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

The Changing of Composition of Total Health Expenditure in China 2

Total Health Expenditure in Shanghai 3

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 4 (Opinions of the CPC Central Committee and the State Council on Deepening The Health Care System Reform, April 7, 2009)

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 5 (Opinions of the CPC Central Committee and the State Council on Deepening The Health Care System Reform, April 7, 2009)

Strengthening Capacity Building of Public Health Services CHC in QinghaiCHC in Shanghai 6

The Trend of Clinical Visits in CHCs 7 Year

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

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 ( ) 9

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

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

Financial Expenditure in Health from Central Government in 2009 ProgramsBillion% Improvement of RCMS, urban medical insurance. Financial subsidies increase to 80 Yuan per capita Medical aid for bankrupt enterprises and retirees Strengthening grass-root health system, including 2000 county hospitals, 5000 township health centers, 2400 community health centers and village posts in removal areas Public health and prevention and control infectious diseases Equality of basic public health services, in 2009 no less than 15 Yuan per capita, and 20 Yuan by Total

Shanghai Government sets the Community Health Service as a Priority in Recent 12 Years 240 community health centers were established in in Shanghai 10 nursing homes were built up in demonstrated community health centers were established in standardized community health centers were built up between township health centers were rebuilt and transformed to be standardized community health care centers in The standardized construction of 100 village health posts was established in By the year of 2009, total 48 rural community health centers and 426 village health posts have been completed the construction 13

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 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 14

In 2008, total number of 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 15

e-Health Database in CHCs 16

Service items Service volume per annum Service items Service Volume per annum Home care home bed Chronic disease surveillance 2.95 million Establishing Health profile for elderly 92%MCH services173,000 Health profile for residents 1.38 millionHealth education3.66 million No. of families contracted with preventive service s 454,000 Rehabilitation services 486,000 Hotline service343,000 Community nursing care million Providing Health Services by CHCs in Shanghai 17

Drugstore in CHCs 18

Cost of Service in CHCs in Shangha i The average cost per visit was 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) 19

Irrational Use of Drugs in CHCs CHC in QinghaiCHC in Hangzhou 20

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

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) 22

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 23

The Public Health Service Fund per Capita in Shanghai 24 UrbanLocal Residents Register Immigrant Huangpu4114 Luwan5025 Xuhui50 Changning52 Jingan50— Putuo4020 Zhabei40— Hongkou5025 Yangpu40 SuburbLocal Residents Register Immigrant Pudong5025 Baoshan6030 Minghang45 Jiading5025 Songjiang50 Jinshan4020 Qingpu4020 Nanhui40 Fengxian4024 Chongming4020

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

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 26

Thank You For Your Attention 27