1 Working together for better Health in China Public & Private Partnership in Health Dr. Henk Bekedam WHO Representative China China Healthcare PPP Forum 21 March

Overview of Presentation  China at the crossroads  The role for the government  The role for the market  The Health system reform framework … towards universal access … towards cost control  medicine & goods … improving quality

3 China at the Crossroads Wide consensus about the problems China’s health system is “sick” and the diagnosis is clear: –“Kan Bing Nan, Kan Bing Gui” –Healthcare is available but not affordable and not accessible The problems have been detected: –Insufficient Government funding for public health/essential care; –Distorted provider payment system relying on fee-for-service; –Wide-spread exposure to health-related financial risk; –Weak quality/safety management and cost control systems; –Unclear and insufficient role of government

What is being planned?  NPC law for mid 2007  State Council set up a ministerial co-ordination working group early 2006 for deepening health system reform in China; it includes 14 ministries and is led by NDRC and Ministry of Health  Health management and service operation (MoH and NDRC)  Financing investment mechanisms (MoF and NDRC)  Medical security systems including urban basic medical insurance, RCMS, and MFA (MoLSS and MoH)  Pharmaceutical distribution and supervision/monitoring (SFDA and NDRC)  Report to Party Congress in October 2007 China at the Crossroads (cont.)

11-Dec-06www.wpro.who.int/china5 China at the Crossroads (cont.) Consensus emerging recently about the way forward “Treatment” or way forward … – “President Hu promises bigger government role in public health and with a goal for everyone to enjoy a basic health care service” (Xinhua 24 Oct 2006) –Govt to increase financial investment in Health (2% or more of GDP) in line with “ education for all”, spending up to 4% of GDP Need to further this vision … –A clear and holistic vision forward and define clear Government role supported by senior leaders to guide many actors; –Start quickly, but include stepwise targets – no quick fix;

China at the Crossroads (cont.) There is a heated debate about other steps forward What services will be part of essential services? Increased funding but not clear how it will be channeled –NHS – like? –Expanding & re-designing urban and rural health insurance? What should be the exact role of government and market? –How to deal with government and market failures? Provider payment and incentives to be changed – but how? How to improve human resources and capacities in the health system? Need for institutional changes to clarify roles and increase efficiency among many actors  but how?

Health System Reform Objectives Equity – Access Efficiency - Cost containment Quality

The Role for the Government Core role for the government  Ensure universal and equitable access – on the basis of need – to essential healthcare (including essential medicine) that is safe, affordable and of good quality  Ensure financing of essential healthcare at local level – no unfunded mandates – financial transfers to guarantee support delivering health care  Ensure safety network for the vulnerable and the poor for Health  Strengthen regulatory framework safety & quality of health care  Ensure cost control mechanisms in place  Ensure framework for effective involvement of the private sector and the market

9 The Role for the Market Through regulated competition, the private health sector and the market may help achieve: 1) B etter delivery of both essential and non-essential healthcare, possibly via bidding/contracting; 2) M ore effective production, distribution, and sales of high quality medicines (including generics) and goods; 3) Investment in innovation and research & development 4) P rivate health insurance – pooling and financing and purchaser for non-public health services (Dutch reform) Thus to avoid “Government failure” in many areas (e.g. monopoly in service provision and lack of competition) But the market needs certainty – and a strong government setting clear rules will encourage markets to engage (quality, price setting etc.)

10 Towards Universal Access General lessons from OECD: I.Key is providing access to essential services (public health functions & services and essential clinical services) for all: a)NHS like – for poor and West? b)Re-design, expand and integrate current urban, rural health insurance c)Private health insurance d)Develop safety net for vulnerable group II.Move away from cash payments and user fees at service delivery towards pre-paid and pooled contribution III.Minimize cost sharing & reduce co-payment to 20% or less IV.Make health insurance compulsory & inclusive (BMI: family members & migrants)

11 Towards Cost (&Q) Control Put in place cost containment tools and mechanisms  Regulate price and volume of health care & inputs  Caps on health care spending  Develop National Medicines Policy (next slide) Change the method of provider payment:  Towards prepaid and pooled contributions away from user fees  Introduce global budget, capitation and other prospective payment methods, instead of retrospective ones, particularly fee-for-service  Strengthen the role of purchaser of health services (Govt, insurance) Strengthen ambulatory care & introduce gate keeping mechanisms  Using village clinics, urban community health centers, and GP’s  Improve quality of health services at lower level – gain trust

12 Towards Cost (&Q) Control (cont) Develop National Medicines Policy Drugs consists 44% of total health expenditure – in EU this is about 15% up to 25% elsewhere  Ensure strict drug approval and registration requirements to assess quality, safety, efficacy and cost-effectiveness  Accredited producers, distributors, wholesalers;  Optimize price controls allowing for decent profit margins for generics and other essential medicines and innovative drugs attractive for private sector to engage  Support rational use by:  clinical practice guidelines  prescription budgets  feedback on individual doctors  Strengthen mechanisms to combat counterfeit drugs

Improving Quality and …. Improve quality of health services, especially at lower level  Standardize treatment guidelines  Introduce mandatory accreditation  Improve reporting system and make reports public on health care quality  Improve qualifications of staff at lower level  Formalize patients’ rights and introduce patient safety program Introduce health system indicators that will focus on accessibility to quality services instead of availability Involve all stakeholders in the process THANK YOU