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Delivering Results in the High-Quality Development of Healthcare Security

By CPC Leadership Group of the National Healthcare Security Administration Source: English Edition of Qiushi Journal Updated: 2022-07-12

Healthcare security is an essential part of the system that safeguards people's wellbeing in China. It directly concerns people's welfare and health, medical and healthcare service development, and economic and social stability. Since the 18th National Congress of the Communist Party of China (CPC) in 2012, General Secretary Xi Jinping has adopted an overarching and strategic approach to thoroughly address important issues of our times, such as why and how to further the reform of healthcare security in the new era. 

I. Enduring confidence in the Chinese system of healthcare security 

The CPC understands the importance of healthcare security work. After the founding of the People's Republic of China (PRC) in 1949, the government successively put in place medical services under the system of labor medicare, free medical services for government employees, and rural cooperative medical services, which provided healthcare security based on the conditions at the time. Following the launch of the reform and opening up drive in 1978, China began to build a system of universal medical insurance geared toward the socialist market economy, starting with reform of the system of basic medical insurance for urban employees. The 18th CPC National Congress marked the beginning of a new stage in the development of healthcare security, after which the CPC Central Committee established the National Healthcare Security Administration, created a blueprint for reform, and accelerated the development of medical insurance. Subsequently, in a relatively short period, we introduced the world's largest universal basic healthcare security network. The number of insured people now stands at over 1.36 billion, with an enrollment rate of over 95%, and the proportions of total inpatient expenses that fall within the scope of medical insurance for employees and for non-working residents are approximately 80% and 70%, respectively. The annual revenues and expenditures of funds exceed 2 trillion yuan, which have paid for 4 billion medical treatments. The healthcare security network plays a vital role in solving the difficulties and covering the expenses associated with medical treatment for the public, supporting the development of medical and health services, maintaining social stability, and promoting common prosperity. 

The CPC has led the Chinese people in a century of struggles to establish a Chinese system of healthcare security, which effectively protects everybody in China with annual medical insurance investment that equates to 2% of GDP and has raised average life expectancy from less than 40 years in 1949 to 77.3 today. This impressive feat has received widespread praise within China as well as from the international community. 

The benefits of public medical insurance have reached new heights. 

China's healthcare security system is now more comprehensive. We have established unified medical insurance and critical illness insurance systems. We have initially developed a multi-tiered healthcare security system that is centered on basic medical insurance, underpinned by medical assistance subsidies, and supplemented by medical insurance programs and commercial health insurance. The healthcare security system now has a wider coverage. We have established a mechanism for providing urban and rural residents with drugs for hypertension and diabetes at outpatient clinics, improved the mutual aid mechanism for outpatient costs under the system of medical insurance for employees, and steadily expanded the pilot program on insurance for long-term care. The healthcare security system is effectively reducing poverty. Nearly 100 million poor people in China have been guaranteed access to basic medical care, and nearly 10 million households who have been impoverished due to poor health have been the subject of targeted poverty alleviation efforts. The healthcare security system has made services more convenient. The services by medical insurance agencies are being provided more locally, processes are continuously being optimized, and efforts are being made to handle more processes online, conveniently, locally, and efficiently. 

Breakthroughs have been made in responding to public health emergency. 

The healthcare security system guarantees treatment for Covid-19 patients and has helped to develop a highly successful model for containing the epidemic. We pre-allocated at the earliest opportunity 20 billion yuan to ensure that patient treatment would not be affected by cost and that admission to hospital would not be hindered by payment policies (known as the Two Guarantees), which is testament to the strength of the socialist system. The healthcare security system has ensured access to vaccines, helping to quickly build an immunity shield. We rapidly raised and pre-allocated funds for the procurement of vaccines and to cover vaccination costs timely, which allowed enterprises to carry out production, procurement agents to make purchases, and vaccination organizations to vaccinate without fear of incurring losses. As a result, more than 3.3 billion doses of Covid-19 vaccines have been administered so far. The cost of routine prevention and control measures has continuously fallen, and the price of vaccines has been reduced four times. The price of inactivated vaccines has been reduced by more than 90% compared to the initial period of emergency use. The price of nucleic acid testing has fallen four times nationwide, and registration fees for nucleic acid and antigen testing have been waived. 


