xxviii DEEPENING HEALTH REFORM IN CHINA of the reform achievements have attracted hospital-centric,fragmented and volume- worldwide attention. driven.Cost-inducing provider incentives China now faces emerging challenges in and lack of attention to quality are major sys- meeting the health care needs of her citi- tem shortcomings.The delivery system has zens,associated with a rapidly aging society, a bias toward doing more treatment rather increasing burden of non-communicable dis- than improving population health outcomes eases(NCDs)and rising prevalence of risk and for admitting patients to hospitals rather factors.Reductions in mortality and fertil- than treating them at the primary care level. ity trends led to a rapidly aging society while Services are unintegrated (or uncoordinated) social and economic transformation brought across provider tiers (e.g.,tertiary,second- urbanization and changed life styles,lead- ary and primary)and between preventive ing to emerging risk factors of obesity,sed- and curative services.Given the high preva- entary lifestyles,stress,smoking,abuse of lence of NCDs,this suggests that care is alcohol and other substances,and exposure suboptimal.Health financing is institution- to pollution and traffic accidents.NCDs are ally fragmented and insurance agencies have already China's number one health threat. remained passive purchasers of health ser- These trends add to the complexity China is vices.Effective engagement with the private facing,and to which the health system will sector is in its infancy and service planning have to respond in order to prevent disease has not been modernized.There is a short- through reducing the major risk factors for age of qualified medical and health workers chronic disease,addressing those influences at the primary care level,which further com- that drive exposure to these risk factors(such promises the system's ability to carry out the as the environment),and ensuring the provi- core functions of prevention,case detection, sion of services that meet the requirements of early treatment and care integration. those with chronic health problems.Rising Recognizing these challenges,China's incomes and levels of education contribute leaders have adopted far-reaching policies to to population demands for more and better put in place a reformed delivery system.On health services.China's health system will October 29,2015 the 18th Session of the Cen- be judged on how well it handle these new tral Committee of the Fifth Plenary Session of challenges. the CPC endorsed a national strategy known China needs to avoid the risks of devel- as“Healthy China”which places population oping into a high cost and low-value health health improvement as the main system goal. system(see Box I.1).The health system is This strategy will guide the planning and BOX I.1 What is Value in Health Care? Value is defined as health outcomes for the money Low value care refers to services with little or no spent(Porter,2010).Others offer a more expanded benefit in terms of health outcomes,are clinically inef- definition involving a combination of [better out- fective or even harmful,and are cost ineffective (com- comes,quality and patient safety,and [lowerl costs pared to alternatives).The term encompasses multiple (IOM,2010).In terms of reform or change strategies concepts (and terms)that contribute to excess costs, to improve health services,value involves"shift[ingl low quality care and poor health outcomes,includ- the focus from the volume and profitability of services ing inappropriate care,unsafe care,unnecessary care, provided-physicians visits,hospitalizations,proce- overutilization,misuse,overtreatment,over diag- dures,and [diagnostic]tests-to the patient outcomes nosis,missed prevention opportunities,and waste achieved"(Porter,2010:3).The concept involves (Busse,et al.,2015). making effective linkages between health care and health outcomes
xxviii DEEPENING HEALTH REFORM IN CHINA of the reform achievements have attracted worldwide attention. China now faces emerging challenges in meeting the health care needs of her citizens, associated with a rapidly aging society, increasing burden of non-communicable diseases (NCDs) and rising prevalence of risk factors. Reductions in mortality and fertility trends led to a rapidly aging society while social and economic transformation brought urbanization and changed life styles, leading to emerging risk factors of obesity, sedentary lifestyles, stress, smoking, abuse of alcohol and other substances, and exposure to pollution and traffic accidents. NCDs are already China’s number one health threat. These trends add to the complexity China is facing, and to which the health system will have to respond in order to prevent disease through reducing the major risk factors for chronic disease, addressing those influences that drive exposure to these risk factors (such as the environment), and ensuring the provision of services that meet the requirements of those with chronic health problems. Rising incomes and levels of education contribute to population demands for more and better health services. China’s health system will be judged on how well it handle these new challenges. China needs to avoid the risks of developing into a high cost and low-value health system (see Box