EXECUTIVE SUMMARY xxiii TLCs are about putting evidence into a system to monitor health spending practice especially in terms of adopting from all sources (i.e.,fiscal by differ- national and international standards for ent government levels,social insurance, evidence-based clinical practice.But they out-of-pocket,etc.)and type of expen- also entail learning from experience. diture.These performance monitoring Provincial (and local)leading groups can systems can be achieved in partnership select the facility alliances or networks, with academic institutions.Based on the hospitals and primary care facilities to proposed implementation guidelines and participate in TLCs. existing monitoring systems,SCHRO Monitoring and evaluation system: can develop implementation bench- Ensuring strong and independent moni- marks and other metrics to track reform toring and impact evaluation.Monitor- implementation. ing and evaluating the effectiveness of implementation and reform impact is a The pathway of reforms is critical to the out- critical but often overlooked component comes of reforms.Reform sequencing can of the implementation process.Evidence proceed along two pathways:one relates to needs to be gathered to learn from imple- setting accountability and organizational mentation and contribute to evidence- arrangements while the other involves imple- based improvements and future policy menting the recommended core actions. making.Careful monitoring can detect In terms of the former,the first step is for whether implementation is aligned with the central government to prepare policy stated objectives,on track(or going off implementation and monitoring guidelines track)or the implemented reforms match to steer implementation by provincial and the intended reforms.Impact evaluation local governments and strengthening the measures the intended and unintended authority and functions of the State Coun- effects and outcomes.China may con- cil Health Reform Office.Establishing fully sider establishing a strong monitor- empowered leadership groups led by high ing and evaluation system capable of level authorities at the provincial and local independently assessing and verifying levels will be another step in moving for- implementation progress and reform ward reform implementation.Local govern- impacts.It may also consider developing ment will be responsible for developing and FIGURE ES.2 Reform Implementation Roadmap How Long Will it Take?Reform Actions and Impacts Outcomes Patient self management Cost containment Impacts Better quality Actions Better patient satisfaction Prevention Care shifting from hospitals New service planning model PHC utilization Level playing field for private sector engagement Human resource strengthening in support of PCIC Quality improvement and patient engagement/health literacy Realigning financial incentives/strengthening purchasing PCIC model testing and scale-up;public hospital reform Year 1 Year5 Year 10 Time needed to implement,scale-up and achieve impacts Adapted from Cutler,2014
EXECUTIVE SUMMARY xxiii TLCs are about putting evidence into practice especially in terms of adopting national and international standards for evidence-based clinical practice. But they also entail learning from experience. Provincial (and local) leading groups can select the facility alliances or networks, hospitals and primary care facilities to participate in TLCs. • Monitoring and evaluation system: Ensuring strong and independent monitoring and impact evaluation. Monitoring and evaluating the effectiveness of implementation and reform impact is a critical but often overlooked component of the implementation process. Evidence needs to be gathered to learn from implementation and contribute to evidencebased improvements and future policy making. Careful monitoring can detect whether implementation is aligned with stated objectives, on track (or going off track) or the implemented reforms match the intended reforms. Impact evaluation measures the intended and unintended effects and outcomes. China may consider establishing a strong monitoring and evaluation system capable of independently assessing and verifying implementation progress and reform impacts. It may also consider developing a system to monitor health spending from all sources (i.e., fiscal by different government levels, social insurance, out-of-pocket, etc.) and type of expenditure. These performance monitoring systems can be achieved in partnership with academic institutions. Based on the proposed implementation guidelines and existing monitoring systems, SCHRO can develop implementation benchmarks and other metrics to track reform implementation. The pathway of reforms is critical to the outcomes of reforms. Reform sequencing can proceed along two pathways: one relates to setting accountability and organizational arrangements while the other involves implementing the recommended core actions. In terms of the former, the first step is for the central government to prepare policy implementation and monitoring guidelines to steer implementation by provincial and local governments and strengthening the authority and functions of the State Council Health Reform Office. Establishing fully empowered leadership groups led by high level authorities at the provincial and local levels will be another step in moving forward reform implementation. Local government will be responsible for developing and FIGURE ES.2 Reform Implementation Roadmap Time needed to implement, scale-up and achieve impacts Year 1 Year 5 Year 10 Reforms and Impact PHC utilization Outcomes Cost containment Better quality Patient self management Better patient satisfaction PCIC model testing and scale-up; public hospital reform Realigning financial incentives/strengthening purchasing Quality improvement and patient engagement/health literacy Human resource strengthening in support of PCIC Care shifting from hospitals New service planning model Level playing field for private sector engagement Impacts Actions How Long Will it Take? Reform Actions and Impacts Prevention Adapted from Cutler, 2014
