China’s Health Reform Must Address Costly, Unnecessary Treatment, Report Says

China’s $124 billion three-year “overhaul of its healthcare system needs to address the prescription of unnecessary drugs and treatments – a widespread practice relied upon to finance the medical sector, the World Bank said Thursday,” China Daily/People’s Daily Online reports. The country’s “ambitious” reform efforts aim to “provide basic medical coverage and insurance to the country’s 1.3 billion people,” according to the publication (7/24).

Canadian Press/ writes: “Though mostly state-owned, [China’s] public hospitals rely on profits from the sale of drugs and expensive treatments and tests to cover operating expenses. The facilities have been accused of aggressively prescribing expensive and sometimes unnecessary drugs and treatment, creating a heavy burden on patients and a waste of medical resources.” Almost 50 percent of the revenue at health facilities in the countryside come from drug sales, said Yanzhong Huang, an expert on China’s health system and director of the Center for Global Health Studies at Seton Hall University.

As a result of these practices, “new ways must be found to finance health care provision,” according to a World Bank report that addresses reforming China’s rural health system. “It added that reforms should encourage health providers to watch their costs and prescribe treatments appropriately,” Canadian Press/ reports. Adam Wagstaff, the report’s lead author, said China must implement a system that doesn’t encourage the delivery of “unnecessary care or care that is unnecessarily expensive,” which he described as “the biggest challenge.” China has launched several projects to address the issue, the bank said (Wong, 7/24).

The KFF Daily Global Health Policy Report summarized news and information on global health policy from hundreds of sources, from May 2009 through December 2020. All summaries are archived and available via search.

KFF Headquarters: 185 Berry St., Suite 2000, San Francisco, CA 94107 | Phone 650-854-9400
Washington Offices and Barbara Jordan Conference Center: 1330 G Street, NW, Washington, DC 20005 | Phone 202-347-5270 | Email Alerts: | |

The independent source for health policy research, polling, and news, KFF is a nonprofit organization based in San Francisco, California.