I.1). The health system is hospital-centric, fragmented and volumedriven. Cost-inducing provider incentives and lack of attention to quality are major system shortcomings. The delivery system has a bias toward doing more treatment rather than improving population health outcomes and for admitting patients to hospitals rather than treating them at the primary care level. Services are unintegrated (or uncoordinated) across provider tiers (e.g., tertiary, secondary and primary) and between preventive and curative services. Given the high prevalence of NCDs, this suggests that care is suboptimal. Health financing is institutionally fragmented and insurance agencies have remained passive purchasers of health services. Effective engagement with the private sector is in its infancy and service planning has not been modernized. There is a shortage of qualified medical and health workers at the primary care level, which further compromises the system’s ability to carry out the core functions of prevention, case detection, early treatment and care integration. Recognizing these challenges, China’s leaders have adopted far-reaching policies to put in place a reformed delivery system. On October 29, 2015 the 18th Session of the Central Committee of the Fifth Plenary Session of the CPC endorsed a national strategy known as “Healthy China” which places population health improvement as the main system goal. This strategy will guide the planning and Value is defined as health outcomes for the money spent (Porter, 2010). Others offer a more expanded definition involving a combination of [better] outcomes, quality and patient safety, and [lower] costs (IOM, 2010). In terms of reform or change strategies to improve health services, value involves “shift[ing] the focus from the volume and profitability of services provided – physicians visits, hospitalizations, procedures, and [diagnostic] tests – to the patient outcomes achieved” (Porter, 2010:3). The concept involves making effective linkages between health care and health outcomes. BOX I.1 What is Value in Health Care? Low value care refers to services with little or no benefit in terms of health outcomes, are clinically ineffective or even harmful, and are cost ineffective (compared to alternatives). The term encompasses multiple concepts (and terms) that contribute to excess costs, low quality care and poor health outcomes, including inappropriate care, unsafe care, unnecessary care, overutilization, misuse, overtreatment, over diagnosis, missed prevention opportunities, and waste (Busse, et al., 2015)
INTRODUCTION XXiX implementation of health reforms under the service planning.These are some of the 13th Five-year Development Plan,2016-2020 essential features and supporting elements (see Box I.2).The Government has also ini- of a value-driven delivery system that incor- tiated enabling legislative actions.The Basic porates a new service delivery model,the Health Care Law,which will define the full adoption of which will facilitate achiev- essential elements of the health care sector ing China's vision of service delivery reform. including financing,service delivery,phar- However,while important progress has been maceuticals,private investment,etc.has been observed,it is mostly limited to pilot projects. included in the legislative plan of National This suggests strengthening implementation People's Congress of China and is being for- and emphasizing scale-up.Acknowledging mulated by the congress.CPC Central Com- the difficulty of implementing these reforms mittee Suggestions for the 13th Development and time required to achieve scale,they are Plan as well as recent policy directives(Guo collectively referred to as reforms of the Wei Ji Ceng Fa,no.93,2015)contain the emerging“deep water”phase. fundamental components of service deliv- China also faces an unenviable conun- ery reform.For example,policies emphasize drum,in that as its economy is slowing strengthening the three-tiered system,includ- down,health spending is not likely to follow ing primary care and community-based ser- suit.Indeed,as the population ages and new vices,human resources reform,optimizing technologies get further integrated in pre- use of social insurance,and encouraging pri- ferred treatment options,the upward pres- vate investment("social capital")to sponsor sures on health spending will become even health care.Policies also support "people first more pronounced.In the face of these oppos- principles"such as building harmonious rela- ing trends,China will soon need to come tionships with patients,promoting greater up with a new model of health production, care integration between hospitals and pri- financing and delivery,which responds to the mary care facilities through tiered service needs and expectations of its population but delivery and use of multidisciplinary teams at the same time is grounded in the economic and facility networks,shifting resources reality of today,based on the economic new towards the primary level,linking curative normal.China has already decided that and preventive care,reforming public hos- doing nothing is not an option:continuing to pital governance and strengthening regional provide quality health services in the current BOX I.2 Suggestions of the CPC Central Committee on the 13th Five-year Plan for