China Plans To Cut the Reliance of Drugs in Hospitals for Income Generation

Published Date : May 26, 2015

On Friday, the Chinese officials informed that a well-planned reform of health sector in China has been focusing at rooting out the corruption and also in reducing the dependency by hospitals on the drug prescriptions for generating income.

The officials of Family Planning and National Health Commission stated that the reforms will be creating some new hospital revenue streams and also improve the hospital profits by providing the patients several service levels along with matching tiered costing.

The said reforms, which are aiming to solve some of the largest issues in the fast-growing but highly under-funded medical system of China, will boost the hospital profits by creating a system for the medical insurance in order to expand the coverage of care.

The vice minister of the commission,  Sun Zhigang, informed in a news briefing that the prime objective is to divide the income of hospitals and doctor from the sales of pharmaceutical, which have been linked too closely.

Sun Zhigang further added that they need to eradicate the dependency on drug sales, adding that the government of China will be offering more assistance to the hospitals in order to separate the doctor’s incomes from the sales of pharmaceutical. A new payment process for doctors will be created for salaries on the basis of their skills and performance, rather than on the number of prescriptions they have sold.

Furthermore, the officials handed over some details on the timeline they have planned for their reform goals; however they said that they would need all county level hospitals to divide their revenue generated from the drug sales in this year. According to some industry experts, the competition to get drugs into hospitals has also resulted in kickbacks and some other kinds of corruption