China Medical News

To further the medical reform in China, the State Council released a guideline saying that all public hospitals will have to stop marking up the price of the drugs they sell. This is a controversial practice that has been adopted by such hospitals for years, to make up for a government funding deficiency, according to the guideline. Public hospitals generally sell drugs for prices that are up to 15% higher than what they pay for them. Some experts say this gives them incentives to buy more expensive drugs, and causes doctors to prescribe more expensive drugs.

With an expected decline in drug sales, the local government will allow public hospitals to adjust service fees. Checkup and test fees will be reduced, while services that require professional skills, such as diagnosis and surgery, will increase, the guideline said. However, the total cost to individuals will not increase, it added.

In contrast to soaring drug prices, some service fees collected by public hospitals are very low. For example, the price of a diagnosis offered by a doctor with a senior title is no more than 14 yuan ($2.10) in many public hospitals in Beijing, a rate that has not changed for many years.

The local government will make detailed policies to compensate public hospitals for the loss of drug sales revenue, and local governments are encouraged to increase remuneration for medical staff as an incentive, said the chief for medical reform at the National Health and Family Planning Commission.

"A major difficulty in the medical reform is to break up the strong interest groups that have formed in the medical sector over a long period, such as in drug purchases and distribution," said a medical reform researcher at Renmin University of China. (Source: China Daily)