A letter in Lancet Global Health this week from urologist Dr Guan Xiao and colleagues at the Xiangya Hospital, Changsha, Hunan:On Jan 15, 2016, the National Health and Family Planning Commission of China reported its work plan for 2016 at a press conference in Beijing, mentioning that it will expand the public hospital reform to 200 cities in China. The core part of the reform is to ban the price increase of drugs and materials, reduce the cost of medical examinations, and appropriatel raise the price of medical services provided by physicians, such as surgery.
The government’s subsidy accounts for only about 8% of public hospitals’ revenue, putting these institutions under great pressure. Public hospitals have to seek new ways to make a profit instead of only sticking to their public welfare goals. The government has lowered medical costs in response to public demand; however, the subsidy remains the same. To solve the dilemma hospitals are now facing, the government should increase the subsidy to a level that is enough to cover operational costs without damaging the medical staff’s initiative. Investment in health-care services takes up only about 6% of finance expenditure in China, compared with about 15% in developed countries. Additionally, the adjustment of the prices of medical services is lagging far behind the market prices. The mechanism of adjustment for these prices should be revisited.
People could benefit a lot from the launch of the public hospitals reform. For public hospitals, it is not a simple choice of choosing survival of the organisation or public welfare. We should find balance between them.