Suqian Medical Reform

Sell-out medical reform in Suqian, Jiangsu: Hospital income increases and medical expenses rise

(1) "Expensive medical treatment" has not been solved - another distortion of medical expenses after the introduction of market mechanisms

1． Digital paradox: Is medical care more expensive or cheaper?

2. Theoretical analysis: To give full play to the market mechanism, we cannot avoid the own laws of the medical and health field.

3. Realistic situation - in line with theoretical inference, forming another distortion of medical expenses.

(1) The phenomenon of blind development of medical equipment towards high-end is very serious.

Suqian's medical reform has clearly seen the trend of "medical equipment competition". Each hospital is striving to expand its scale and install high-precision equipment. Slightly larger hospitals are equipped with color ultrasound, CT, MRI, etc., and even some first-level hospitals have purchased CT. Medical equipment such as electronic gastroscopy and fully automatic biochemistry instruments are already common equipment in first-level hospitals.

When you walk into various hospitals in Suqian, you will see illustrated introductions of various medical equipment and examination items owned by the hospital as soon as you enter the door. Shuyang County Pingan Hospital is a first-level hospital. The clinic and ward facilities are very simple, and the toilets are simple sheds built against the wall. However, in the outpatient hall of the hospital, there are introduction boards for CT, electronic gastroscopy and other equipment, and posters are posted. A 34-page price list for the hospital’s treatment programs.

Shuyang County People’s Hospital and Renren Hospital compete with each other in terms of projects, equipment, hardware, and talent recruitment. Renren Hospital has built a 10-story new medical building with a total investment of more than 30 million yuan, forcing Shuyang County Traditional Chinese Medicine Hospital to increase investment by 10 million yuan. The county hospital of traditional Chinese medicine is preparing to build a 19-story comprehensive building and plans to introduce several High-frequency nuclear magnetic resonance and other advanced equipment.

Currently, many health facilities and equipment in our country are ahead of the level of economic development, and the abuse of high and new technologies is an important reason for the rise in medical expenses. What poor areas like Suqian lack most is not high-tech equipment, but a large number of low-cost, effective services.

(2) Doctors induce patients to undergo more examinations and surgeries.

Compared with other regions, the problem of large prescriptions issued by hospitals in Suqian has been alleviated to a certain extent. According to some deans, the profits of outpatient clinics are now relatively thin, and the income mainly depends on examinations and operations. However, many abnormal phenomena have appeared, forming another distortion of medical expenses:

First, doctors require more patients to undergo various medical examinations. When we go to some hospitals to see a headache or leg pain, almost all hospitals require a CT scan; when we go to some hospitals to see a gastric disease, most doctors say we need a gastroscopy; many of the patients we meet during our visits also have gastroscopy and other examinations. . A certain hospital has the best reputation among local people. Even for such a hospital, the director of the hospital said that there are more than 500 outpatients every day, nearly 100 CT examinations, and 15 gastroscopy examinations (out of 500 outpatients, the Department of Gastroenterology There are not many patients), which is much higher than the proportion in hospitals in cities such as Beijing.

Second, patients should undergo surgery for diseases that do not require surgery. Some hospitals have caesarean section rates of 90%.

Third, diseases that are not serious are deliberately made serious. A rural woman in her 50s suffered a broken wrist. The doctor strongly recommended that the patient get an artificial joint. He said that the 52-year-old woman had reached menopause, her bones had stopped growing, and her fracture could no longer be recovered, so she had to get an artificial joint. This is what we saw with our own eyes when we visited a hospital in Suqian (one of the best hospitals).

What is even more worrying is that most of the residents in Suqian area are rural residents. They have little medical knowledge and it is easier for doctors to induce these patients.

(3) The explanation from the local health bureau verified the survey situation and analysis.