xxiv DEEPENING HEALTH REFORM IN CHINA executing implementation plans adopted to may be“right'”now may be wrong in the local conditions but aligned with the policy long term.Realistically,it would take implementation and monitoring guidelines. China around 10 years to fully implement Creating TLCs to support front-line devel- the proposed reforms,and reach full scale. opment and implementation of an initial set How the reforms will be implemented will of PCIC core interventions would be a third vary considerably,given China's size and step.Performance agreements between cen- variations in starting and local conditions. tral and provincial governments and between Clearly,some regions will be able to move provincial and local governments specify- faster than others.As suggested in the chart, ing benchmarks and anticipated results will some reforms will take longer than others to facilitate timely execution at all stages of the implement and scale-up.For example,we plan.Turning to second pathway related to estimate that PCIC model implementation recommended core actions,in addition to and scale-up will take about five years while implementing a PCIC-based delivery model, human resource strengthening will take 6 to a key step would be realigning incentives 8 years.Some impacts,such as cost contain- in provider payments and building capac- ment and outcomes,may not be realized ity among government health purchasers to until after five years of implementation. incentivize improved health,better quality and lower costs.Changing human resource Caveats:This study centers on reforms to management and compensation to elevate the improve health service delivery and the sup- position of primary care physicians would be porting financial and institutional environ- another key step in sequencing the reforms. ment in China.Resource and time constraints Building integrated care alliances or networks did not allow for analysis of other important of tertiary and secondary hospitals,primary reform themes which can be the subject of care providers and community health work- future research.These include:pharmaceuti- ers,incentivized by insurance payments and cal industry,tobacco industry,education and by budgetary contributions and supported by licensing of medical professionals,traditional eHealth information systems,would also be Chinese medicine (and its integration with an early intervention. Western medicine)and dissemination and use of medical technologies.Some of the linkages How long will it take?No one has the between aged care,health care and social ser- answer to this question.International vices will be taken up in a forthcoming WBG experience suggests that health reform is a study.Finally,it is important to keep in mind long-term endeavor that requires continu- that this report is a summary of findings ous inflight adjustments.No country ever and recommendations.The final report will gets it“right”,and what is“right”is con- expand upon the major themes and recom- text specific and often time bound.What mendations presented herein
xxiv DEEPENING HEALTH REFORM IN CHINA executing implementation plans adopted to local conditions but aligned with the policy implementation and monitoring guidelines. Creating TLCs to support front-line development and implementation of an initial set of PCIC core interventions would be a third step. Performance agreements between central and provincial governments and between provincial and local governments specifying benchmarks and anticipated results will facilitate timely execution at all stages of the plan. Turning to second pathway related to recommended core actions, in addition to implementing a PCIC-based delivery model, a key step would be realigning incentives in provider payments and building capacity among government health purchasers to incentivize improved health, better quality and lower costs. Changing human resource management and compensation to elevate the position of primary care physicians would be another key step in sequencing the reforms. Building integrated care alliances or networks of tertiary and secondary hospitals, primary care providers and community health workers, incentivized by insurance payments and by budgetary contributions and supported by eHealth information systems, would also be an early intervention. How long will it take? No one has the answer to this question. International experience suggests that health reform is a long-term endeavor that requires continuous inflight adjustments. No country ever gets it “right”, and what is “right” is context specific and often time bound. What may be “right” now may be wrong in the long term. Realistically, it would take China around 10 years to fully implement the proposed reforms, and reach full scale. How the reforms will be implemented will vary considerably, given China’s size and variations in starting and local conditions. Clearly, some regions will be able to move faster than others. As suggested in the chart, some reforms will take longer than others to implement and scale-up. For example, we estimate that PCIC model implementation and scale-up will take about five years while human resource strengthening will take 6 to 8 years. Some impacts, such as cost containment and outcomes, may not be realized until after five years of implementation. Caveats: This study centers on reforms to improve health service delivery and the supporting financial and institutional environment in China. Resource and time constraints did not allow for analysis of other important reform themes which can be the subject of future research. These include: pharmaceutical industry, tobacco industry, education and licensing of medical professionals, traditional Chinese medicine (and its integration with Western medicine) and dissemination and use of medical technologies. Some of the linkages between aged care, health care and social services will be taken up in a forthcoming WBG study. Finally, it is important to keep in mind that this report is a summary of findings and recommendations. The final report will expand upon the major themes and recommendations presented herein
