Private hospitals get more flexibility in market

Chinese authorities unveiled a package of healthcare measures on Wednesday that consist of relaxing price controls covering non-public hospital services and encouraging the private sector to build health institutions.

The measures were jointly announced in a circular by the National Development and Reform Commission, the National Health and Family Planning Commission and the Ministry of Human Resources and Social Security.

The measures are aimed at giving private organizations more leeway to charge what they want for medical services to encourage competition.

The authorities want private capital to enter the healthcare sector as soon as possible to increase the supply of medical services.

All provincial governments have to publicize a directory, listing all public hospitals within their regions before the end of June, the circular said.

It stated that all non-public hospitals should be included in the country's public medical insurance plans, and government departments should implement the same reimbursement policy for both public and private hospitals.

China's public medical insurance plans include health insurance for urban employees that is jointly paid by governments, employers and individuals; there is also health insurance for non-working urban dwellers and rural cooperative health insurance for rural residents, which are co-paid by governments and individuals.

The circular recommended all non-public hospitals set up a transparent pricing system, and costs of services should be reasonable.

Governmental departments should strengthen supervision on pricing behaviors among non-public and public health institutions, and safeguard patients' rights, it said.

The measures come two weeks after an executive meeting of the State Council said the country would work to establish a universal medical insurance system, speed up reform in public hospitals, and relax market entry requirements for the private sector to build health institutions.

Non-public and public hospitals will be treated equally in terms of access to medical insurance programs and other qualifications, said a statement issued after the meeting.

The number of public hospitals will be controlled and medical resources will be optimized, according to the statement.

China had 10,877 private hospitals by the end of October, up from 5,400 by the end of 2008.

Public hospitals, which provide 90 percent of China's medical services, totaled 13,440 by the end of October. Public hospitals in China are financed by the State and regulated by health authorities.

Private hospitals often offer patients more individual attention and better service, though they are more expensive. They can help relieve pressure on an overburdened government system.