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Healthcare cost control

China Daily, January 14, 2011

It's good news the Ministry of Health (MOH) has set controlling the rapid rise in medical bills for residents as one of its key tasks in the coming five years.

The efforts the government has made in the past couple of years have paid off as statistics reveal that the medical bills of individuals made up 38.9 percent of the total healthcare cost in 2009 on average, much lower than the 52.21 percent in 2005. Yet despite this, the per capita healthcare cost has been on the rise in recent years and there have been growing public complaints about increasingly expensive healthcare. Serious illness still constitutes a heavy a burden on rural and urban residents. For example, an operation for a patient with heart problems can be as expensive as 100,000 yuan ($15,150).

Research by the World Health Organization suggests that only when the proportion of individual payments for healthcare is reduced to 15 to 20 percent of a country's total healthcare bill will it be possible for residents to escape being dragged into poverty by serious diseases.

The target of the MOH is to reduce the individual payments percentage to less than 30 by the year 2015, the end of the 12th Five-Year Plan period.

To realize this goal, the MOH must first establish a mechanism to check the over-medication in hospitals. That explains why the health minister said on Jan 7 that his ministry would assess how public hospitals attempt to control medical costs.

The MOH is instigating an investigation to find out the major reasons for the rapid rise in medical bills. The investigation will also seek to find out how much money a patient usually spends for a minor ailment or when hospitalized for some serious illness, and a relatively reasonable standard will be set. This standard will then be used as a reference to determine whether unnecessary medical checkups have been done or unnecessary medicines prescribed.

Administrative healthcare departments at all levels are required to regularly publish information about healthcare costs for supervision by the public.

But what is even more important is that the MOH make efforts to control the rise of the total healthcare cost, as even if the proportion of the payment from individuals is reduced to less than 30 percent, they may have to pay more as total healthcare costs rise dramatically.

So the MOH has a lot more to do to cut the profit-driven relationship between doctors and medicine manufacturers, between hospitals and healthcare facility providers and so on.

We have confidence that the MOH will meet its target, which will hopefully substantially reduce individual's expenditure on healthcare.