Suqian Health Bureau officials believe that there are three reasons for the increase in hospital income: First, as medical services increase, the hospital's income will also increase. 2. Patient structure adjustment. After the medical reform, some serious diseases can be cured and operations can be performed. However, the return rate of treating serious diseases is higher than that of treating minor diseases, and the return rate of surgery is higher than that of outpatient service. 3. The total number of patients increases. Some exodus patients were lured back. These have verified the results of our research and analysis. Now hospitals are indeed increasing revenue through dilation examinations, surgeries, etc.

As for the authenticity of the data, Suqian Health Bureau officials believe that these data are reported by each hospital. If there is any error, the income data can only be reported low, not high, otherwise the hospital will have to pay For more taxes, hospitals have no incentive to file higher taxes.

By the same logic, we have reason to believe that under such a data collection system, hospitals have an incentive to underreport average outpatient expenses and average hospitalization expenses, because these indicators are key indicators for the government to evaluate hospitals.

4. Hospital “red envelopes” and “kickbacks” manifest themselves in other ways.

The internal management mechanism of private hospitals is flexible, and shareholders take profit as their main goal. Of course, they will motivate doctors by increasing their remuneration and restrict the behavior of individual doctors from receiving red envelopes. But the key point is that the profit motive of the hospital as a whole has not changed, but has been strengthened - a hospital based on a joint-stock system cannot survive if it does not aim at maximizing profits.

So, although the problem of doctors personally receiving red envelopes and receiving kickbacks has been eliminated, this part of the benefits has not returned to the patients, but has been concentrated in the hands of the hospital shareholders. It’s just that the red envelopes have been transferred from underground to above ground, from doctors receiving red envelopes to shareholders receiving dividends.

The way to solve the "red envelope problem" is to remove the profit motive from hospitals. As long as this doesn't change, red envelopes and kickbacks will manifest themselves in other ways.

We found similar phenomena extensively during our inspections. According to interviews with doctors, whether it is the original public hospital (such as the People's Hospital) or the newly built private hospital (such as Mercy Hospital), doctors prescribe drugs and issue commissions for examinations. This is consistent with our prediction.

A department director at a certain hospital told us that doctors receive commissions for prescribing medicines, surgeries, and examinations, including prescribing CT and B-ultrasound examination orders. The turnover of a certain health center has a quota. Two doctors with prescription rights must each meet the quota of 5,000 yuan. If they fail to meet the quota, they will not receive even the most basic salary. As the director of a hospital said, he directly controls drug procurement and has no control over the purchase price. This mechanism determines that doctors are fully motivated and able to lower the price of drugs so that hospitals can gain greater profits, but they may not have the motivation to lower prices for patients.

5. The feelings of ordinary people - "In the hospital, money is like paper."

According to our interviews with local residents, they do not have a strong feeling about “difficulty in getting medical treatment”, but the overall feeling is that it is still expensive. In a hospital, we asked an elderly patient in rural areas, and the old man's answer was: "In the hospital, money is like paper!"

(2) Lack of regional health planning, and the tertiary medical network is broken

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The original intention of my country’s original three-level medical service network covering both urban and rural areas was to effectively allocate medical resources through the referral system and prevent patients from tending to become sicker.

While Suqian encouraged hospital competition and introduced social capital to run hospitals, it violated the particularity of medical and health care, did not carry out any regional health planning, and completely broke the original three-tier network and referral system. The oversupply of medical institutions in Suqian City will inevitably induce excessive demand and increase the medical burden on the people; moreover, hospitals of all sizes compete at the same level without dividing their functions, leading to waste and inefficiency of medical resources.

In the motive of profit, hospitals at all levels are competing to purchase equipment and perform major surgeries as long as they meet the conditions. At the same time, patients can be seen in any hospital no matter what their disease is. However, hospitals are "always inseparable" and there is no incentive for referrals at all. The result is that the best medical resources do not serve the people who need them most, resulting in inefficiency in the allocation of medical resources.

