Recently in Rationality

China may censor the shit out of the internet, and may or may not violate human rights, but at least it’s apparently considering practical, cost-effective healthcare measures.

China has moved to control healthcare costs for its citizens from Beijing, setting plans to purchase and distribute hundreds of essential medicines that are now mostly sold at huge mark-up prices through hospital pharmacies.

The measures are part of an Rmb850bn ($124bn, €88bn, £75bn) overhaul of the country’s ailing health system, aimed at securing basic medical services for every citizen and increasing efficiency and transparency in drug use.

When Beijing began reforming its communist economy 30 years ago it discontinued free healthcare for all and, by 2000, the majority of the population was uninsured. Although the authorities have since tried to build a new healthcare system, large numbers of rural residents and migrant workers still cannot afford healthcare.

“By 2003, 30 per cent of poor households in the government’s National Health Survey were reporting healthcare costs as the main cause of their poverty,” the World Bank said in a report on health reform in China this year.

The World Bank said misaligned incentives encouraged hospitals to make money from selling drugs. China’s share of pharmaceutical expenditure relative to total health expenditure was nearly 45 per cent in 2003, compared to an OECD average of about 15 per cent.

Beijing has pledged to decouple hospital revenues from pharmaceuticals sales. “The essential drugs used in government clinics will be purchased centrally through government-controlled institutions, to be picked by provincial governments,” the health ministry said in guidelines published this week. Other clinics would also have to buy these medicines through similar mechanisms.

Via ft.com