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Thursday, February 01, 2001, updated at 09:41(GMT+8)

Reforms Help Cut Medicine Prices

Many people seeing doctors at Jishuitan Hospital in Beijing have been getting a pleasant surprise lately -- they are paying less for their prescriptions.

If you were to ask the pharmacist behind the little window, you would find the hospital reduced the prices of 20 most frequently used medicines, such as penicillin, by an average of 18 per cent on the first day of the new century.

These medicines were bought through public bidding, which allowed the hospital to get them at a cheaper than usual price. The other 12 hospitals involved in the bidding also reduced their prices on the same day.

Paying less for better medical care services is a dream that has taken three years to come true, said Gao Zuozhi, director of the Beijing Municipal Economic Restructuring Office.

According to Gao, the municipal Public Health Bureau is busy classifying the city's 5,000-odd medical care organizations, dividing them into profit-oriented and none-profit categories, each category subject to different fiscal, taxation and pricing policies. The classification work is expected to be completed no later than next July.

Non-governmental medical care organizations, which are emerging in recent years, are being encouraged to compete with governmental ones, and profit-oriented ones to compete with non-profit organizations, because the city's new medical care system allows patients, for the first time ever, to choose their own hospitals, doctors and pharmacists.

The country's old welfare medical care system allowed patients to see doctors only at their units' contracted hospitals. Otherwise, the units would not be responsible for the expenses.

By introducing this competition mechanism, one expects to see improved medicare services at controlled costs, said Gao.

Also, hospitals and pharmacies will be separate organizations, and filling prescriptions will no longer be a major income source for hospitals. The dispensaries of hospital clinics will gradually be changed into independent drug retailers.

All non-profit-oriented hospitals with more than 200 beds will not be allowed to keep any profits from the sale of prescription medicines. Instead, they will be required to submit such profits to their superior administrations, which will see that the funds go to local social security foundations, which will then reimburse the hospitals according to an established formula.

Public bidding should help ensure that hospitals maintain no under-the-table connections with drug producers.

The pioneer move of Tiantan Hospital last August resulted in a decrease of as much as 15 per cent in the prices of 913 medicines they purchased through bidding, which will annually save patients 13 million yuan (US$1.6 million) in medical costs.

The move was quickly followed by thirteen other major hospitals in Beijing, including the above-mentioned Jishuitan Hospital.

Source: China Daily

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Many people seeing doctors at Jishuitan Hospital in Beijing have been getting a pleasant surprise lately -- they are paying less for their prescriptions.

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