The local People's Hospital, which has the best quality and strongest technical force, still sees a large number of general outpatient services, while many township health centers have also begun to purchase CT and other equipment to perform major surgeries. For example, Xinhe Township Hospital, in addition to operations such as gastrectomy and appendicitis, also offers difficult projects such as spleen repair, kidney stone surgery, and myocardial infarction rescue.

On the other hand, hospitals at all levels are trying to win over patients at all costs. Hospital advertisements are overwhelming, and some hospitals compete for patients through kickbacks and other means. Many community doctors have a "membership card" issued by Shuyang County People's Hospital. If a community doctor introduces an outpatient to Shuyang County People's Hospital, they can get a 100 yuan rebate; the rebate for the patient's hospitalization is 10% of the surgical fee. Some doctors told us that hospitals rely on doctors from township and village clinics to recommend patients and then give them kickbacks. This kind of kickback has even become an important source of income for doctors in village clinics, artificially increasing medical costs and increasing the burden on patients.

Another manifestation of the lack of regional planning is that the pattern of traditional Chinese and Western medicine has been broken.

Since traditional Chinese medicine does not have many examinations and surgeries, and the price of traditional Chinese medicine is relatively low, local traditional Chinese medicine, which relies entirely on the market to survive, has further shrunk.

(3) An unexpected blow to rural medical care: the weakening of primary medical care

1. Rural doctors move into cities and village doctors move into rural areas, weakening the strength of rural primary medical teams.

The demand for medical personnel in the rapidly growing medical market has surged in the short term, which has led to the weakening of grassroots technical strength; at the same time, it has caused problems in the medical quality of some emerging hospitals.

The number of hospitals is increasing rapidly, and the market demand for medical personnel is also increasing. However, it is difficult for Suqian to attract many foreign medical personnel in the short term. The flow direction of doctors now is that "good doctors from rural areas go to cities, and good doctors from state-owned hospitals go out to open hospitals in partnership." Most of the medical personnel in the new hospitals come from township health centers, and some are even unlicensed doctors. And township medical institutions began to absorb some of the original village doctors.

On the one hand, this weakens the quality of basic medical services in rural areas or communities; on the other hand, if supervision is insufficient, the medical quality of some emerging hospitals cannot be guaranteed. According to the investigation, many private hospitals recruit patients as "foreign expert clinics", but they do not live up to their reputation. This is not an isolated phenomenon, but a common phenomenon among emerging hospitals (dozens of them) in urban areas.

2. The medical level of township and village health centers (offices) has declined.

After the reform, township and village health centers were bought by individuals. Since you can buy a hospital as long as you have money, many owners of hospitals at this level are rich people who don't understand medical care at all. In addition, the market-oriented medical environment has relaxed restrictions on the flow of medical personnel, causing many doctors with good skills to disdain working in their original hospitals and looking for jobs in emerging hospitals in urban areas. As a result, the medical level of rural hospitals has declined until they can no longer Provide general medical services.

In one case, a boss who was engaged in slaughtering bought out a hospital and then managed the medical staff harshly. As a result, all the medical staff resigned. Rural hospitals that have been bought out by doctors themselves have developed relatively well, but these hospitals only account for a small proportion. There is a situation where rural patients go directly to urban hospitals for treatment after getting medical treatment at village clinics.

(4) Hospitals are not very enthusiastic about training doctors, and the development of high-level medical teams is not sustainable

The stability of medical personnel has declined, which makes hospitals lack the motivation to cultivate medical technical talents. The sustainability of the development of high-level medical teams faces challenges.

The number of medical institutions continues to increase, and doctors can change jobs at any time. This makes various hospitals prefer to "rob people" rather than "educate people" and are unwilling to train their own technical personnel to prevent them from leaving immediately after training. There is a shortage of medical and health talents, and the quality of medical care has stagnated.

(5) The government no longer runs medical care, but the government’s supervision of medical care is weak and it faces new problems

The first key to the transformation of government functions is to realize the transformation of government "Hospital" means "Hospital in Charge". The situation of government-run medical care has been fundamentally changed, but according to the survey, the government's supervision of medical care needs to be strengthened urgently.