National Economic and Social Development on the promotion of a"Healthy China" (pp.42-43,English translation) "China will deepen the reform of the medical and of medical resources to the grassroots level and rural health systems,promote the interaction of medical areas,and promote work concerning general prac- services,health insurance and pharmaceutical supply, titioners,family doctors,and the medical service implement the tiered delivery system and establish capacity of highly needed areas,and electronic medi- primary care and modern health care systems that cal records. cover both urban rural areas. Efforts should be made to encourage social forces Efforts should be made to optimize the layout to develop the health service industry,promote the of medical institutions,improve the medical service equal treatment of non-profit private hospitals and system featuring the interaction and complementar- public hospitals,strengthen supervision and control ity of higher and lower levels of institutions,improve of medical quality,improve mechanisms for dispute the model of medical service at the grassroots level, resolution,and build harmonious relations between develop distance medical service,promote the flow doctors and patients
INTRODUCTION xxix implementation of health reforms under the 13th Five-year Development Plan, 2016–2020 (see Box I.2). The Government has also initiated enabling legislative actions. The Basic Health Care Law, which will define the essential elements of the health care sector including financing, service delivery, pharmaceuticals, private investment, etc. has been included in the legislative plan of National People’s Congress of China and is being formulated by the congress. CPC Central Committee Suggestions for the 13th Development Plan as well as recent policy directives (Guo Wei Ji Ceng Fa, no. 93, 2015) contain the fundamental components of service delivery reform. For example, policies emphasize strengthening the three-tiered system, including primary care and community-based services, human resources reform, optimizing use of social insurance, and encouraging private investment (“social capital”) to sponsor health care. Policies also support “people first principles” such as building harmonious relationships with patients, promoting greater care integration between hospitals and primary care facilities through tiered service delivery and use of multidisciplinary teams and facility networks, shifting resources towards the primary level, linking curative and preventive care, reforming public hospital governance and strengthening regional service planning. These are some of the essential features and supporting elements of a value-driven delivery system that incorporates a new service delivery model, the full adoption of which will facilitate achieving China’s vision of service delivery reform. However, while important progress has been observed, it is mostly limited to pilot projects. This suggests strengthening implementation and emphasizing scale-up. Acknowledging the difficulty of implementing these reforms and time required to achieve scale, they are collectively referred to as reforms of the emerging “deep water” phase. China also faces an unenviable conundrum, in that as its economy is slowing down, health spending is not likely to follow suit. Indeed, as the population ages and new technologies get further integrated in preferred treatment options, the upward pressures on health spending will become even more pronounced. In the face of these opposing trends, China will soon need to come up with a new model of health production, financing and delivery, which responds to the needs and expectations of its population but at the same time is grounded in the economic reality of today, based on the economic new normal. China has already decided that doing nothing is not an option: continuing to provide quality health services in the current “China will deepen the reform of the medical and health systems, promote the interaction of medical services, health insurance and pharmaceutical supply, implement the tiered delivery system and establish primary care and modern health care systems that cover both urban rural areas. Efforts should be made to optimize the layout of medical institutions, improve the medical service system featuring the interaction and complementarity of higher and lower levels of institutions, improve the model of medical service at the grassroots level, develop distance medical service, promote the flow BOX I.2 Suggestions of the CPC Central Committee on the 13th Five-year Plan for National Economic and Social Development on the promotion of a “Healthy China” (pp. 42–43, English translation) of medical resources to the grassroots level and rural areas, and promote work concerning general practitioners, family doctors, and the medical service capacity of highly needed areas, and electronic medical records. Efforts should be made to encourage social forces to develop the health service industry, promote the equal treatment of non-profit private hospitals and public hospitals, strengthen supervision and control of medical quality, improve mechanisms for dispute resolution, and build harmonious relations between doctors and patients
