Private hospitals shoulder hopes of revamping China's ailing medical system

17:10, March 11, 2010      

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Chinese Premier Wen Jiabao lit up public expectations for an improved medical system that charges less and offers easier access to services by encouraging development of private hospitals.

The high cost and poor availability of health services have been among the loudest complaints of the Chinese public, prompting the central government to launch healthcare reform, with the most difficult part being the reforming of government-run hospitals.

In a government work report to the annual parliament session last week, Wen promised to "support the use of non-government capital to run medical and healthcare institutions," a signal of creating a more open medical market that is expected to alleviate long-festering healthcare problems in the populous country.


"Why it is so difficult for ordinary people to see a doctor?" asked Wang Faxue, who lost 2.5 kilograms in a week while accompanying his 70-year-old mother to hospitals for lung cancer treatments last month.

Wang, a farmer in Hebei Province in northern China, sought help from his relatives in Beijing for accommodations so he could catch the first bus in the morning to hospital.

"The registration hall is like an asylum as many people slept on the ground overnight to grab registration opportunities," he said, recalling the first visit to Peking Union Medical College Hospital (PUMCH), one of the most famous public hospitals in Beijing.

They got up before dawn but still stood at the end of long queues that extended from the hall to the yard of the hospital.

Wang had visited nearly all top public hospitals in the city and ended up paying 300 yuan (43.9 U.S. dollars) to a scalper, almost 20 times the normal registration fee, so they could see a renowned doctor in PUMCH.

The old woman died earlier this month.

Statistics of the Ministry of Health show China had about 14,000 public hospitals by November 2009, which accounts for about 90 percent of the overall medical service market.

Out-of-pocket patient costs for medical services increased by 200 times in China between 1978 and 2005, but the number of hospitals and medical staff grew by 76 percent and 75 percent respectively during the period, according to research by Zhou Qiren, a professor with Peking University.

Serious overcrowding at city-level public hospitals where the treatment is perceived as better is a reflection of the widening gap between supply and demand in China's medical market.


Wang Xianghua, a farmer from Hebei Province, always worried about getting sick some day.

"A cold will cost me at least 200 yuan if I see a doctor in hospital," said the 54-year-old man. He only earns some 6,000 yuan after a full year's hard work in the farmland.

Wang has witnessed some families in his village ruined by illness. A serious disease could easily drag people into impoverishment if the patient is not recruited into China's medical insurance system.

Public hospitals in China enjoyed full government funding before 1985. The situation has changed since then as public hospitals embarked on a market-oriented reform along with the deepening of the reform and opening up policy adopted in late 1978.

Analysts say the market-oriented reform has improved the medical service to some extent. But the fact that doctors and hospitals peddling expensive drugs and prescribing unneeded treatments to supplement salaries and revenue have resulted in soaring medical expenditures on the part of patients.

Wen has said the hospital system's reliance on profits from drug prescriptions has to be changed to solve the problem of high medical costs.

China's State Council passed a long awaited medical reform plan in January 2009 which promised to spend 850 billion yuan by 2011 to provide universal medical service to the country's 1.3 billion population.

Sixteen cities have been selected to pilot the public hospital reform this year, the most difficult part of the entire health care reform.


In his report on Friday, Wen called for equal policy treatment to private hospitals, especially in the fields of market admittance and granting medical insurance status.

"The rational allocation of medical resources would not be achieved if non-government capital is kept out of the medicare market," said Gu Xin, a professor of Government Management College of Peking University.

He believes that introducing hospitals of different ownerships into a fair market will promote reasonable allocation of medical resources, a recipe believed to be effective in appeasing public complaints.

"If these become true, private hospitals will surely have a bright future," said He Guohao, special assistant to the president of Xiamen Chang Gung Hospital in Fujian Province.

Being the first hospital funded by a Taiwan firm in the Chinese mainland, Chang Gung has successfully built a reputation, thanks to its patient-oriented services and reasonable charges since it began operating in 2008.

"Doctors' incomes are not based on the prescriptions of drugs, but on the number of patients they treat and the quality of service," He said.

The hospital was approved as a healthcare insurance institution last year, just like many other public hospitals in the city, allowing patients to receive reimbursement for a major part of their medical fees.

The measure has boosted the flow of patients to increase by five times in just a year, He said.

In addition, Chang Gung's doctors could apply for evaluation of professional qualifications, a common practice in the mainland to determine people's work ability.

"Not all private hospitals are so lucky. Many others may face great troubles in development without the qualification of medical insurance or evaluating doctors' professional levels," He said.

However, Shi Xijie, president of Guangji Hospital in Jiangxi Province, was pessimistic about the prospect of private hospitals.

"I don't think private hospitals could enjoy equal treatment as public ones in a short time. At least, it takes time to win public trust."
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