1． There is a lack of regulation of medical access.

While Suqian strongly encourages social capital to enter the medical service market, it also lowers the threshold for hospital admission, which is not conducive to ensuring the quality of medical services. The qualifications of hospitals are related to the safety of people's lives. The management of the medical industry is quite professional. The approval of hospitals should not only value assets, but also management experience and qualifications.

Due to the simple approval procedures, anyone can apply for a hospital as long as they have money. The government currently values ??assets more than qualifications. In actual operation, the authority to approve medical institution access actually lies with the mayor and county magistrate, not with the health administrative department.

According to our interviews with relevant personnel, running a hospital requires paying the government a sum of money. Since the government approves hospitals at different levels, the charging standards are also different, and new hospitals try their best to obtain high-level approvals. Therefore, the government uses this power to make money, which has also led to the emergence of some second-level hospitals that do not live up to their names.

2. The industry supervision means is single and quality supervision is insufficient.

What and how the government regulates private medical institutions is still a matter of exploration. Relevant personnel from the Jiangsu Provincial Health Department and Suqian Health Bureau mentioned that there are currently no clear legal provisions. Therefore, economic means such as rewards and punishments are mainly used in the supervision process.

Due to insufficient supervision, the report mentioned earlier that some first-level hospitals violated relevant medical regulations and performed major surgeries; excessive medical treatment, examinations and surgeries; substandard drugs; the use of irregular drugs, or even three-no drugs; diseases that can be cured quickly Insufficient medication dosage and prolonged treatment period are very common.

3. Insufficient financial oversight and profit-making practices in nonprofit hospitals.

All hospitals in Suqian have been restructured, and they are mainly converted into private enterprises. Many hospitals have also declared themselves as non-profit medical institutions. However, the investigation found that these non-profit medical institutions still paid dividends.

After the restructuring, the health department basically cannot grasp the data of hospital operations. Hospitals will report whatever they report. Hospitals will tend to report data that is beneficial to themselves and make profits in the name of non-profit.

4． The coordination mechanism with higher-level authorities is poor.

The medical and health field has a top-down management system. After the reform, how to make the new mechanism connect with the health authorities at all levels is also a problem that Suqian's medical reform has not yet solved.

A long-term mechanism for public health investment has not been established

The second key to the transformation of government functions is to realize the government's responsibility for public health construction. In accordance with the design of the medical reform, funds obtained through the exchange of medical asset property rights are invested in public health. It is completely correct for the government to take responsibility for public health, but currently there is a need for a mechanism to ensure that the government can do this.

1. Funds obtained for medical asset replacement are limited, and public health institutions have also begun market-oriented operations.

The funds from the property rights replacement of municipal hospitals were mainly invested in the construction of buildings in the five major centers. Subordinate county-level public health agencies also adopted the same approach. The scale of these buildings is first-rate in the area.

It is not sustainable to use funds raised from medical asset replacement as investment in public health. Hospitals can only be sold once, which is "stock", while public health investment is needed all year round, which is "flow". It is unsustainable to supplement "flow" with "stock". Once the funds for asset replacement are spent, public health investment will be difficult to guarantee. In fact, the five newly established centers have basically not played much role.

We learned during the survey that the five major centers have also begun to take advantage of market-oriented operations. The 120 emergency system adopts a membership system. Select some hospitals to enter the 120 system. They pay an annual membership fee of 500,000 yuan, and the hospital prepares its own emergency vehicles. The government has indeed reduced the burden, but this undermines the first-aid principle of the emergency system. Hospitals are more willing to bring patients who can pay to their own hospitals. The Centers for Disease Control and Prevention will rent out the building and build a physical examination center; the Maternal and Child Health Center will also build a maternity hospital, which will be entrusted to the Shanghai Maternity Insurance Hospital; after the blood center (central blood station) becomes voluntary blood donation by the public, the blood station will sell blood to the hospital. , a small amount of the money is handed over to the government, and the rest is retained.

