Hebei province has announced a new round of reforms in its hospitals to cut individual treatment costs significantly along with general medical expenses, with the deputy governor, Xu Ning, explaining that local government will increase public hospital allocations for service, this year.

The hospitals will have to change their existing medicine purchase system and halt their drug royalties. In addition, they will need a new more competitive employment system, which uses staff initiative in providing better service, with more hospitals above the county level being required to follow the reforms to make them account for about 70 percent of the province’s public hospitals. The 11 public hospitals that already have implemented changes in the medical supply system, since July 1, 2012, will need to further their reforms by the end of May.

New hospitals in the cities of Tangshan and Handan will come up with a pilot plan for local medical reforms by mid-May, while other new hospitals will be expected to cancel drug royalties, by July 1, 2013.

Statistics from those 11 hospitals show individual outpatient costs down 3.3 percent on average, with subsidies for insured individuals up 4.4 percent, in 2013. In addition, staff members are getting higher salaries, rising 5.3 percent under a new performance payment system.