XXX DEEPENING HEALTH REFORM IN CHINA arrangement will result in increasing health diseases,aging populations and cost pres- costs and a heavier burden on the state exche- sures.Drawing on commissioned case work quer or households or both.In fact,since and analysis as well as the broader litera- reforms take time to work their way through ture,the report summarizes lessons learned the complex healthcare system,the time to from Chinese and international experiences implement and scale-up transformative mea- and recommends actions to support policy sures is now,before it gets too late and even implementation. more expensive. The report is intended for central and pro- In moving forward with the delivery vincial level policy makers and regulators as reforms,China should consider maintain- well as planners and implementers at the local ing its focus on achieving more health rather level,including insurers and providers.Policy than more treatment.This would suggest makers may want to focus on the recom- shifting the focus from rewarding volume mended levers and corresponding core actions. and sales to rewarding health outcomes,and The strategies for central and provincial gov- achieving more value for the money spent.It ernment proposed in the implementation would also suggest paying particular atten- model described in last chapter would also be tion to providing affordable and equitable an area of interest for this group.Meanwhile, health care for all population groups,so that planners and implementers can center their the poor and disadvantaged people do not attention on the core actions and correspond- face the risks of catastrophic medical spend- ing specific implementation strategies.They ing and forego medical care because of unaf- would also benefit from the front line elements fordability.Making the shift from a health of the proposed implementation model. care delivery system focused on production Before proceeding,a couple of caveats are of treatments to one focused on value and in order.First,this study centers on reforms producing health suggests a strategic agenda to improve health service delivery and the that aligns all stakeholders and works toward supporting financial and institutional envi- three goals:(i)attaining better health for the ronment in China.Resource and time con- population;(ii)providing better quality and straints did not allow for analysis of other care experience for individuals and families; important reform themes which can be the and (iii)achieving affordable costs. subject of future research.These include: pharmaceutical industry,tobacco industry, Objectives and Audience education and licensing of medical profes- sionals,traditional Chinese medicine (and The objective of this report is to provide its integration with Western medicine)and advice on core actions and implementation dissemination and use of medical technolo- strategies in support of China's vision and gies.Some of the linkages between aged care, policies on health reform particularly in rela- health care and social services will be taken tion to service delivery.A more immediate up in a forthcoming WBG study Second,it objective is to contribute technical inputs for is important to keep in mind that this report the preparation of the 13th Development Plan. is a summary of findings and recommenda- There is much to learn from national and tions.The final report will expand upon the international innovations and experiences major themes and recommendations pre- to successfully reform service delivery.In sented herein. China,for example,there are many success- ful pilot initiatives that have not yet been scaled up.These initiatives represent oppor- Report Structure tunities that China can build upon and scale Chapter 1 summarizes the major health and up these experiments to shape a world class health system challenges facing China and service delivery system.At the same time, provides a rationale for the recommendations China can draw on OECD countries that detailed in this report.More specific chal- are reshaping their health delivery systems to lenges are highlighted in each of the subse- address similar challenges posed by chronic quent chapters according to theme
xxx DEEPENING HEALTH REFORM IN CHINA arrangement will result in increasing health costs and a heavier burden on the state exchequer or households or both. In fact, since reforms take time to work their way through the complex healthcare system, the time to implement and scale-up transformative measures is now, before it gets too late and even more expensive. In moving forward with the delivery reforms, China should consider maintaining its focus on achieving more health rather than more treatment. This would suggest shifting the focus from rewarding volume and sales to rewarding health outcomes, and achieving more value for the money spent. It would also suggest paying particular attention to providing affordable and equitable health care for all population groups, so that the poor and disadvantaged people do not face the risks of catastrophic medical spending and forego medical care because of unaffordability. Making the shift from a health care delivery system focused on production of treatments to one focused on value and producing health suggests a strategic agenda that aligns all stakeholders and works toward three goals: (i) attaining better health for