A pilot program in which the sick are reimbursed the majority of their medical costs has been extended in Shaanxi's Shenmu County.

Under the program launched in March, the local government pays for medical bills above 200 yuan (US$29) at township clinics, and 400 yuan in county-level hospitals.

It also pays for medical bills above 3,000 yuan at hospitals based outside the county. No more than 300,000 yuan can be repaid for medical bills annually per person.

Shenmu has a population of 380,000 but only those with a residential permit and who are covered by the county's unified medical insurance are eligible for the benefits.

The pilot program would continue as part of a 15-month investigation before its implementation.

Lei Jiangsheng, publicity department chief of Shenmu County Party committee, said that there had been difficulties with the pilot program but that it would continue anyway.

"What is certain is that we will continue the policy to benefit residents," he said, but refused to provide details on when the program would end.

Local residents welcomed the program and the number of hospital inpatients was 30 percent higher during March and April than the same period last year. It was lower for May.

According to the county health bureau, 2,070 inpatients received 9.6 million yuan in medical reimbursements in March and 12.7 million yuan in April.

He Fengying, an unemployed intestinal cancer patient who is receiving treatment at Shenmu county hospital, said the policy was saving her life.

She said her family, which has an annual income of 20,000 yuan, had almost been bankrupted by more than 100,000 in medical bills last year.

However, she has spent just 1,000 yuan on medical bills at the hospital in the past 10 days.

"We are so lucky to be born in Shenmu, which is the only place in the country that has such a good policy," she told a newspaper report.

Zhao Jie, a medical reform expert with Party School of Central Committee of CPC, said: "As a quest guided by the present nationwide medical reform that urges medical service supplier and acquirer to increase input, Shenmu's program is very positive and significant."

However, a netizen named Zhou Yacui said some people might take advantage of the policy and go to hospitals for the treatment of minor ailments or for chronic diseases.

Another netizen, named Wang Dama, said Shenmu was a rich county with abundant coal resources but it could not afford to continue funding the program if many patients placed demands on scarce medical resources.

Local officials said the county had enough money to continue funding the program.

"The government needs to spend about 100 million yuan on the program every year, but our annual revenue is more than 1.7 billion yuan," Guo Baocheng, secretary of the county Party committee told the Workers Daily.

Located in north Shaanxi Province, Shenmu County is ranked No 1 against other provincial counties in terms of economic performance.

It has 50 billion tons of proven coal reserves and has produced more coal than any other Chinese county in the last year.

He said the money spent on the program was much less than expected, and this gave the government more confidence to continue.

Originally, it had planned to spend 26-30 million yuan during the first two months of the program, but it had only spent 22.3 million yuan.

Meanwhile, experts said local government should pay more attention to improving access to operations.

"In my opinion, the program is basically a high-level medical insurance system," Gu Xin, an expert with the school of government in Peking University, told Beijing News.

He said that in that respect it was an abuse of resources.

"Shenmu authorities should reform the program into an insurance system that could share the burden between various parties," Zheng Gongcheng, a professor of Renmin University specializing in social security, told People.com.cn.

They also should strengthen social supervision and ensure openness in the system, he said.

Lei told China Daily that the government encouraged people with minor ailments and chronic disease to seek outpatient service.

(China Daily May 27, 2009)