Health Care System and Reimbursements Issues in China Lu Ye School of Public Health Fudan...
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Transcript of Health Care System and Reimbursements Issues in China Lu Ye School of Public Health Fudan...
Health Care System and
Reimbursements Issues in China
Lu Ye
School of Public Health
Fudan University
1. Country Profiles
Population: 1.259 billionCrude birth rate: 12.41 per 1000 (2003)Crude mortality rate: 6.40 per 1000 (2003)Natural growth rate: 6.01 per 1000(2003)Life expectancy at birth: 71.2 years (2001)Infant mortality rate: 28.4 per 1000(2000)
China Health Profiles
Number of Hospitals: 17,764Number of Health Centers: 45,204Number of Beds:2.95 millionNumber of Health Professionals: 5.27 millionNumber of Beds per 1000 population: 2.34Number of Doctors per 1000 population: 1.48Number of Nurses per 1000 population: 1.00Doctor/Nurse Ratio: 1:0.48
Health Resources (2003)
2. Health Care Finance
Health Expenditures as a % of Gross Domestic Product in China
4 4.1 4.13.983.773.694.2
4.294.8 5.1
5.35.16
5.515.62
0
1
2
3
4
5
6
90 91 92 93 94 95 96 97 98 99 0 1 2 3
GDP%
%
Year
Trend of Health Expenditures
0
100
200
300
400
500
600
700
90 91 92 93 94 95 96 97 98 99 0 1 2 3
Heal th Expendi tureHE per capi ta ( )¥
Billion ( ¥ )
658.4
¥ 509.5
Year
Comparison of Annual Growth Rate Between HE & GDP
0
2
4
6
8
10
12
14
16
18
20
91 92 93 94 95 96 97 98 99 0 1 2 3
Growth rate ofHE(%)Growth rate ofGDP(%)
Year
%
Composition of Health Financing Sources
• Government financing
• Quasi-government
-Enterprises health financing
-Health insurance scheme financing
• Individuals
• Social financing
Cause of Issues in Health Financing• China’s health care provision and financing
system transited from a central planned economy to a market based economy
• There is a tendency shifting mainly government & community funded to one based on user charges
• It has resulted many complications : cost escalation, inequity & inefficiency
Underlying Reasons for Cost Escalation
• Rational reasons are increasing aging population, changing disease pattern
• Irrational reasons are:
-- Inadequate government financing
-- Distorted pricing system
-- Unreasonable reimbursement
system (FFS) for providers
Composition of Health Financing Sources in China (1990-2003)
0
10
20
30
40
50
60
90 91 92 93 94 95 96 97 98 99 0 1 2 3
Government budget Quasi -government Indi vi dual s
%
The Complications of High Private Payment
• Inadequate insurance and risk-pooling coverage
• High disease burden for the poor
• Declining access of medical care and preventive services
• People complain the high prices of medial services and use more self-medication
Lack of Fund to Support Public Health in China (1999)
81%
6%2% 11%
Medi cal servi cesPubl i c Heal thOthersHeal th devel opment
New Efforts Made by Chinese Central Government
• One of the striving targets is to increase the health quality of whole nation
• Government’s responsibility is to provide public health services
• Central government spent 6.5 billion to build up CDC institutions and blood collection centers in the Western provinces in China in 2002
3. Health Insurance in China
Insurance Patterns
• Social Medical Insurance in Urban Employee(1998)
-Personal account+ Social pooling fund
• New Cooperative Medical System in Rural
Social Medical Insurance Contributions From Different Sources
4%
2%
6%
Payroll Tax
Paid by employees
Paid by employers
Paid by employers
Basic medical insurance
SupplementaryMedical insurance
Basic Scheme of Urban Medical Insurance 2% by Employee
30%
70% Social Pooling Fund
Personal Medical Savings
Account6% of
average annual salary ofemployee paid by employer
3.8%
4.2%
Basic Scheme of Urban Medical Insurance
2% by Employee
30%
70%
Pooling Fund
Additional Medical Insurance
Personal Account<34 years old: RMB 23835-44 years old: RMB 308 45 years old to retire: RMB 378 Retire up to 74 years old: RMB 769, 4% SAASAbove 75 years old: RMB 866, 4.5% SAAS
*SAAS: Shanghai average annual salary, 1999 SAAS is RMB14,000, 2002 SAAS is RMB 18,000
10% of SAAS byEmployer
2% of SAAS byEmployer
Outpatient Reimbursement Scheme Additional medical insurance: Payment % varies by age
Self-payment
Personal medical saving account
Additional medical insurance
Use until draw out Cash up to additional medical insurance start level
Reimbursement ratio:Born before 1955: 70%Born from 1956 to 1965: 60%Born after 1966: 50%Employment after 2001: self-payment
Employee: RMB 1,400 , 10% SHH average annual salary
Retiree: RMB 280, retire before Dec, 2000RMB 700, retire after Dec, 2000
Inpatient Reimbursement Scheme
Pooling Fund
Self- payment
Additional medical insurance
Retired before 2000
Co-payment 92% by pooling fund, 8% by self-payment.
Base line Base line
Retire before Dec, 2000: RMB 700
Retire after Dec, 2000:
RMB 1120
10% SAAS
RMB 1,400
Working people & retire after 2000
80% co-payment
Co-payment 85% by pooling fund, 15% self-payment.
80% co-payment
Top line: 4 x SAAS
Coverage of Urban Medical Insurance
0
20
40
60
80
100
120
140
Reti reesEmpl oyees
Year
Million
Hospital reimbursements
• majority hospitals owned by State• hospital revenues come from: -Government reimbursements(10%) -market(90%) -Health insurance scheme -User charge • Using the drug price difference b/w the wholesale and
retail as part of hospital revenue for the subsidy• The legal price difference is 15% for the generic and
chemical drugs and 20% for traditional drugs. • 85% of drugs dispensed/distributed by hospitals
Composition of Hospital Revenues (2003)
43%
44%
9%4%
medi cal
drug
governmentsubsi dyothers124.6
billion 注:其他指上级补助收入和其他收入。
Policy Changes in Drug Price Setting
• Manufacturing cost markup at a fixed rate (5%) (before 1996)
• Pricing based on average market cost of various drug categories (since 1998)
• Highest retail price set by SDRC (since 1999)• Bulk procurement through price bidding (since 2001)• Market price approach for out-of-formulary • Individual drug price setting for patent or some off-patent
drugs with public hearing (on needed basis)
Drug Price Setting Under Planning Economy in China
+ 5%
+ 5%+15% -20%
Manufacturing Cost
Ex-factory Price
Wholesale Price
RetailPrice
Role of Government in Price Control
• Define National reimbursement drug list• Setting the highest retail price of all drugs in
national basic medical insurance’s reimbursement list, including prescription drug and over-the-counter drug
• Bulk procurement through price bidding, then, adjust retail price generally three months later
• Originator drug is allowed to be priced separately