Brief Introduction of Community Healthcare Reform in China

1. Brief Introduction of Community Healthcare Reform in China Shanlian Hu. MD. MSc. Professor School of Public Health Fudan University June 5, 2009 Shanghai

2. The Changing of Composition of Total Health Expenditure in China

3. Total Health Expenditure in Shanghai

4. Strengthening the Building of Urban Community Health Centers • Efforts should be made to improve the new urban health care service system on the basis of community health care services • Quicken the building of the urban community health care service network with community health centers as the main body (Opinions of the CPC Central Committee and the State Council on Deepening The Health Care System Reform, April 7, 2009)

5. Changing Community Health Care Service Mode • Transform the community health care service mode, continuously raise the service level, take the initiative to offer services, provide household visits and gradually assume the responsibility and duties of the “gate-keeper” for residents’ health (Opinions of the CPC Central Committee and the State Council on Deepening The Health Care System Reform, April 7, 2009)

6. Strengthening Capacity Building of Public Health Services CHC in Qinghai CHC in Shanghai

7. The Trend of Clinical Visits in CHCs Year

8. Number of Outpatients & Inpatients in Community Health Centers in China in 2007 (10 Thousand) (x 100) (Source: Chinese Health Statistical Digest 2008)

9. Reforming Compensation Mechanism For Health Care Institutions • Government is responsible for their basic construction, equipment purchase, staffing costs and public health service costs • Drugs are sold at zero price margin, the revenue from drug sale will no longer be compensation sources • To explore separated management of expenditure and revenue of health care institutions at grass-roots levels Implementation plan for the Recent Priorities of the Health Care System Reform (2009-2011)

10. The Share of Total Health Expenditure in GDP in China G D P % 年 度 （China National Health Accounts Report 2008）

11. The Basic Situation of Total Drug Expenditure in China The total health expenditure in 2007 was 1128.9 billion Yuan (RMB) The share of total drug expenditure was 39.3% (471.5 billion) The average health expenditure per capita was 854.4 Yuan (RMB), and the average drug expenditure per capita was 357.03 Yuan (RMB) equal to $52.35USD 76.4% volume and value of drugs was sale through hospitals

12. Financial Expenditure in Health from Central Government in 2009

13. Shanghai Government sets the Community Health Service as a Priority in Recent 12 Years • 240 community health centers were established in1997-1998 in Shanghai • 10 nursing homes were built up in 1999 • 20 demonstrated community health centers were established in 2000 • 84 standardized community health centers were built up between 2001-2002 • 104 township health centers were rebuilt and transformed to be standardized community health care centers in 2003-2005 • The standardized constructionof 100 village health posts was established in 2006-2008 • By the year of 2009, total 48 rural community health centers and 426 village health posts have been completed the construction

14. Community Health Care in Shanghai • Community health care network has been built up • Each community health center is covered about 100,000 population, and each health station, about 15-20 thousand population, the service radius is 15 minutes by foot • At present, there are 2981 General Practicians existing in Shanghai, but only 33 physician have had a higher degree and position

15. In 2008, total number of 55.93 million clinical visits in township heath centers and community health center were shared 37.21% of total ambulatory service in Shanghai, if it included service volume from village health posts, the proportion would be increased to 44% • e-health information or profile system has been gradually established in Shanghai • Global budget control payment system has been used in urban medical insurance scheme

16. e-Health Database in CHCs

17. Providing Health Services by CHCs in Shanghai

18. Drugstore in CHCs

19. Cost of Service in CHCs in Shanghai • The average cost per visit was 117.88 Yuan (RMB) in 2008, 40.3% lower than that in secondary hospital • The average cost per patient admitted to CHCs was 4708 Yuan (RMB), which was only half of the cost compared with all urban hospitals (Source: Sun XM 2009)

20. Irrational Use of Drugs in CHCs CHC in Qinghai CHC in Hangzhou

21. Zero-Markup Policy of Essential Medicines in Shanghai CHCs • There are 232 community health centers & 686 health stations in Shanghai • The annual volume of clinical visits in CHCs was around 40 million, equal to one thirds of ambulatory service • The number of beds in home care was 60 thousand • Zero markup policy of essential medicines has been conducted since December 28 in 2008

22. Zero-Markup Policy of Essential Medicines in Shanghai CHCs • 166 essential medicines (1600 strengths)，including 87 western medicines and 79 traditional medicines , were selected on zero-markup rate • About 165 million Yuan (RMB) should be compensated by urban employee’s medical insurance scheme (122 million) and government subsidies (43 million) • The total compensation for all community health care running zero-markup policy in Shanghai was 86.9 billion RMB, each CHC costs variously at the range of 3 million and (Qingpu District & Chongming county) up to 28 million (Pudong District)

23. Ensuring Funding for Public Health Services • Funding standard for basic public health services will be increased • In 2009, the average per capita public health funding shall be no less than 15 Yuan, and no less than 20 Yuan by 2011 • The central government will grant subsidies to the regions with financial difficulties through transfer payments

24. The Public Health Service Fund per Capita in Shanghai

25. The Investment of Health Expenditure per Capita in Different Districts in Shanghai (2007)

26. Conclusions • From commercial point of view, community health care creates a huge market for pharmaceuticals, vaccines and medical device sales • There are many strengthens, weakness, opportunities and threats in future community health market

27. Thank You For Your Attention