Research on the implementation of the essential drug system in China rural health facilities


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Wang YunPing of the China National Health Development Research Center gives a presentation on behalf of her boss, Director Zhang Zhenzhong about reforming China's essential drug system.

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Research on the implementation of the essential drug system in China rural health facilities

  1. 1. Research on The Implementation of Essential Drug Systemin China Rural Health Facilities<br />Zhang Zhenzhong, Wang Yunping<br />China National Health Development Research Center<br />
  2. 2. Outlines<br />Background<br />Progress of EDS Implementation<br />Some preliminary findings and discussions<br />Summary <br />
  3. 3. Background <br />Why the drug price is so high?<br />Before the reform, the mark-up taches in China <br />50% 30%-50% 12%-15% 7%-15%<br />Manufacturer Sale agent Distribution enterpriseHospital Patients <br />。。。 。。。<br />The more agents and distributors involved, the more mark-up taches, and thus the higher prices of drugs and heavier economic burden on patients.<br />
  4. 4. Background <br />Surviving rational for rural grass-root health facilities: compensate the cost of medical health services through the profit via selling drugs<br /><ul><li>In 2009 for public township health centers:
  5. 5. Revenue from selling drug income in its total business income: 55.03%(western areas ≥70%)
  6. 6. Fiscal input in its total income: 18.98%</li></li></ul><li>Background <br />Launch of National EDS: 2009<br />Objectives of National EDS: ensure the utilization of ED, alleviate the economic burden of drugs for the population<br />Main tasks and features:<br />NED list: 307, allow expansion in province, update every 3 years<br />Regulate the production and distribution, and tender for bidding at provincial level<br />Set national retail sales guiding price for ED<br />Equip and use EDs in public grass-root health facilities, and 0 mark-up for EDs<br />Facilitate the priority selection and rational use of EDs<br />Provide higher reimbursement rate for EDs in medical insurance schemes<br />Strengthen the supervision on EDs safety and quality<br />Improve the performance evaluation system on EDs<br />
  7. 7. Progress of EDS Implementation<br />From 2010 – Apr. 2011: has covered 86%public grass-root health facilities<br />Data source: WHO Beijing office, Tongji Medical University , CNHDRC, Evaluation on Essential Drug System implementation Progress.<br />
  8. 8. Financing the grass-root health facilities for the gaps after implementing the EDS <br />Financing Methods <br /><ul><li>“Replacing compensation by rewards” policy: combine the volume and quality of the basic + major public health services accomplished, as well as the performance of general reform on personal management, performance related payment, patient satisfaction and etc. with the fiscal subsidies
  9. 9. Differential fiscal subsidies-direct subsidies: compensate the gap based on the average total business income and cost in the previous 3 years
  10. 10. Bill on medical insurance: medical insurance V.S. fiscal input is 7:3 or 6:4 for the 15% mark-up gap </li></li></ul><li>Change of the price after EDS reform<br />Nationwide<br />average price of EDs: decline 30% + , due to 0 mark-up policy.<br />But some EDs in some areas:<br />Price after bidding is much higher<br />
  11. 11. Is this proposition true?<br />Even though in most areas, the EDs price is declining, if <br /> Declining EDs price = Declining economic burden of health exp.?<br />Declining EDs price, but might be increasing economic burden of health exp.<br />Reduce the EDs price<br />
  12. 12. Some preliminary findings<br />Although it is too early to make any conclusion, however, some phenomenon should be paid attentions to…<br />
  13. 13. Change of the volume of health services utilization at rural grass-root health facilities<br />Table 1Change of the volume of health services utilizationfrom 2010-2011<br />Data source: Health Statistics Year Book 2010, MOH, China<br />
  14. 14. Change of the distribution of NCMS reimbursement fund at rural grass-root health facilities<br />In 2010: reimbursement for inpatients in upper hospitals outside the county and county hospitals has increased 16.69%、14.8%; in THC has declined 2.59% than 2009.<br />Table 2 Distribution of NCMS reimbursement fund for inpatients <br />Data source: Research Center on NCMS of MOH, China<br />
  15. 15. Why these Unexpected Outcomes Happen?<br />Politicaleconomical<br />socialcultural<br />Upper hospitals<br />Gov. <br />Further tracking & analysis<br />Pharm. enterprise<br />Adaptive agents<br />supplier<br />Consumer<br />Drug store<br />Others…<br />Drug retailer<br />
  16. 16. Opportunities in the predicament for the rural grass-root health facilities<br />Hold back the arms race on medical equipment and constructions<br />Reallocate and integrate the health resources in rural areas<br />Transition of the functions of rural health facilities: balance the public health service and medical services<br />Unprecedented policy attentions and fiscal input to village doctors<br />Facilitate the comprehensive reform on rural grass-root health facilities, especially the performance management and quality management. <br />
  17. 17. Summary <br />When introducing a new system will break down the original interest pattern, collide with and pose pressure to the old environment.<br />To stimulate the agent and environment in the old system more quickly and effectively, the research from complex adaptive system perspective is needed, to analyze the adaptive capacities and behaviors of the agents and the interactions between new and old system components.<br />A Chinese old saying : “Break to Found, fail to succeed”.<br />
  18. 18. Thank you for listening!<br />