Staff from the Yongnian District Medical Insurance Bureau in Handan City, Hebei Province help residents apply to have outpatient treatment expenses for chronic or special illnesses reimbursed at Houdangtou Village in Yongnian District, December 9, 2021. NATIONAL HEALTHCARE SECURITY ADMINISTRATION / PHOTO BY HU GAOLEI 

Progress has been made in the supply-side reform of medicine. 

The financial burden on the public caused by the high cost of medicine has been eased to an unprecedented extent. The state has purchased six batches of 234 types of medication through its centralized drug procurement initiative, achieving an average price reduction of 53%. It has centrally procured two batches of consumables, achieving an average price reduction of over 80%. A total of 250 types of new drugs have been included in price negotiations, achieving an average reduction of more than 50%. The savings resulting from these initiatives amount to more than 500 billion yuan. The availability of high-quality drugs and consumables has also significantly improved. The list of drugs available on medical insurance is adjusted every year, and 507 types have been added and 391 types removed in the past four years, leaving the total number of available drugs at 2,860. Moreover, the number of designated pharmacies has increased, so new life-saving drugs can now be obtained faster, cheaper, and more conveniently. The proportion of patients who use high-quality medications from the central procurement scheme has increased from 50% to more than 90%. The pharmaceutical industry is also changing. In addition to continuing to drive down inflated prices and implement the surplus retention initiative among medical institutions, 101 cities have launched a national pilot reform of medical insurance payment methods for inpatient expenses, and further reform of medical service pricing. As a result, the industry has been cleaned up, compensation mechanisms have improved, and R&D investment in the pharmaceutical industry has increased significantly. 

Crackdowns on medical insurance fraud have been stepped up. 

Recent crackdowns have been more severe than ever. Since 2018, we have conducted three consecutive years of across-the-board checks and four consecutive years of special rectification measures, during which a total of more than 2.4 million inspections of designated medical institutions have been carried out, with nearly 1.15 million rectifications made, 120,000 cases of fraud exposed, and 58.3 billion yuan of funds recovered. Mechanisms for coordinating investigations and punishments between agencies, such as creating links between administrative law enforcement and discipline inspection as well as between administrative law enforcement and criminal justice, have been continuously optimized. Breakthroughs have been made in the development of the rule of law. The Regulations on the Supervision and Administration of the Use of Healthcare Security Funds, China's first administrative regulation on healthcare security, has been promulgated and implemented. The standardization and implementation of the rule of law in administrative law enforcement have continuously improved, with the establishment of 155 full-time regulatory agencies nationwide. Longterm mechanisms are taking shape, with the establishment of a system of rewards for reporting misconduct, leading to cases worth 760 million yuan being investigated and dealt with following tip-offs to the National Healthcare Security Administration alone. More than 19,000 cautionary education and training sessions were held during a month of intensive publicity activities to foster a social atmosphere of protecting medical insurance funds. Credibility assessment systems for pharmaceutical pricing as well as bidding and procurement have ensured the trustworthiness and commitment of enterprises, effectively deterring pharmaceutical companies from engaging in bribery.


Staff members serve the public at a medical insurance service counter in Jiuquan City, Gansu Province, March 1, 2022. NATIONAL HEALTHCARE SECURITY ADMINISTRATION / PHOTO BY ZHENG HUIYA 

New achievements have helped to stabilize economic performance. 

Healthcare security has helped to stabilize and encourage consumption by reducing people's need to save for potential medical expenses. Public awareness of insurance is increasing, and sales of commercial health insurance in 2021 were nearly seven times higher than in 2013. We are supporting population mobility by facilitating inter-provincial on-the-spot settlements of inpatient and general outpatient expenses, covering all pooling localities. A total of 146,000 designated medical institutions are included, and 24.2 million people seeking medical treatment have benefited. All provinces have launched pilots of interprovincial on-the-spot settlements of outpatient expenses for five types of chronic diseases. We have also made it more convenient for members of the floating population, such as employees of new business types, to obtain and transfer their insurance. We are supporting the development of the health industry by increasing eligible Internet Plus medical service fee payments, accelerating the development of Internet Plus medical insurance, and we are giving equal treatment to both government-run and private medical institutions in administering medical insurance. Long-term care insurance has led to more than 40 billion yuan of investment in nursing and related industries. 

