Notice of the General Office of the State Council on Printing and Distributing the Work Arrangement for Pilot Reform of Public Hospitals in 2011
State Council Document No. [2011] 10
To:
People's Governments of all provinces, autonomous regions, and municipalities directly under the Central Government; relevant departments under the State Council:
The Work Arrangement for Pilot Reform of Public Hospitals in 2011 has been approved by the State Council and is hereby issued for implementation. Pilot reforms of public hospitals involve complex interest adjustments and are a focal point and challenge in deepening healthcare system reforms. 2011 marks the decisive year for achieving the three-year goals of the five priority reforms in healthcare and a critical phase for advancing pilot reforms of public hospitals. Success in this year’s reforms will lay a solid foundation for subsequent progress. All regions and departments must strengthen leadership, coordinate closely, organize meticulously, and ensure the expected outcomes of pilot reforms.
General Office of the State Council
February 28, 2011
Work Arrangement for Pilot Reform of Public Hospitals in 2011
I. Overall Approach
Following the principles of coordination between central and local efforts, internal dynamism, external impetus, combining short-term and long-term goals, and prioritizing practical results, this work focuses on alleviating difficulties in accessing healthcare and reducing costs. The goal is to achieve breakthroughs in improving public welfare and motivating healthcare workers. Pilot cities are encouraged to explore systemic reforms in separation of management and operation, governance restructuring, separation of medicine and medical services, and classification of for-profit/non-profit institutions, aiming to establish a foundational framework for public hospital reforms. Efforts will integrate immediate relief measures with long-term institutional reforms to ensure mutual reinforcement.
II. Major Institutional Reforms
A. Separation of Management and Operation
- Strengthen unified regulatory oversight: All healthcare institutions shall be governed by health administrative departments through unified planning, licensing, and supervision. Department heads shall not hold concurrent positions in public hospitals.
- Establish centralized governance mechanisms: Set up dedicated agencies to assume ownership responsibilities for public hospitals, overseeing asset management, financial oversight, performance evaluation, and leadership appointments.
B. Separation of Governance and Administration
- Develop corporate governance structures: Establish boards of directors or similar bodies to define roles for decision-making, execution, and oversight. Board members shall include representatives from government, healthcare institutions, patients, experts, and the public.
- Clarify accountability: Grant public hospitals independent legal status and operational autonomy while reinforcing managerial accountability. Implement transparent hospital affairs disclosure and democratic management.
- Reform leadership selection: Recruit hospital administrators through open competitions, emphasizing professional management expertise. Establish incentive and constraint mechanisms for hospital leaders.
- Optimize performance evaluation: Develop a public-interest-centric assessment system linking evaluation results to hospital funding, leadership rewards/punishments, and staff income.
- Enhance financial oversight: Implement budgetary, cost-control, and auditing systems. Explore the introduction of chief financial officers and internal/external audit mechanisms.
C. Separation of Medicine and Medical Services
- Eliminate drug-profit reliance: Phase out drug markups gradually. Compensate for revenue losses through pharmaceutical service fees and adjusted technical service charges, funded by medical insurance and government subsidies.
- Adjust service pricing: Rationalize prices for medical services reflecting technical labor value. Implement cost-control measures for large medical equipment and centralized procurement of implants. Promote case-based payment systems and other cost-transparent models.
- Secure government funding: Ensure investments for infrastructure, key disciplines, retired staff benefits, and policy-driven deficits.
D. Separation of For-Profit and Non-Profit Institutions
Strengthen regulations for non-profit institutions’ asset management, financial systems, and governance. Prohibit unauthorized conversion between institutional types. Restrict government involvement in for-profit healthcare.
III. Service System Development
A. Optimize Hospital Distribution
- Regional planning: Align hospital layouts with regional health plans, prioritizing underserved areas (e.g., suburban, pediatric, psychiatric, geriatric, and rehabilitation services).
- Resource consolidation: Adjust hospital scales and structures through new construction, relocation, or transformation.
B. Strengthen County-Level Hospitals
- Standardized construction: Build or upgrade 300+ county hospitals (including TCM hospitals) to secondary-level standards by 2011.
- Talent cultivation: Train medical professionals through residency programs and exchanges with tertiary hospitals.
- Comprehensive reforms: Pilot reforms in personnel management, payment systems, and clinical pathways in 300 selected county hospitals.
C. Integrate Primary and Tertiary Care
- Collaborative networks: Foster partnerships between urban hospitals and grassroots institutions through referral systems and telemedicine.
- Remote consultations: Establish 500 remote diagnosis systems in underserved counties by 2011.
D. Hospital Informatization
- Unified standards: Develop national IT frameworks for interoperable electronic health records and hospital management systems.
- Telehealth expansion: Promote remote diagnostics and education to leverage high-quality resources.
IV. Public Welfare Initiatives
A. Improve Patient Experience
- Appointment systems: Achieve 20% referral appointment rates and 50% follow-up appointment rates in tertiary hospitals by end-2011.
- Extended services: Offer weekend clinics and encourage off-site medical services by tertiary hospital staff.
- Nursing care: Implement high-quality nursing services in 50% of tertiary hospitals and expand to lower-level institutions.
B. Control Medical Costs
- Payment reforms: Pilot case-based, per capita, and global budgets. Negotiate payment terms between insurers and hospitals.
- Transparency: Disclose drug and service prices. Promote generic drug use and inter-institutional test result sharing.
- Cost monitoring: Set targets for expense growth rates and incorporate them into hospital performance evaluations.
C. Enhance Safety and Quality
- Clinical pathways: Expand standardized care pathways to 300+ diseases in 50% of tertiary hospitals.
- Quality control: Conduct audits and establish complaint resolution mechanisms.
V. Motivating Healthcare Workers
A. Personnel and Compensation
- Recruitment and promotion: Implement merit-based hiring and performance-linked salaries. Prioritize front-line clinical staff.
- Training programs: Train 10,000 residents and 6,000 county hospital specialists.
B. Career Development
- Regulatory reforms: Encourage physician multi-site practice and inter-institutional mobility.
- Ethical standards: Promote professionalism and combat unethical practices.
VI. Diversifying Healthcare Delivery
A. Encourage Non-Public Participation
- Policy support: Align non-public institutions with national planning and eligibility criteria for insurance reimbursements.
- Resource allocation: Reserve 10% of public hospital resources for specialized services, promoting non-profit dominance.
B. Regulatory Framework
- Standardize operations: Enforce laws against illegal medical practices and fraudulent advertising.
- Financial integrity: Ensure non-profit institutions reinvest surpluses into healthcare.
VII. Implementation Requirements
A. Leadership and Accountability
Local governments and departments must prioritize reforms, establish taskforces, and ensure policy execution.
B. Financial Support
Increase fiscal inputs for public hospitals, training programs, and IT infrastructure.
C. Public Communication
Educate healthcare workers and the public on reform benefits, fostering societal support.
End of Document