Bulk procurement brings down medical costs

Data provided by the hospital shows that the number of spinal and joint surgeries carried out at the hospital from January to July this year had increased by 74 percent compared to the same period in 2019 before the COVID-19 pandemic.

At the same time, the total costs of artificial joints and other medical consumables such as titanium plates and screws dropped by 50 percent, and expenditures for medical consumables per surgery fell by 71 percent.

Cheng Wenjun, head of the hospital's orthopedic surgical center, said that in the past, he would identify six to seven patients in need of replacement each day during his outpatient consultations, but only one to two of them would end up receiving one because a large number of patients simply could not afford it.

"But nowadays, patients who reject surgeries mostly do so out of fear of the procedure itself and few are intimated by medical expenses," he said. "We have also seen the word-of-mouth effect as the elderly who are satisfied with surgery outcomes would recommend peers in their neighborhoods to seek help from us."

Cheng said the price reduction has expanded access to high-end products.

"At our hospital, 95 out of 100 hip replacement surgeries now use ceramic on ceramic bearings — the most advanced ones that promise low friction and low wear," he said.

"The price difference between advanced and regular ones at present is around a few hundred yuan, but before the bulk buy, the price gap was tens of thousands of yuan," Cheng added.

"Gradually, outdated models will be phased out."

The bulk buy program in 2021 saw 44 enterprises win bids, including 30 domestic manufacturers and 14 foreign companies.

Qin Jun, a surgeon at the Zhongnan Hospital of Wuhan University's department of orthopedic surgery, said that some patients have held grievances against using less expensive products and worried about their quality.

"It is important for us surgeons to communicate effectively with them. I would tell them that just like that homegrown electronics and domestic electric car brands have caught up on foreign rivals, the quality of domestic medical equipment has also improved to match or even exceed that of overseas products," he said.

Over time, he said patients have become more welcoming of procurement products and applauded the price cut.

Qin added that nearly all products in the procurement catalog are mainstream items from familiar brands.

"There are some cases, such as patients who experience lesions and thus require revision procedures as well as patients in need of customized screws or coating, where we need to look for products off the catalog, but such cases are rare," he said.

While patients' financial burden has certainly been relieved thanks to the program, concerns have lingered over whether the price slashing could hurt manufacturers' profits and dampen their motivations to enhance innovation.

Bao Shijun, general manager of Yijiabao, a biomedical company founded in Wuhan in 2014, said that the centralized procurement program has made it easier for the company to introduce its products into public hospitals.

"As an emerging enterprise in the industry, it would have been difficult for us to compete for contracts at major medical institutions. But through participating in the bulk buy, we have easily struck partnerships with hospitals and can focus on improving our products and services," he said.