abbreviations ABCS Aspirin,Blood pressure, EHR Electronic Health Record Cholesterol,Stroke system ACTION Aged Care Transition ED Emergency Department program(Singapore) FT Foundation Trust(England) AMI Acute Myocardial Infarction GDP Gross Domestic Product ARS Regional health agencies GP General Practitioners (France) HCA Health Care Alliance BHRSS Bureau of human resource HMC Hospital Management and social security Center/Council CDM County,District,or HRH Human Resource for Health Municipality IHI Institute for Healthcare CHC Community Health Center Improvement CIHI Canadian Institute of Health IMF International Monetary Fund Information IOM Institute of Medicine CIP Capital Investment Planning IT Information Technology CMS Centers for Medicare and Medicaid Services LLG Local Leading Group CNHDRC China National Health MDT Multi-Disciplinary Teams Development Research Center MoF Ministry of Finance CoG Council of Governors MoHRSS Ministry of Human Resource (England) and Social Security CON Certificate of Need MQCCs Medical quality control CPAS Central physician committees appointment system MSMGC Medical service management CQI and guidance center Continuous Quality MTEF Improvement Medium-Term Expenditure CT Computerized tomography Framework DRGs NCDs Non-Communicable Diseases Diagnostic Related Groups NCMS ECG Excess cost growth New Cooperative Medical scheme DEEPENING HEALTH REFORM IN CHINA XXV
DEEPENING HEALTH REFORM IN CHINA xxv ABCS Aspirin, Blood pressure, Cholesterol, Stroke ACTION Aged Care Transition program (Singapore) AMI Acute Myocardial Infarction ARS Regional health agencies (France) BHRSS Bureau of human resource and social security CDM County, District, or Municipality CHC Community Health Center CIHI Canadian Institute of Health Information CIP Capital Investment Planning CMS Centers for Medicare and Medicaid Services CNHDRC China National Health Development Research Center CoG Council of Governors (England) CON Certificate of Need CPAS Central physician appointment system CQI Continuous Quality Improvement CT Computerized tomography DRGs Diagnostic Related Groups ECG Excess cost growth EHR Electronic Health Record system ED Emergency Department FT Foundation Trust (England) GDP Gross Domestic Product GP General Practitioners HCA Health Care Alliance HMC Hospital Management Center/Council HRH Human Resource for Health IHI Institute for Healthcare Improvement IMF International Monetary Fund IOM Institute of Medicine IT Information Technology LLG Local Leading Group MDT Multi-Disciplinary Teams MoF Ministry of Finance MoHRSS Ministry of Human Resource and Social Security MQCCs Medical quality control committees MSMGC Medical service management and guidance center MTEF Medium-Term Expenditure Framework NCDs Non-Communicable Diseases NCMS New Cooperative Medical scheme Abbreviations
xxvi DEEPENING HEALTH REFORM IN CHINA NCQA National Committee for QI Quality improvement Quality Assurance RMB Ren Min Bi(Chinese Yuan) NDRC National Development and SATCM State Administration of Reform Commission Traditional Chinese Medicine NFO Non-for-profit Organization SCHRO State Council Health Reform NHCQC National Health Care Quality Office Council SES Secretariat of Health of the NHFPC National Health and Family State Government of Sao Planning Commission Paulo(Brazil) NHS National Health Service SFDA State Food and Drug NICE National Institute for Health Administration and Care Excellence SROS Regional Strategy Health NSW New South Wales Plans(France) OECD Organization for Economic THC Township Health Center Cooperation and TLC Transformation Learning Development Collaboratives OOP Out-of-Pocket Spending TOM Total Quality Management OSS Social Organization(Brazil) UAE United Arab Emirates P4Q Pay-for-Quality UEBMI Urban Employee Basic PCIC People-Centered Integrated medical Insurance scheme Care model UK United Kingdom PCMH Patient-Centered Medical URBMI Urban Resident Basic Medical Home Insurance scheme PCP Primary health Care Provider US United States PDSA Plan-Do-Study-Act cycle VBP Value-based purchasing PHC Primary Health Care VC Village Clinic PLG Provincial Leading Group VHA Veterans Health PPP Purchasing power parity Administration PREMs Patient-reported experience VTE Venous Thromboembolism measures WHO World Health Organization PROMs Patient-reported outcome WMS Weighted Management Score measures
xxvi DEEPENING HEALTH REFORM IN CHINA NCQA National Committee for Quality Assurance NDRC National Development and Reform Commission NFO Non-for-profit Organization NHCQC National Health Care Quality Council NHFPC National Health and Family Planning Commission NHS National Health Service NICE National Institute for Health and Care Excellence NSW New South Wales OECD Organization for Economic Cooperation and Development OOP Out-of-Pocket Spending OSS Social Organization (Brazil) P4Q Pay-for-Quality PCIC People-Centered Integrated Care model PCMH Patient-Centered Medical Home PCP Primary health Care Provider PDSA Plan-Do-Study-Act cycle PHC Primary Health Care PLG Provincial Leading Group PPP Purchasing power parity PREMs Patient-reported experience measures PROMs Patient-reported outcome measures QI Quality improvement RMB Ren Min Bi (Chinese Yuan) SATCM State Administration of Traditional Chinese Medicine SCHRO State Council Health Reform Office SES Secretariat of Health of the State Government of Sao Paulo (Brazil) SFDA State Food and Drug Administration SROS Regional Strategy Health Plans (France) THC Township Health Center TLC Transformation Learning Collaboratives TQM Total Quality Management UAE United Arab Emirates UEBMI Urban Employee Basic medical Insurance scheme UK United Kingdom URBMI Urban Resident Basic Medical Insurance scheme US United States VBP Value-based purchasing VC Village Clinic VHA Veterans Health Administration VTE Venous Thromboembolism WHO World Health Organization WMS Weighted Management Score
