China will further reform its medical and health care services in 2012 to better people's well-being, Premier Wen Jiabao said in his government work report delivered at the annual parliamentary session Monday. [Highlights of?government work?report]

"We will move faster to improve the medical insurance system covering the whole population, consolidate and expand the coverage of basic medical insurance, and enhance our capability to provide and manage basic medical services," Wen told the Fifth Session of the 11th National People's Congress opened Monday.

China would raise subsidies for medical insurance for non-working urban residents and the new type of rural cooperative medical care system to 240 yuan per person per year, according to the report.

The figure is up from 200 yuan in 2011 and a total of 832 million people are benefiting from the program that refunds as high as 70 percent of a patient's treatment fees.

China also encourages participation of foreign investors to diversify the country's medical care system.

"We will encourage and guide nongovernmental investment in hospitals, and speed up the creation of a system of hospitals with diversified ownership that is open to foreign participation," Wen said.

The State Council, China's cabinet, issued a circular in 2010 asking governments at all levels to simplify procedures to facilitate private and foreign investment in the health care sector dominated by public hospitals.

The reform of public hospitals will be pushed forward so that medical care is separated from pharmacy operations, a practice that have long been blamed for the country's excessive medicine prices, according to the report.

Also, China will extend the medical insurance to cover more diseases such as uraemia and lung cancer to provide aid for their treatment.