Infrastructure for primary-care: Rapidly emerging

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By BarneyBaker

China’s health-care system has been plagued by a chronic imbalance of resources for a long time. The biggest class-3 hospitals (around 1,350 in total) in large cities have the best-quality equipment and physicians, as well as the largest patient flows. Compared to these, the smaller, less developed, poorly-funded, and often disconnected from larger hospitals are the grassroots facilities like county and urban hospitals and community-health centers. This gap undermines the strategic goal to provide broad and effective care. Patients will choose to go to the most prestigious hospitals in their largest cities regardless of severity. This causes overcrowding in big hospitals and underutilization of grassroots facilities.

The main goal of health insurance for foreigners in China reform, therefore, is to create a primary-care infrastructure. This includes the development community-health centres and community-health stations. It also includes a three-tier rural network that includes county hospitals, township medical centers, and village clinics. The government also wants to improve the quality and service standards of primary-care institutions, mainly by the education and training general practitioners. It also intends to establish a referral system between primary care facilities and hospitals.

The significant development of grassroots infrastructure has been a key part of reform efforts. For example, the number of community-health centers and stations in urban areas increased by 20% between 2010 and 2011. The development of wealthy regions is even more rapid. For example, Zhejiang has 168 and Beijing has 119 community-health centres and community-health stations for every million urban residents respectively, while Yunnan only has 22. As underdeveloped regions invest, this gap will likely shrink.

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The government is also working to improve the quality and availability of primary-care physicians. For example, the Health Care Reform Office of the central government recently announced that urban community-health doctors are now being trained on the job and that 5,000 physicians will be trained to support the township-health centres in the central-western region. This will take time and the large gap between quality of small hospitals and those at larger facilities will continue.

The government is making every effort to improve primary-care institutions, and to give patients more incentive to use them. The success of the initiative will depend on the quality of doctors and other medical personnel, access to effective drugs patients can trust and the creation integrated networks of primary- and tertiary institutions that manage patient flows efficiently. These developments will be difficult to achieve.

The increasing complexity and uncertainty faced by pharma companies stems from the increase in reimbursement categories and government pressure to lower prices and reduce the burden on patients. These companies have large product portfolios that include many drugs on the National Reimbursement Drug List. Some also have high exposure to the Essential Drug List. Many analysts expect that new drugs will make a significant contribution to the economy by 2020. Twelve out of 15 top multinational pharma companies in China derive more that half their sales from China from drugs on current National Reimbursement Drug List. Six of the top fifteen pharma companies in China are dependent on sales of essential drug lists molecules for more than 10% of their China sales. The pricing trends for these two types of drugs (and any new ones) will be different. The price premiums for products made by multinational companies will continue to be a problem for medicines on the National Reimbursement Drug List. The Essential Drug List will be expanded in scope. The launch price of new drugs could be affected by reference pricing.

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