the population; (ii) providing better quality and care experience for individuals and families; and (iii) achieving affordable costs. Objectives and Audience The objective of this report is to provide advice on core actions and implementation strategies in support of China’s vision and policies on health reform particularly in relation to service delivery. A more immediate objective is to contribute technical inputs for the preparation of the 13th Development Plan. There is much to learn from national and international innovations and experiences to successfully reform service delivery. In China, for example, there are many successful pilot initiatives that have not yet been scaled up. These initiatives represent opportunities that China can build upon and scale up these experiments to shape a world class service delivery system. At the same time, China can draw on OECD countries that are reshaping their health delivery systems to address similar challenges posed by chronic diseases, aging populations and cost pressures. Drawing on commissioned case work and analysis as well as the broader literature, the report summarizes lessons learned from Chinese and international experiences and recommends actions to support policy implementation. The report is intended for central and provincial level policy makers and regulators as well as planners and implementers at the local level, including insurers and providers. Policy makers may want to focus on the recommended levers and corresponding core actions. The strategies for central and provincial government proposed in the implementation model described in last chapter would also be an area of interest for this group. Meanwhile, planners and implementers can center their attention on the core actions and corresponding specific implementation strategies. They would also benefit from the front line elements of the proposed implementation model. Before proceeding, a couple of caveats are in order. First, 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 Second, 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. Report Structure Chapter 1 summarizes the major health and health system challenges facing China and provides a rationale for the recommendations detailed in this report. More specific challenges are highlighted in each of the subsequent chapters according to theme
INTRODUCTION xxxi The next eight chapters constitute the sets of actions.To be sure,actions taken by main body of the report and are divided into front line providers will require strong insti- two parts (see Box I.3).The first centers on tutional support combined with financial and “downstream”service delivery and the sec- human resource reforms in order to achieve ond on the“upstream”enabling financial and the aforementioned triple goals.In short,the institutional environment to support service eight levers represent a comprehensive pack- delivery reforms.Each chapter concentrates age of interventions to deepen health reform. on a single“lever”or strategic direction to A short description of the contents of each support the planning and implementation of part follows. government's vision of service delivery reform. The levers aim to provide policy implementa- Part 1:Service Delivery:How health services tion guidance to all governmental levels.Each are organized and delivered,and how provid- lever contains a set of recommended core ers relate to each other and to patients,mat- action areas and corresponding implementa- ter.People-Centered Integrated Care(PCIC) tion strategies to guide the 'what'and how' is the term used to refer to a health care deliv- of deepening service delivery reform. ery model that is organized around the health These levers are interlocked and should not needs of individuals and families.PCIC is be considered or implemented as independent also is referred to in the recently proposed BOXI.3 Report Structure Chap.no. Chapter Title(and "lever"number) 1 Background:Impressive gains in health outcomes but substantial challenges remain Part I:Service Delivery Levers 2 Shaping a tiered health care delivery system in accordance with People-Centered Integrated Care(PCIC)models(lever 1) 3 Improving quality of care in support to PCIC(lever 2) Engaging citizens in support of PCIC(lever 3) Reforming public hospitals and improving their performance (lever 4) Part 2:Institutional and Financial Environment Levers 6 Realigning incentives in purchasing and provider payment(lever 5) 7 Strengthening health work force for PCIC(lever 6) 8 Strengthening private sector engagement in production and delivery of health services(lever 7) 9 Modernizing health service planning to guide investment(lever 8) Part 3:Moving Forward with Implementation 10 Strengthening implementation of service delivery reform
