensuring the development of hospitals."

The bureau and other health care leaders are also considering setting up regional hospital groups comprising one or two big hospitals coupled with a batch of small hospitals in specific areas.

Patients would be able to enjoy discounts by visiting lower-level hospitals and could be transferred to high-care facilities if their medical condition warranted. Now, many patients use the large hospitals for all illnesses.

"Last year our outpatient departments served 8,000 patients a day, many suffering from small diseases like fevers and colds," said Fan Guanrong, president of Renji Hospital, one of the city's biggest and busiest.

Hospital officials are also clamoring for the ability to set higher treatment charges.

"Treatment prices haven't changed since 1997," Fan said.


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