2012 marks the tenth anniversary of the implementation of the New Rural Cooperative Medical Scheme (NRCMS). Over the past decade, with Party Committees and governments at all levels attaching great importance to NRCMS and under their strong leadership, relevant departments have given full cooperation and farmers have actively participated in the scheme. Therefore, NRCMS has made solid progress and remarkable achievements.

First, NRCMS has almost realized universal coverage with the participation remaining stable at a high level. Since the pilot programs in 2003, NRCMS achieved a comprehensive coverage in 2008. The participation number has grown steadily every year, from 80 million in the early stage of the pilot programs to 812 million by the end of June 2012, with over 95% of the targeted population covered.

Second, the financing continues to grow and the protection level improves gradually. The per capita cost of the insurance package increased from 30 yuan in 2003 to 250 yuan in 2011. In 2011, 1.315 billion person-times benefited from NRCMS with average hospitalization compensation amounting to 1,894 yuan. In 2012, the reimbursement for hospitalization costs will reach around 75%, with an annual payment ceiling of no less than 8 times of farmer's per capita net income (no less than 60,000 yuan).

Third, a comprehensive institutional framework and operational mechanism is established in line with China's national conditions, i.e. led by the government; in the charge of health departments; supported by relevant sectors; operated by the insurance agencies; with services provided by the health institutions; participated by farmers and transparent reimbursement of the medial costs. NRCMS is co-financed by individual contributions, farmers' cooperatives and both central and local governments, with families participating on a voluntary basis. The coordinated compensation focuses on reimbursement for hospitalization costs and gradually expands to out-patient care. In 2011, over 90% of areas carried out out-patient compensation which benefited the farmers in a wider range. The insured farmers can choose independently the designated hospitals for treatment and get real-time reimbursement. In 2011, over 2/3 of provinces (autonomous regions or municipalities) adopted real-time reimbursement in their designated provincial and municipal hospitals. The funds are operated in closed-end mechanism and supervised by multi-sectors. In 2011, over 80% of areas carried out various payment reforms, which supported NRCMS to effectively control the medical costs. Commercial insurance agencies are encouraged to involve in the operation of NRCMS, which explores the operational mechanism of "separating supervision from operation, and separating government administration from medical institutions".

In the next stage, integrating with the overall arrangements for deepening the reform by the central government, we will press ahead in the following aspects:

First, the financing for NRCMS should grow in a steady pace. The fund pooled per capita will reach 300 yuan by 2012. By 2015, government subsidies will reach 360 yuan per person per year. The individual contribution will grow as appropriate. A financing mechanism that suits the economic development in China will be gradually established.

Second, the NRCMS should be meticulously managed, including strict utilization of the funds and enhancing supervision on designated hospitals. Real-time reimbursement should be established in designated provincial and municipal hospitals as well as village clinics across the country. Reimbursement for medical costs outside of one's registered province should be gradually realized. The information engineering of NRCMS should be accelerated, in combination with distributing the health cards for the residents, in order to press ahead the all-in-one-card pilot program. The information systems of NRCMS and related schemes such as the medical assistance scheme should be better synchronized, to provide one-stop real-time compensation service.

Third, the pilot program of compensation for major diseases should be promoted, including 20 diseases such as child leukemia, lung cancer etc. The Guiding Opinions on the Supplementary Insurance of Major Diseases for Urban and Rural Residents collectively issued by six ministries should be implemented. Supplementary Insurance should be well connected with NRCMS policy on the benefits for major diseases and should cover the mentioned 20 major diseases as preference.

Fourth, NRCMS payment reforms should be accelerated, in terms of using pre-payment of total medical cost, disease-based payment, service unit-based payment and capitation to replace fee-for-service. The reforms aim to control medical costs, modify health service behaviors and enhance fund performance.

Fifth, the engagement of entrusted qualified commercial insurance agencies in the operation of NRCMS should be accelerated; so as to establish an operational mechanism that to some degree separates the management, operation and supervision of NRCMS.

Sixth, the experience of the last decade should be diligently studied to facilitate the formulation of the Regulations on Administration of New Rural Cooperative Medical Scheme. The administration of NRCMS should be legislated as soon as possible.

It has been proven that NRCMS, a suitable mechanism for rural China, is an important crystallization of basic medical insurance system for rural residents in current circumstances. In the last decade, NRCMS has grown up from a new born baby and is now playing a vital role for the health of the rural residents. As the competent authority of NRCMS, the Ministry of Health will collaborate with other related ministries to continue to promote its development and steadily improve rural residents' health status.