INTRODUCTION xxxi The next eight chapters constitute the main body of the report and are divided into two parts (see Box I.3). The first centers on “downstream” service delivery and the second on the “upstream” enabling financial and institutional environment to support service delivery reforms. Each chapter concentrates on a single “lever” or strategic direction to support the planning and implementation of government’s vision of service delivery reform. The levers aim to provide policy implementation guidance to all governmental levels. Each lever contains a set of recommended core action areas and corresponding implementation strategies to guide the ‘what’ and ‘how’ of deepening service delivery reform. These levers are interlocked and should not be considered or implemented as independent sets of actions. To be sure, actions taken by front line providers will require strong institutional support combined with financial and human resource reforms in order to achieve the aforementioned triple goals. In short, the eight levers represent a comprehensive package of interventions to deepen health reform. A short description of the contents of each part follows. Part 1: Service Delivery: How health services are organized and delivered, and how providers relate to each other and to patients, matter. People-Centered Integrated Care (PCIC) is the term used to refer to a health care delivery model that is organized around the health needs of individuals and families. PCIC is also is referred to in the recently proposed BOX I.3 Report Structure Chap. no. 1 2 3 4 5 6 7 8 9 10 Chapter Title (and “lever” number) Background: Impressive gains in health outcomes but substantial challenges remain Part 1: Service Delivery Levers Shaping a tiered health care delivery system in accordance with People-Centered Integrated Care (PCIC) models (lever 1) Improving quality of care in support to PCIC (lever 2) Engaging citizens in support of PCIC (lever 3) Reforming public hospitals and improving their performance (lever 4) Part 2: Institutional and Financial Environment Levers Realigning incentives in purchasing and provider payment (lever 5) Strengthening health work force for PCIC (lever 6) Strengthening private sector engagement in production and delivery of health services (lever 7) Modernizing health service planning to guide investment (lever 8) Part 3: Moving Forward with Implementation Strengthening implementation of service delivery reform
xxxii DEEPENING HEALTH REFORM IN CHINA WHO global strategy of People-Centered are experimenting with PCIC approaches and Integrated Health Services(WHO,2015, to address the same set of challenges facing a,b).PCIC consists of a set of characteris- China:cost escalation,questionable quality tics that seek to achieve better health and and stagnant gains in health outcomes.Ger- better quality at affordable costs,or in other many,Denmark,Australia,New Zealand, words,more value for the money spent.It US,UK,Brazil,Singapore and Canada are is not a one-size-fits all model.How PCIC some of the countries testing reformed service is implemented in practice depends on local delivery models that incorporate features of conditions. PCIC.Though expanding rapidly,PCIC-like Based on the aforementioned WHO strat- approaches remain local or regional in most egy and the broader literature,PCIC involves of these countries.Preliminary results suggest a number of strategic directions,referred that gains can be made in outcomes,qual- toas“levers”,at the service delivery level,. ity and cost containment,but results vary including (i)reorienting the model of care considerably within and across countries. particularly in terms of strengthening pri- Implementing these reforms at scale would mary health care,changing the roles of hos- make China a world leader in reform service pitals and integrating providers across care delivery and at the vanguard in health system levels and among types of services;(ii)con- innovation and development with insightful tinuously improving the quality of care;and lessons for many countries. (iii)engaging people to make better decisions about their health and health seeking behav- Part 2:Financial and Institutional Environ- iors.A fourth lever involves improving the ment:Establishing an enabling institutional governance and management of hospitals. environment together with strengthening These are the respective topics of chapters incentives and accountabilities are under- 2-5 and constitute Part 1 of the report. lying but recognized drivers of successful Broadly,the bedrock of a high-performing PCIC implementation and improved service PCIC model is a strong primary care sys- delivery globally (WHO,2015 a).China is tem that is integrated with secondary and no different.Implementation and sustained tertiary care through formal linkages,good development of service delivery reform in data,and information sharing among provid- China will require fundamental shifts in ers and between providers and patients,and incentives,capabilities,and accountabili- active engagement of patients in their care.It ties,especially in ways that services are utilizes multidisciplinary teams of providers purchased,providers are paid,people are that track patients with eHealth tools,mea- reimbursed,and providers report on perfor- sures outcomes over the continuum of care mance and are held accountable for better and relentlessly focus on improving quality. care and alignment with public priorities. Feedback and audit mechanisms ensure con- It will require strong governance arrange- tinuous learning and quality improvement. ments and sustained high level government Curative and preventive services are inte- support.The success of PCIC,for exam- grated to provide a comprehensive experience ple,will depend on improving the primary for patients,and measurable targets for facili- care