Diabetes sufferer Tang Ning has cut the cost of his insulin injections by 75 percent.

A year's worth of shots from a large hospital in Zhenjiang city, Jiangsu Province, used to cost more than 4,000 yuan (585 U.S. dollars).

The same course costs only 1,000 yuan a year in a new community clinic.

On top of that, he no longer has to jostle with the crowds who regularly flow into China's large city hospitals, queuing hours for a minute-long consultation with consultant doctors, or for an X-ray.

Lin Feng, director of the health bureau of Zhenjiang City, says the city is helping to pioneer a tiered health system to overcome bottlenecks at big hospitals and stop the huge sums of public money being wasted on overlapping and duplicated services.

"People flood into large hospitals even with light ailments, because they don't trust community health clinics," says Lin.

The city set up two medical groups, Jiangbin and Kangfu, in November 2009, incorporating general hospitals, specialist hospitals and community-based clinics.

Medical groups, by pooling resources of different tiers of hospitals, will improve community level health care, sparing patients high-cost medical services at large hospitals.

Zhenjiang has in place 19 urban community-based health centers and 45 smaller clinics.

Yu Jie, director of Zhengdong Road health center, a subsidiary of Kangfu Group, says, "Patients neither pay a registration fee nor a treatment fee here. Our medicines have a zero surcharge, and are sold at much lower prices than in large hospitals."

Yu says outpatient visits to the health center rose by 30 percent, up from 118,000 visits in 2008, to 149,000 last year.

Previously, patients avoided visiting community clinics because they lacked confidence in their facilities and doctors' competence.

To combat concerns, the city made grass-roots work experience a must for doctors applying for intermediary or senior professional titles. Doctors from large hospitals must work in community clinics for a year before applying for such titles.

The city also ordered large hospitals and community clinics in the same medical group to share medical records, logistics, equipment and maintenance capacity.

By the end of 2010, the city's large hospitals will integrate their medical databases with those of community clinics, allowing for the rapid transfer of information.

This will eliminate costly repetitive medical examinations.

Zhu Fu, president of Kangfu group, says the group is setting up an imaging center, equipping all subsidiary community clinics with X-ray machines and type B ultrasonic machines, saving patients from queuing for imaging checks at large hospitals.

The images will be transferred to the image database of the group for doctors from large hospitals to diagnose.

Such transfers are already happening between Xiangshan Community Health Center and the No. 1 Renmin Hospital, both subsidiaries of Kangfu group.

To encourage people to seek treatment at community clinics, the city has introduced a policy giving preferential appointments at large hospitals to patients referred by small clinics.

Meanwhile, large hospitals refer patients with minor ailments, diagnosed chronic diseases, in rehabilitation or hospice care to community clinics within the same group.

Dr. Jack Langenbrunner, lead health economist with the World Bank's China office, says the medical group model has achieved success in other countries, but the incentives to hospitals and the priority given to primary care are crucial to its success.

"In China, 62 percent of the money goes to inpatient care. China wastes too much money on unnecessary hospital payments. This new model, if designed correctly, can help address this problem," says Langenbrunner.

Vice Premier Li Keqiang stressed the importance of grass-roots medical institutions in urban communities and rural villages at a conference on expanding health reform Sunday.

Li pledged more funding, resources and trained medical staff to community clinics to improve grass-roots medical services.

The government unveiled a three-year plan for health care reform, involving an investment of at least 850 billion yuan, in April 2009. The reform expands coverage of basic health insurance, lowers drug prices and addresses problems in public hospitals.

Zhenjiang is one of the 16 pilot cities carrying out public hospital reform, which began in February 2010.