Impact of China’s ‘Zero-markup Policy for Essential Drugs’ on … · 2018-05-14 ·...
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Impact of China’s ‘Zero-markup Policy for Essential Drugs’ on patients, county hospital revenue, and government subsidy levels
Yanfang Su, Sc.D Asia Health Policy Program Stanford University April 5th, 2016
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Publications
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� Z. Zhou, Y. Su, et al. 2015: “The financial impact of the 'Zero-markup Policy for Essential Drugs' on patients in county hospitals in western rural China,” PLOS ONE.
� Z. Zhou, Y. Su, et al. 2015: “The impact of China’s Zero-Markup Drug Policy on county hospital revenue and government subsidy levels,” Journal of Asian Public Policy.
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Preview of results
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� Patients � Outpatient services: Total expense per visit reduced by 3.12 USD � Inpatient services: Total expense per admission reduced by 65.6 USD
� Hospitals � Increased health care provision and a sustained total hospital income
despite a decrease in drug revenue. � Governments
� With minimal or no subsidy, the government can catalyze the zero-markup policy and generate positive outcomes for patients and county hospitals.
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Background
Harvard T. H. Chan School of Public Health
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Global drug policies
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� 1980s: Cost recovery mechanism � 1987 Bamako Initiative, the African Ministers of Health
conference � Drug Revolving Funds (DRFs) in Nigeria
� Sustainable supply of essential drugs � Asia experience
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China Healthcare Reform over the Years
Post 1949
v Barefoot doctors
v LE: increased from 35 years to 68 years (1949 -1978)
1994 1998
v Urban employee health insurance (UEHI)
2002 2005
v Criticism of health system reform:"basically unsuccessful"
2007
v Urban resident health insurance (URHI): children and the elderly
v UEHI covered 180 million
Oct 2008
v Released reform draft for public debate
Apr 2009
v The reform plan was officially released for implementation
v Basic healthcare Service as Public Goods
1985
v Drop in public investment in health care
1997 2000
v 1st round healthcare system reforms: Divided hospitals into non-profit public organizations and commercial hospitals
2003
v SARS
v New cooperative medical system (NCMS)
2006
v The State Council led a joint working team to draft a new health reform plan
Jan 2008 Jan 2009 Feb 2008
v NCMS covered more than 804 million rural population
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5 Key Areas of Focus
Insurance System
1 3
Essential Drug System
4
2009-2011
Healthcare Delivery System
Pilot Hospital Reform 5
Public Health System
2
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Goal of HC 2020 Reform and Masterplan
� Goals -2020 � Everyone will have access to basic health services � Safe, effective, convenient, and affordable health
services for urban and rural residents
n Goals -2011 � Improve access to basic health services � Reduce financial burden due to healthcare
� 3-year Implementation Plan (2009-2011) � Incremental $125 billion investment � 5 Reform Programs to address “Kanbingnan and
Kanbinggui” (inaccessibility and unaffordability of healthcare) Reform
masterplan
Guidelines
2020
2011
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Objectives
Harvard T. H. Chan School of Public Health
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Objectives
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� Assess Zero-markup Policy for Essential Drugs (ZPED) for county hospitals � Patients � Hospitals � Governments
� Literature: � Villages and townships � Pre-post comparison or difference-in-differences (Chen et al.,
2013) � Lack of comprehensive evaluation of stakeholders
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Methods
Harvard T. H. Chan School of Public Health
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Difference-in-differences
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� The treated: Ningshan, 2010 � Control county: Zhenping � Assessment of DID assumption, using pre-treatment data
from 2007 to 2010 � DID with control variables in regressions
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Outcome measure
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� Patients � Outpatient services: Per-visit total expense and drug expense � Inpatient services: Per-admission total expense and drug expense
� Hospitals � Health care provision � Total hospital income � Drug revenue
� Governments � Subsidy level
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Data
Harvard T. H. Chan School of Public Health
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Sampling
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Sampling cont’d
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Data
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� Hospital-level data � Individual-level data
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Results
19 Harvard T. H. Chan School of Public Health
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Pre-treatment trends
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Main results: medical expenses
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Main results: service provision
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Main results: hospital revenues
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Main results: government subsidy
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� 15% mark-up principle
� Natural growth principle
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Discussion
25 Harvard T. H. Chan School of Public Health
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Discussion
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� Provider behavior: Non-drug expense increased by 8.18 CNY (1.34 USD) for outpatient services
� Controlling for unobservable confounders vs. observable demographic characteristics � Inpatient services � Outpatient services
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Limitations
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� Data: � Lack of individual outpatient records in Zhenping � Segmented health record system for inpatient service in
Zhenping
� All drugs rather than specifically on zero-markup drugs at individual level data
� Short-term vs. long-term impact
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Conclusions
28 Harvard T. H. Chan School of Public Health
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Conclusions
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� Advancement for patients, hospital, and government � Lower cost for patients � Higher revenue for hospital � Greater access of health care
� Behavioral change of healthcare providers and patients
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Thank you! [email protected] @yanfangsu scholar.harvard.edu/yanfangsu/ PS, Data shared via Harvard Dataverse Network
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