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Prof. Li Ling: Hospitals Should Return to Public-Good Path

Nov 03-2023   



China’s healthcare reforms in recent years have been centering on ‘tactics’ but are yet to touch upon ‘the way’, namely getting hospitals back to the path of working for public good, said Prof. Li Ling of the NSD in a recent interview with Phoenix TV.

 

Prof. Li started out doing macroeconomics research in the US, but was soon drawn to healthcare when noticing that its budget was twice that of US military. What intrigued her more was that it seemingly needed market-based incentive mechanisms, but in fact it was where market malfunction was at its worst. Money alone, she said, can’t fix health problems. Today, the US, at per capita health care expenses of USD12,750, has a life expectancy of 76, while China’s is 78.2.

 

Prof. Li said that China’s healthcare comprises two major parts: workers’ healthcare and urban-rural residents’ healthcare. The former has the participation of 360 million people, and the latter covers one billion. Through coordinated funds, the healthcare system pools financial means to support those in need. She acknowledged that reforms that have been rolled out since the establishment of the National Healthcare Security Administration are for the purpose of enabling the healthcare system to function more efficiently. In certain area, some patients initially complained about changes of rules. Prof. Li said that such complaints were not directed at one particular policy but rather at the overall healthcare reforms. Eventually they had better understandings of new policies and benefited from rising share of outpatient reimbursements.

 

Prof. Li believed that hospitals should return to the public-good path, but this remains a tall task since hospitals only receive a paltry amount of government funding and still has to earn profits to maintain operations and meet government-decreed criteria. For example, to build a telemedicine center, a hospital will have to raise 90% of the funds by itself. Yet the more such profit-driven hospitals there are, the more the healthcare system is sapped of funds, said Prof. Li.

 

From 1978 to present day, China’s total healthcare expenses have ballooned by 800 times, from 10 billion yuan to 8 trillion yuan, she noted. The current system, she said, is similar to the US one, a blackhole that sucks in money.

 

The successful healthcare reforms in Sanming City, in southeastern Fujian Province, set a good example but will be hard to emulate in other regions, largely due to the myriad obstacles related to vested interests, said Prof. Li. Still, she highly commended the Sanming ways, including raising doctors’ incomes and linking them with digitalized performance review, and creating ‘shared health community’ by buddling hospitals and clinics. The reforms were mainly dominated by the government but the market was at play to pull in resources. Eventually, an incentive mechanism for the medical staff was erected.

 

Prof. Li Ling: Hospitals Should Return to Public-Good Path

Nov 03-2023   



China’s healthcare reforms in recent years have been centering on ‘tactics’ but are yet to touch upon ‘the way’, namely getting hospitals back to the path of working for public good, said Prof. Li Ling of the NSD in a recent interview with Phoenix TV.

 

Prof. Li started out doing macroeconomics research in the US, but was soon drawn to healthcare when noticing that its budget was twice that of US military. What intrigued her more was that it seemingly needed market-based incentive mechanisms, but in fact it was where market malfunction was at its worst. Money alone, she said, can’t fix health problems. Today, the US, at per capita health care expenses of USD12,750, has a life expectancy of 76, while China’s is 78.2.

 

Prof. Li said that China’s healthcare comprises two major parts: workers’ healthcare and urban-rural residents’ healthcare. The former has the participation of 360 million people, and the latter covers one billion. Through coordinated funds, the healthcare system pools financial means to support those in need. She acknowledged that reforms that have been rolled out since the establishment of the National Healthcare Security Administration are for the purpose of enabling the healthcare system to function more efficiently. In certain area, some patients initially complained about changes of rules. Prof. Li said that such complaints were not directed at one particular policy but rather at the overall healthcare reforms. Eventually they had better understandings of new policies and benefited from rising share of outpatient reimbursements.

 

Prof. Li believed that hospitals should return to the public-good path, but this remains a tall task since hospitals only receive a paltry amount of government funding and still has to earn profits to maintain operations and meet government-decreed criteria. For example, to build a telemedicine center, a hospital will have to raise 90% of the funds by itself. Yet the more such profit-driven hospitals there are, the more the healthcare system is sapped of funds, said Prof. Li.

 

From 1978 to present day, China’s total healthcare expenses have ballooned by 800 times, from 10 billion yuan to 8 trillion yuan, she noted. The current system, she said, is similar to the US one, a blackhole that sucks in money.

 

The successful healthcare reforms in Sanming City, in southeastern Fujian Province, set a good example but will be hard to emulate in other regions, largely due to the myriad obstacles related to vested interests, said Prof. Li. Still, she highly commended the Sanming ways, including raising doctors’ incomes and linking them with digitalized performance review, and creating ‘shared health community’ by buddling hospitals and clinics. The reforms were mainly dominated by the government but the market was at play to pull in resources. Eventually, an incentive mechanism for the medical staff was erected.