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Working together for better Health in ChinaPublic & Private Partnership in Health

Dr. Henk Bekedam

WHO Representative ChinaChina Healthcare PPP Forum

21 March 2007

http://www.wpro.who.int/china

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Overview of Presentation China at the crossroads The role for the government The role for the market The Health system reform framework

… towards universal access

… towards cost control medicine & goods

… improving quality

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China at the Crossroads

Wide consensus about the problems• China’s health system is “sick” and the diagnosis is clear:

– “Kan Bing Nan, Kan Bing Gui” – Healthcare is available but not affordable and not accessible

• The problems have been detected: – Insufficient Government funding for public health/essential care; – Distorted provider payment system relying on fee-for-service; – Wide-spread exposure to health-related financial risk; – Weak quality/safety management and cost control systems; – Unclear and insufficient role of government

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What is being planned? NPC law for mid 2007 State Council set up a ministerial co-ordination working group

early 2006 for deepening health system reform in China; it includes 14 ministries and is led by NDRC and Ministry of Health

Health management and service operation (MoH and NDRC)Financing investment mechanisms (MoF and NDRC)Medical security systems including urban basic medical

insurance, RCMS, and MFA (MoLSS and MoH)Pharmaceutical distribution and supervision/monitoring (SFDA

and NDRC) Report to Party Congress in October 2007

China at the Crossroads (cont.)

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China at the Crossroads (cont.)

Consensus emerging recently about the way forward

• “Treatment” or way forward … – “President Hu promises bigger government role in public

health and with a goal for everyone to enjoy a basic health care service” (Xinhua 24 Oct 2006)

– Govt to increase financial investment in Health (2% or more of GDP) in line with “education for all”, spending up to 4% of GDP

• Need to further this vision … – A clear and holistic vision forward and define clear Government

role supported by senior leaders to guide many actors; – Start quickly, but include stepwise targets – no quick fix;

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China at the Crossroads (cont.)

There is a heated debate about other steps forward

• What services will be part of essential services? • Increased funding but not clear how it will be channeled

– NHS – like?– Expanding & re-designing urban and rural health insurance?

• What should be the exact role of government and market?– How to deal with government and market failures?

• Provider payment and incentives to be changed – but how? • How to improve human resources and capacities in the health system?• Need for institutional changes to clarify roles and increase efficiency

among many actors but how?

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Health System Reform Objectives

• Equity – Access

• Efficiency - Cost containment

• Quality

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The Role for the Government

Core role for the government Ensure universal and equitable access – on the basis of need – to

essential healthcare (including essential medicine) that is safe, affordable and of good quality

Ensure financing of essential healthcare at local level – no unfunded mandates – financial transfers to guarantee support delivering health care

Ensure safety network for the vulnerable and the poor for Health Strengthen regulatory framework safety & quality of health care Ensure cost control mechanisms in place Ensure framework for effective involvement of the private sector and

the market

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The Role for the MarketThrough regulated competition, the private health sector and the market

may help achieve:1) Better delivery of both essential and non-essential healthcare,

possibly via bidding/contracting; 2) More effective production, distribution, and sales of high quality

medicines (including generics) and goods;

3) Investment in innovation and research & development4) Private health insurance – pooling and financing and purchaser

for non-public health services (Dutch reform)Thus to avoid “Government failure” in many areas (e.g. monopoly in

service provision and lack of competition) But the market needs certainty – and a strong government setting clear

rules will encourage markets to engage (quality, price setting etc.)

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Towards Universal AccessGeneral lessons from OECD:I. Key is providing access to essential services (public health

functions & services and essential clinical services) for all: a) NHS like – for poor and West? b) Re-design, expand and integrate current urban, rural

health insurancec) Private health insuranced) Develop safety net for vulnerable group

II. Move away from cash payments and user fees at service delivery towards pre-paid and pooled contribution

III. Minimize cost sharing & reduce co-payment to 20% or lessIV. Make health insurance compulsory & inclusive (BMI: family

members & migrants)

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Towards Cost (&Q) Control

Put in place cost containment tools and mechanisms Regulate price and volume of health care & inputs Caps on health care spending Develop National Medicines Policy (next slide)

Change the method of provider payment: Towards prepaid and pooled contributions away from user fees Introduce global budget, capitation and other prospective payment methods,

instead of retrospective ones, particularly fee-for-service Strengthen the role of purchaser of health services (Govt, insurance)

Strengthen ambulatory care & introduce gate keeping mechanisms Using village clinics, urban community health centers, and GP’s Improve quality of health services at lower level – gain trust

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Towards Cost (&Q) Control (cont)

Develop National Medicines PolicyDrugs consists 44% of total health expenditure – in EU this is about 15% up to 25% elsewhere

Ensure strict drug approval and registration requirements to assess quality, safety, efficacy and cost-effectiveness

Accredited producers, distributors, wholesalers; Optimize price controls allowing for decent profit margins for

generics and other essential medicines and innovative drugs attractive for private sector to engage

Support rational use by: clinical practice guidelines prescription budgets feedback on individual doctors

Strengthen mechanisms to combat counterfeit drugs

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Improving Quality and ….

Improve quality of health services, especially at lower level Standardize treatment guidelines Introduce mandatory accreditation Improve reporting system and make reports public on health care quality Improve qualifications of staff at lower level Formalize patients’ rights and introduce patient safety program

Introduce health system indicators that will focus on accessibility to quality services instead of availability

Involve all stakeholders in the process

THANK YOU