Bulk procurement brings down medical costs

When orthopedic surgeon Yang Kaixiang started practicing at a hospital in Wuhan, Hubei province, in 2014, he met a patient who had to leave her severe osteoporosis untreated due to prohibitive medical costs.

"She was a migrant worker taking up gig jobs in Guangzhou, Guangdong province. She estimated that she had to work 10 years while living frugally to save enough money for a hip replacement surgery," said Yang, from the Wuhan Hospital of Universal Love.

In an interview in September, a decade later, Yang recalled how he could not help imagining the pain the woman had to endure.

In the past, despite the obvious risks of persistent pain and potential disabilities, it was not uncommon for patients to delay joint replacement surgeries because of hefty medical bills.

The procedure that replaces degenerated joints and hips with artificial ones could cost as much as 50,000 yuan ($6,800).

Today, thanks to a bulk procurement program led by the National Healthcare Security Administration, the price of such surgeries has significantly dropped.

The centralized procurement program, initiated in 2018, has managed to cut the prices of drugs and medical equipment through price negotiations with manufacturers who bid for large-volume contracts with public hospitals.

In September 2021, artificial joints were included in the national bulk buy drive as a swelling aging population had raised the incidence of osteoarthritis, rheumatoid arthritis and other age-related conditions, and propelled the demand for replacement surgeries.

The bulk buy campaign has cut the average price of artificial knees from 32,000 yuan to 5,000 yuan, and that of artificial hips from 35,000 yuan to 7,000 yuan.

Since prices were slashed in April 2022, more than 1.1 million products have been used, saving patients nearly 33 billion yuan, according to officials.

Zhang Zhongliang, a 44-year-old resident in Wuhan, checked out of hospital in early September, three months after having his right hip replaced.

"I was able to get out of bed and practice walking the day after surgery and resume normal activities about a month later," he said. "I was thrilled by the result and decided to get a second hip replacement as soon as possible."

Zhang was also surprised by the medical bill, which cost him about 15,000 yuan out-of-pocket per hospital stay. "My friend who underwent a similar surgery a couple of years ago said that he paid about 100,000 yuan more than I did," he said.