STORY HIGHLIGHTS
In 2009, the Chinese government
launched healthcare reforms to fix its
health service system which was
plagued by high costs and poor quality
of care.
With support from the World
Bank/DFID -funded Rural Health
Project, Henan Province is undertaking
hospital reforms in rural public
hospitals to tackle these problems.
The reforms reduced medical expenses,
improved quality of care and
contributed dramatically to patient
satisfaction.
Xiao Huaqing, a pediatrician at the
People’s Hospital of Yiyang County,
Henan Province in central China, now follows standardized clinical protocols to treat his
patients.
Called a “clinical pathway”, it is literally a computerized checklist that serves as a
roadmap for both caregivers and patients throughout their treatment. It lists everything
from what tests a patient can expect before surgery to how soon he or she should be
discharged from hospital and most importantly, how much each treatment would cost.
Flexibility is built into the clinical pathways, still giving doctors discretion over elective
services based on different patients’ condition. But case payment is fixed, regardless of
whether electives services have been provided.
“It has curbed overtreatment and reduced patient out-of-pocket spending,” said Dr. Xiao.
Yao Xinglian, a villager in Yiyang County, brought her one-year-old son to the hospital for
a cure of his bronchitis. When she was checking her son into the People’s Hospital of
Yiyang County, she was informed that her son would be treated via Clinical Pathway A,
used for not- so-serious condition of bronchitis. The total cost would be RMB 620
(US$100). And she could pay after her son recovers. It was a big change from the past.
“Before we had to pay a deposit before hospitalization and had no idea how big a bill
we’d get when we were about to leave hospital,” she said. “But now we know exactly
how much we’ll need to pay even before being hospitalized and can also make payment
later.”
Curbing overtreatment
In 2009, the Chinese government launched healthcare reforms to fix a dysfunctional
system that was plagued by high costs and poor quality of care. A serious problem back
then was over-prescription and over-treatment.
Hospitals were allowed to charge a 15% mark-up on the price of medicines, which
induced physicians to prescribe more drugs and to choose more expensive ones.
Besides, a fee for service system, in which hospitals were reimbursed for each service
they provided, regardless of the quality of care, encouraged doctors to perform
unnecessary tests and treatments.
To address such problems, Henan Province is undertaking a comprehensive hospital
reform in rural public hospitals, with support from the World Bank/DFID-funded Rural
Health Project.
The reform includes adoption of computerized clinical pathways, a shift from fee-for
service to case-based payment, performance-based payment for care providers, and IT
based monitoring on service quality of healthcare facilities.
Unnecessary services for clinical-pathway patients were slashed, saving money for both
the patients and their insurers.
Since the reform began in 2009, the People’s Hospital of Yiyang County, for example, has
seen patients’ hospital stays reduced by over a full day while their medical expenses
decreased by 5-8 percent. But in the meantime, the hospital’s revenues increased 8.7
percent since improved health services drew more patients.
Before we had to pay a deposit before hospitalization and had
no idea how big a bill we’d get when we were about to leave
hospital. But now we know exactly how much we’ll need to pay
even before being hospitalized and can also make payment
later.
Xinglian Yao
a villager in Yiyang County
Performance-based payment for care providers
A part of the increased revenues are distributed to hospital staff as rewards based on
their performance at work.
“We have clear standards in each category to make sure our staff will be compensated
fairly,” said Lu Panxia, Vice President of the People’s Hospital of Yiyang County. “This
incentivizes the team to work harder and think harder of how to improve their day-to-day
work.”
“They’ve become very active in participating in and facilitating the reforms in their
hospitals,” says Liu Gendang, Deputy Head of Health Bureau of Yiyang County.
Liu says after the performance-based system was set up, medical staff in his county has
seen their monthly salary increased RMB 330 (US$55) on average.
Service quality monitoring
With a hospital-wide IT platform that records each staff’s performance, monitoring is now
in real-time and helps prevent cases of malpractice.
Regular “health checks” are performed by third-party organizations on all the reforming
hospitals in Henan Province, ensuring that their services are transparent and on route of
continuous improvement.
The reforms contribute dramatically to patient satisfaction. “Our patients are getting
better service and paying less – of course they are happier. The relationship between
them and us hospital staff is also becoming closer,” Dr. Xiao says. “They know what they
can expect of us, and what we expect of them.”
No medical disputes occurred since the reforms and the satisfaction rate among
hospitalized patients increased to 99%, Liu says of his county.