II. Writing a new chapter in high-quality and sustainable development of healthcare security in the new era 

We will fully support routine epidemic prevention and control measures to protect people's lives and health to the best of our ability. 

We will continue to implement the Two Guarantees and ensure the timely inclusion of new treatment drugs into insurance coverage, which will help to ensure early detection, reporting, quarantine, and treatment of cases for the containment of Covid-19. We will continue to reduce the prices of vaccines, nucleic acid testing, antigen testing, and therapeutics to lighten the burden of containing the epidemic. We will continue to work to lower the costs of vaccines and administering vaccinations as well as work with relevant departments to increase vaccination levels among vulnerable groups. We will continue to expand the services we offer online, make sure Covid-19 prevention and control measures are properly adhered to in medical insurance service locations, and ensure that there is no reduction in benefits, no interruption to payments, and no clustering of services during the epidemic. 

We will continue to strengthen the multilevel healthcare security network and improve its quality as China develops. 

We will improve the systems of medical insurance and assistance for major illnesses, support the helpful roles played by charitable assistance, commercial health insurance and mutual assistance among workers, and strengthen our ability to reduce the burden of high medical expenses. We will continue to consolidate and expand achievements in poverty alleviation through healthcare security and resolutely prevent large-scale relapses into poverty due to illness. We will take targeted steps to rectify weaknesses in outpatient protection and continue to build a policy platform for early diagnosis and treatment as well as management of chronic diseases. We will also steadily expand the scope of trials for long-term care insurance schemes. 

We will gradually break away from uneven regional development in healthcare security and encourage shared contributions and benefits. 

We will fully implement the plan to ensure everyone has access to healthcare security and see to it that the healthcare safety net covers everyone who requires help. We will create a national unified platform for medical insurance information and implement a list-based system of medical insurance benefits. We will continue to expand the scope of mutual support capabilities of medical insurance funds and unify systems and policies, the collection and spending of funds, and the administration and service functions of municipal- and prefecture-level pooling localities. We will focus on guiding provinces with sound basic conditions to initiate provincial-level pooling and urge and guide other provinces to consolidate their foundations for setting up provincial-level pooling. We will also establish long-term mechanisms to balance the administration and service capabilities of various regions. 

We will severely crack down on medical insurance fraud and resolutely safeguard money used to save the lives of the people. 

We will continue to carry out special initiatives, improve comprehensive supervisory capabilities, and increase unannounced inspections. We will effectively implement the Regulations on the Supervision and Administration of the Use of Healthcare Security Funds and make the supervision of funds more law-based, professional, and digitalized. We will develop a sound system of supervision and law enforcement for funds, expand applications of smart monitoring, and standardize mechanisms for rewarding people who report misconduct. We will also continue to optimize the credibility assessment systems for drug pricing as well as bidding and procurement and strengthen the top-level design of the credibility assessment system for the supervision of funds. 

We will continue to promote supply-side reform of medicine so that the public can access more quality yet affordable drugs and services. 

We will standardize and institutionalize centralized procurement and strive to increase centralized procurement at the national and provincial levels to include more than 350 drugs for each province by the end of the year. We will continue to optimize the dynamic mechanism that determines the inclusion of drugs and fully implement the management mechanism regarding access to drugs with state negotiated prices from designated medical institutions and retail pharmacies, so that the public can benefit from new life-saving drugs more quickly and at lower prices. We will continue the reform of medical insurance payment methods, establish mechanisms to determine methodically and adjust dynamically the prices of medical services, and promote a new relationship between medical insurance and medical institutions characterized by positive interaction and common development. 

We will equalize access to basic public services related to medical insurance and make it more convenient and efficient for people to use medical insurance. 

By the end of this year, each county will have launched inter-provincial on-the-spot settlement services for general outpatient expenses, all pooling localities will offer inter-provincial on-the-spot settlements of outpatient expenses for five types of chronic diseases, and we will have explored online processing of reimbursements for medical treatment expenses incurred in other localities. We will fully implement list-based management and operating standards of government services, develop demonstration projects, and ensure we build a positive ethos within our industry. We will achieve interprovincial approvals and payments of maternity insurance benefits by the end of the year. We will also promote the legislative progress of the Healthcare Security Law as part of the efforts to strengthen legislation, law enforcement, and legal observance. 

(Originally appeared in Qiushi Journal, Chinese edition, No. 8, 2022)