workforce,raising compensation and ties.Hospitals have new roles as providers of competencies of primary care clinicians, complex care and leaders in workforce devel- and reforming human resource manage- opment.They also adopt more robust gover- ment practices.The implementation of ser- nance arrangements and management prac- vice delivery reform will also be enhanced tices.Measurement,monitoring and feedback through developing more effective forms are based on up-to-date,easily available,and of public-private engagement.Finally,new validated data on the care,outcomes,and approaches to service and capital investment behaviors of providers and patients. planning will be required to align invest- Internationally,many countries are imple- ment planning with the new service deliv- menting PCIC-like models to address simi- ery model.Realigning incentives,develop- lar challenges facing China.Many countries ing a qualified and motivated workforce
xxxii DEEPENING HEALTH REFORM IN CHINA WHO global strategy of People-Centered and Integrated Health Services (WHO, 2015, a, b). PCIC consists of a set of characteristics that seek to achieve better health and better quality at affordable costs, or in other words, more value for the money spent. It is not a one-size-fits all model. How PCIC is implemented in practice depends on local conditions. Based on the aforementioned WHO strategy and the broader literature, PCIC involves a number of strategic directions, referred to as “levers”, at the service delivery level, including (i) reorienting the model of care particularly in terms of strengthening primary health care, changing the roles of hospitals and integrating providers across care levels and among types of services; (ii) continuously improving the quality of care; and (iii) engaging people to make better decisions about their health and health seeking behaviors. A fourth lever involves improving the governance and management of hospitals. These are the respective topics of chapters 2–5 and constitute Part 1 of the report. Broadly, the bedrock of a high-performing PCIC model is a strong primary care system that is integrated with secondary and tertiary care through formal linkages, good data, and information sharing among providers and between providers and patients, and active engagement of patients in their care. It utilizes multidisciplinary teams of providers that track patients with eHealth tools, measures outcomes over the continuum of care and relentlessly focus on improving quality. Feedback and audit mechanisms ensure continuous learning and quality improvement. Curative and preventive services are integrated to provide a comprehensive experience for patients, and measurable targets for facilities. Hospitals have new roles as providers of complex care and leaders in workforce development. They also adopt more robust governance arrangements and management practices. Measurement, monitoring and feedback are based on up-to-date, easily available, and validated data on the care, outcomes, and behaviors of providers and patients. Internationally, many countries are implementing PCIC-like models to address similar challenges facing China. Many countries are experimenting with PCIC approaches to address the same set of challenges facing China: cost escalation, questionable quality and stagnant gains in health outcomes. Germany, Denmark, Australia, New Zealand, US, UK, Brazil, Singapore and Canada are some of the countries testing reformed service delivery models that incorporate features of PCIC. Though expanding rapidly, PCIC-like approaches remain local or regional in most of these countries. Preliminary results suggest that gains can be made in outcomes, quality and cost containment, but results vary considerably within and across countries. Implementing these reforms at scale would make China a world leader in reform service delivery and at the vanguard in health system innovation and development with insightful lessons for many countries. Part 2: Financial and Institutional Environment: Establishing an enabling institutional environment together with strengthening incentives and accountabilities are underlying but recognized drivers of successful PCIC implementation and improved service delivery globally (WHO, 2015 a). China is no different. Implementation and sustained development of service delivery reform in China will require fundamental shifts in incentives, capabilities, and accountabilities, especially in ways that services are purchased, providers are paid, people are reimbursed, and providers report on performance and are held accountable for better care and alignment with public priorities. It will require strong governance arrangements and sustained high level government support. The success of PCIC, for example, will depend on improving the primary care workforce, raising compensation and competencies of primary care clinicians, and reforming human resource management practices. The implementation of service delivery reform will also be enhanced through developing more effective forms of public-private engagement. Finally, new approaches to service and capital investment planning will be required to align investment planning with the new service delivery model. Realigning incentives, developing a qualified and motivated workforce