Since China started reforming its medical system in 1984, hospital reforms have reached the point of no return.

Consensus on specific measures to adopt has not been reached between government officials, hospital managers and researchers, but they do agree that some kind of treatment is needed to cure the ills of a medical system plagued by inefficiency and bad service.

"We are striving for a balance between the government's responsibilities and the market mechanism," said Wu Mingjiang, director of the department of medical administration under the Ministry of Health. Wu was speaking at the Beijing Hospital Management Forum held at the end of last month. It has become a very influential academic discussion and communication platform on hospital management.

While medical care must be kept public, Wu said a market mechanism could help promote a better distribution of medical resources to keep up with public demand.

The system should be amended to comply with a market environment, he said.

Complaints about medical services in China are two pronged. Higher earners complain there is a lack of choice and what there is, is of poor quality. Those on lower incomes say they cannot afford what there is, and it seems there is a difficulty in reaching low and middle-income families.

"Current hospitals of different grades provide quite similar medical services which, in fact, do not satisfy medical needs at both ends," said Li Ling, a specialist in health economics at the China Center for Economic Research with Peking University.

She said she had heard many foreigners in China and some Chinese returning from abroad were worried most about seeing doctors in China.

One representative of the German Chamber of Commerce who has lived in Beijing for years said he always went to the pharmacy when he was ill, rather than the hospital.

In another case, a hospital architect returning from Germany said his wife said she thought the modern facilities in Beijing were okay, but she still worried about going to hospital.

Li questioned the effectiveness of the national spending on medical care and the hospitals' investment in upgrading their facilities in the past years.

Some of them find it difficult to attract patients, because the rich frown on bad quality of medical services while the poor are often scared away by high medical charges.

At the moment, the cost of treatment in State-owned hospitals is fixed and there are only minor differences in the prices of different grade hospitals.

In some small grassroots hospitals, less than 30 percent of the beds are taken at any one time. "Since there is no big price difference, people all flock to the large hospitals. So government input in the small hospitals is actually a waste of medical resources," said Zhou Zijun, associate professor of Hospital Management at the School of Public Health, Peking University.

In a market economy, a management strategy based on patients' needs should always be the same.

"Medical need is always varied, so a uniform treatment base won't work," said Zhou.

"There should be choice and different types of treatment provided in all hospitals."

Basic medical care should be affordable for everyone.

"Profits made in the hospitals for the good services they provide should make up for profit loss in basic treatment. In this way hospitals can achieve a balance while satisfying the needs of different groups of people," said Li.

Possibilities for ownership change

In the current system, more than 96 percent of all hospitals above county level are State-owed. Some hospital management researchers contend that this is a huge burden the government's budget.

"Medical reforms must make clear which part of the services are the government's responsibility," said Zhou.

This, in his opinion, is services for the low-income population and for controlling and treating infectious diseases. He also mentioned mental illness.

Some basic treatment should be added to the government's workload if there was enough in the budget, he said.

Many people in China, such as farmers and urban poor, cannot afford medical treatment. "For these people, public hospitals should guarantee their basic health needs are met," said Zhou.

Other medical needs could be provided by non-government hospitals that could be set up with private money, he said.

Zhou believes that some State-owned hospitals should be changed and either offer non-government facilities or choose to become non-profit and profit-making hospitals.

"There should be no problems with the feasibility of profit-making hospitals. A lot of private companies are eyeing the medical market and viewing it as a huge potential for profit," said Zhou.

Non-profit hospitals are more of a grey area, but as government funding is only 5 percent of a hospital's fund, this should not be too much of a transition.

"It is a question of who manages the hospital and owns the hospital's assets after the government quits. There is still no law on the property ownership of non-profit organizations," said Zhou.

He suggested setting up a hospital management committee of government officials, hospital staff and people in the community to become the decision-makers.

"When the relevant laws have been perfected, the government can gradually pull out of the management," said Zhou.

If hospitals were pulled out from government control, they could be better supervised by the government, he said.

While hospital management researchers like Zhou see ownership change a major target of medical reform, Li had different views.

"The hospital ownership issue should not be the most pressing one in the present medical reforms," she said. "Looking at other countries, high medical expenses don't get cheaper just by transforming ownership," she said.

Li said State-owed hospitals could best provide effective leadership in quality reforms and hospital system management in China.

(China Daily September 15, 2004)