China's capital city Beijing launched landmark medical reform on Saturday, separating hospital services from drug sales at public hospitals.

The overall price of drugs is expected to fall, while the price of hospital services will increase, thus, the total cost for seeing a doctor should remain almost the same for patients.

Purpose

The reform is designed to improve hospital services and reduce a tendency by doctors to order expensive tests.

Incomes at public hospitals have mainly come from selling drugs and ordering medical tests using expensive equipment.

This has led to problems with doctors overprescribing medication and ordering unnecessary tests.

Certain doctors have been found colluding with drug agencies to get kickbacks by overprescribing drugs from certain pharmacies.

Prices adjustment

To curb overprescriptions, protect patients' interests and increase doctors' incomes, Beijing authorities have decided to improve the services fee structure and reduce drug prices by 20 percent.

The reform covers 435 medical services in more than 3,600 medical institutions in Beijing, ranging from top-level hospitals to village clinics.

Medical affairs fees have been introduced to replace the separate registration, diagnosis and treatment fees. Compared to only 5 to 14 yuan in registration fees in the past, the medical affairs fees for outpatients now range from 50 to 100 yuan (7.2-14.5 USD) depending on the doctor involved, with as much as 40 yuan being reimbursed through the medical insurance system.