Introduction Deepening health sector reform is arguably insurance coverage,for example,the cover- one of the major social undertakings facing age stayed above 95%.Service capacity has China.In 2009,China unveiled an ambitious increased,utilization of health services has national health care reform program,com- risen and out of pocket spending as share of mitting to significantly raise health spend- total health expenditures has fallen,leading ing with the goal to provide affordable, to a more equitable access to care and greater equitable and effective health care for all by affordability.For example,by 2014 reim- 2020.Building on an earlier wave of reforms bursement rates for inpatient services of the that established a national health insurance three main social insurance schemes(UEBMI, system,the 2009 reforms,supported by an URBMI and NCMS)were raised and differ- initial financial commitment of RMB 1380 ences significantly narrowed,reaching 80,70 billion,reaffirmed the government's role in and 75 percent respectively.Twelve categories the financing of healthcare and provision of of basic public services,including care for public goods.After nearly six years of imple- several chronic conditions are now covered mentation,China has made a number of very free of charge.The essential drug program is noteworthy gains.It has achieved universal contributing to reducing irrational drug use health insurance(HI)coverage at a speed that and improving access to effective drugs.The has few precedents globally or historically. reform,including subsequent regulations,has Benefits have also been gradually expanded. encouraged greater private sector participa- For example,the New Rural Cooperative tion in part to reduce overcrowding in public Medical Scheme (NRCMS),which targets facilities.The governments have input huge rural populations,has become more com- amount of financial resources in the con- prehensive,incrementally adding outpatient struction of primary healthcare facilities.The benefits while including coverage for specific capacity of primary healthcare services have diseases.Treatment for many conditions no been greatly strengthened.Finally,the reform longer represents a poverty-inducing shock also spearheaded hundreds of innovative for rural residents. pilots in health financing,public hospitals Fueled by massive investments in health and grassroots service delivery-several of infrastructure and human resource forma- which are examined in this report-and pro- tion at the grassroots level,significant expan- vide a strong foundation for the next stage sion of access to basic public health services of reform.China is progressing quickly to and achievement of near-universal health achieving universal health coverage and some DEEPENING HEALTH REFORM IN CHINA xxvii
DEEPENING HEALTH REFORM IN CHINA xxvii Deepening health sector reform is arguably one of the major social undertakings facing China. In 2009, China unveiled an ambitious national health care reform program, committing to significantly raise health spending with the goal to provide affordable, equitable and effective health care for all by 2020. Building on an earlier wave of reforms that established a national health insurance system, the 2009 reforms, supported by an initial financial commitment of RMB 1380 billion, reaffirmed the government’s role in the financing of healthcare and provision of public goods. After nearly six years of implementation, China has made a number of very noteworthy gains. It has achieved universal health insurance (HI) coverage at a speed that has few precedents globally or historically. Benefits have also been gradually expanded. For example, the New Rural Cooperative Medical Scheme (NRCMS), which targets rural populations, has become more comprehensive, incrementally adding outpatient benefits while including coverage for specific diseases. Treatment for many conditions no longer represents a poverty-inducing shock for rural residents. Fueled by massive investments in health infrastructure and human resource formation at the grassroots level, significant expansion of access to basic public health services and achievement of near-universal health insurance coverage, for example, the coverage stayed above 95%. Service capacity has increased, utilization of health services has risen and out of pocket spending as share of total health expenditures has fallen, leading to a more equitable access to care and greater affordability. For example, by 2014 reimbursement rates for inpatient services of the three main social insurance schemes (UEBMI, URBMI and NCMS) were raised and differences significantly narrowed, reaching 80, 70 and 75 percent respectively. Twelve categories of basic public services, including care for several chronic conditions are now covered free of charge. The essential drug program is contributing to reducing irrational drug use and improving access to effective drugs. The reform, including subsequent regulations, has encouraged greater private sector participation in part to reduce overcrowding in public facilities. The governments have input huge amount of financial resources in the construction of primary healthcare facilities. The capacity of primary healthcare services have been greatly strengthened. Finally, the reform also spearheaded hundreds of innovative pilots in health financing, public hospitals and grassroots service delivery – several of which are examined in this report – and provide a strong foundation for the next stage of reform. China is progressing quickly to achieving universal health coverage and some Introduction