2． There is still insufficient investment in public health at the grassroots level.

The government's investment in community medical services and public health is still insufficient, and management is not standardized. We learned at a community health service center in Shuyang County that the government does not provide subsidies for the public health functions that should be undertaken by the community health service center. Planned immunization relies entirely on the voluntariness of the people. Since the relationship between doctors and patients is now tense, giving injections to children is risky, and community health service centers have no incentive to provide these services.

Residents around Yanji Town Health Center told us that township health centers are actually privately contracted, and now the only responsibility of the health center is to vaccinate. However, there is still a charge for the planned immunization vaccines for children that are free by the state. The price is 100 yuan per person, and children still need to pay 2 yuan for taking sugar pills. An official from the Suqian Medical System, who asked not to be named, believed that the government invested money in public health services, but the township-level health centers did not perform as expected by the reform.

Therefore, public health lacks a long-term investment mechanism. On the one hand, local finances are not very abundant after all; more importantly, local governments and health authorities have considered marketization of medical care to be the most effective method, and even believe that public health services can also rely on the market for construction. Officials from the local health bureau even believe that public health care does not necessarily need to be handled by the government. As long as someone is willing to handle it, society should handle it. But at present, charity has not been well developed after all, and social capital office hygiene also has the goal of pursuing profits.

Discussion on Several Theoretical Issues

(1) Positioning and Responsibilities of Medical and Health Care in Poverty-stricken Areas

Since the 1980s, my country’s fiscal system has evolved from a highly centralized The "unified revenue and unified expenditure" system has evolved into a hierarchical tax-sharing fiscal system. Expenditure responsibilities among various levels of government have been re-divided. The central government has handed over more medical and health expenditure responsibilities to local governments. This is contrary to the institutional arrangement in most market economy countries in the world where the central government and provincial governments are mainly responsible for medical and health expenditures. Higher-level governments have transferred the responsibility for health financing to lower-level governments. In the face of financial constraints, lower-level governments have pushed the main task of financing to health institutions. In essence, they have handed over the problem to the already dysfunctional market.

Under the incentive mechanism that takes GDP growth as the performance indicator, local governments are only interested in indicators such as GDP and investment promotion. Local governments, especially those in poor areas, have neither enthusiasm nor ability to engage in medical care and education. This has led to local governments increasingly reducing funding subsidies for some public health institutions, or directly selling them off. The urge to unburden local finances can be said to be an important reason for the marketization of medical reform.

Therefore, the key to solving the problem is to adhere to the scientific outlook on development and clarify government responsibilities. The central government must use effective means to ensure that all citizens have access to public health and the most basic medical services, and clarify the standards of financial subsidies for poor areas and poor people. The problem of differences in fiscal capacity between regions should be resolved step by step through strengthening transfer payments.

(2) The "Suqian Model" cannot solve the problem of "expensive medical treatment"

The "Suqian Model" positions the medical and health industry as a "commercial industry" and believes that "as long as it is Business-oriented industries can be put into the market to compete, and through competition, prices can be lowered, quality can be improved, and services can be improved." We believe this positioning is inaccurate.

Due to the characteristics of uncertainty, externalities, monopoly and high information asymmetry in the medical industry, profit-oriented marketization will inevitably lead to soaring prices in the medical industry, making it difficult to control. The United States is a typical example.

The idea of ??controlling medical prices through competition may be effective in the short term. But in the long run, competition in the medical market will not lead to a decline in medical prices. Because the main means of hospital competition is not price. We have noticed that as long as qualified hospitals are working hard to expand their scale and introduce equipment, even township health centers are not satisfied with the income from outpatient clinics and have to upgrade their quality and perform major surgeries. In other words, hospital competition mainly manifests as "non-price competition", that is, hospitals compete to provide the most advanced high-tech medical services and enhance their brands. In theory, as long as supply exceeds demand in a competitive market, prices are likely to fall. However, in the medical market, as analyzed above, excess supply can be digested by inducing demand, and doctors can make patients consume more. The result is an expansion of hospital service volume and an increase in overall medical expenses. The fiercer the competition, the higher the expenses. If this continues, the problem of "expensive medical treatment" will only get worse. This is a huge difference between the medical and health market and other consumer goods markets, and it is also one of the weak points of understanding in current theoretical and practical work.

(3) "Introducing market mechanisms" and "government-sponsored hospitals" are not contradictory

"Government-sponsored medical institutions" and "introducing market mechanisms" can be completely combined. At the same time, we combine the advantages of the market and government intervention to establish a system that has the fairness and cost controllability of government intervention and the efficiency and sensitivity of the market.

In our survey, we found that ordinary people trust Suqian People’s Hospital (which used to be the best public hospital in the area). Anyone with financial means or a serious illness will go to the People’s Hospital, even though the former People’s Hospital There is a certain loss of doctors, but people still have stronger trust in government hospitals than in other hospitals.

In our communication with hospital directors and medical staff, we also found that hospital ownership is not the key to hospital operating performance. Hospital directors and internal management are important factors for a hospital's success.

Based on the current situation in our country, a considerable number of public hospitals should be retained and the total expenses should be strictly controlled by the government. At the same time, the government's management mechanism for hospitals must be improved to create competition among public hospitals. However, the profit motive of public hospitals must be completely eliminated so that competition among them cannot be profit-oriented, but to control costs and improve quality. compete.

Summary - Suqian's medical reform was actually forced out

Suqian's medical reform, through the transformation of public medical institutions, changed the situation of the government directly running hospitals; through the introduction of social capital, Medical resources have been rapidly expanded and a competitive landscape in the medical market has been formed, prompting medical institutions to introduce corporate operating mechanisms, thus increasing the enthusiasm of medical staff, improving the quality of medical services, expanding medical service items, and reducing registration fees and drugs. Unit price and unit price of inspection items. However, the most important goals of the medical reform: public health development and the problem of "expensive medical treatment" have not yet been resolved.

The reason is that the market mechanism cannot avoid the laws of the medical and health industry. After the reform, the profit motive of hospitals has not been eliminated, but has been strengthened; opening up the medical service market too quickly and blindly pursuing the expansion of total resources has indeed led to the existence of a large number of irregular competition behaviors; due to information asymmetry, hospitals are always Various means can be used to increase profits, and they will compete to introduce expert technology and purchase more advanced medical equipment.

The increase in supply has led to the overuse of medical services, examinations, surgeries and drugs. As a result, medical expenses have risen rapidly. This not only wastes medical resources, but may also endanger the health and even lives of patients. It also makes it more difficult for people to see a doctor. expensive.

Although the government's functions have changed and it no longer "runs hospitals", the government's "hospital management" needs to be strengthened, and public health has not been greatly strengthened, especially long-term investment. The mechanism has not yet been formed. An objective reason is that Suqian's economy is not yet prosperous, and the government has not invested much capacity. The more important reason is the development concept.

Suqian Health Director once told the media that the Suqian health reformers dared to put themselves at risk because they were actually forced to do so. According to our research, this reform method is a no-brainer and is not suitable for all places.

In the long term, I believe that if the government adjusts its thinking on public health construction, increases investment in public health and basic medical service systems, and strengthens the government's supervision of medical and pharmaceutical supervision; with the development of competition in the medical market and the further standardization of the behavior of hospitals and doctors, Suqian's medical and health system will provide convenient and high-quality services to local people in the future. However, this development model is fully consistent with the marketization of medical care reflected in theory and international practice. Therefore, there will also be results confirmed by theory and a large number of international practices - the medical burden borne by the common people will become increasingly heavier.