The Sanming Three‐in‐One Model: A Potentially Useful Model for China's Systemic Healthcare Reform

In the last few years, China has made remarkable progress in increasing life expectancy and expanding the coverage of health insurance. However, China is facing new challenges including the growing aging population and a hospital-centric health delivery system.1, 2 Thus healthcare reform is continuing to move forward.3-5 China's government decided in 2016 to deepen its ongoing national health reform to achieve “Healthy China 2030.” President Xi Jinping announced the Healthy China (HC 2030) blueprint, a bold declaration that gave priority to public health over economic and social development.6 Anhui and Fujian were among the provinces identified by the Chinese government to pilot the national health reform. The future for healthcare in China may have been discovered in Sanming, a small city located in Fujian Province. According to public information, the reason for Sanming's medical reform was the urban workers' medical insurance fund facing the risk of collapse. By 2011, the actual loss reached more than 200 million Yuan, and the pressure on medical insurance payments was huge. Instead of addressing the issue as a stand-alone difficulty, Sanming attempted a comprehensive reform in 2012, led by Vice Deputy Mayor Zhan Jifu. Sanming developed a systemic reform plan covering three crucial areas. First, the governance structure was reformed to integrate the management of three medical insurance schemes (for urban residents, rural resident, and civil servants) at the city level. In addition, a medical insurance management center was established to promote the linkage of medicine, medical insurance, and hospitals, and to become a good example for promoting medical insurance work nationwide. Second, Sanming made the drug procurement process more uniform to reduce drug prices. A “two-invoices mechanism” was implemented that allowed only two invoices through the wholesale chain, one from the manufacturer to the distributor and another from the distributor to the hospital. In addition, pharmaceutical procurement was centralized to remove unnecessary intermediate medicine distributors. Those two reform programs were supported by the “Several Opinions of the General Office of the State Council on Further Reforming and Improving the Policies on Drug Production, Circulation and Use (No. 13 [2017] of the General Office of the State Council).”7 Third, Sanming altered physician compensation methods by delinking physician income from unmonitored profits (medical rebate) that accounted for more than 80% of their total income before the reform. Instead, physicians were paid a higher basic salary plus a performance-based bonus. The normal compensation (basic salary) to physicians in public hospitals currently makes up one-third of their total compensation, with the other two-thirds coming from bonuses derived from profits generated. The implementation of this reform program did not cause a large-scale turnover of medical staff. In the past 5 years, the number of doctors resigned has not increased significantly, and only less than 40 medical staff leave from Sanming City's public hospitals every year (the total medical staff members number more than 10 000). Sanming medical reform was supported and appraised by authorities. In February 2016, Xi Jinping, the Chinese president, gave his endorsement by commenting that Sanming had achieved demonstrable progress in reforming the public hospital system. China's State Council immediately issued a policy that the Sanming model would be replicated nationwide and strongly recommended this model.8 On June 15-16, 2018, Hu Jinglin, director of the National Medical Insurance Bureau, visited Sanming to review the medical insurance plan. He said it was necessary to give full play to the pioneering role of universal medical insurance in medical reform. Medical reform in Sanming was reported comprehensively by the State Council as a successful example of medical reform. The Sanming model significantly reduced medical costs without measurably sacrificing clinical quality and productive efficiency.8 From 2014, the systemic reform reduced the medical care cost per outpatient visit by 6.1% and per inpatient admission by 15.4%. This achievement was largely accomplished through a decrease in drug expenditure per outpatient visit of about 29% and per inpatient admission of about 53%.8 The unique healthcare reform in Sanming also reduced the weighting of drug sales in hospital revenue from 47% to 26%. The medical insurance fund has improved from a deficit of 200 million Yuan to a positive balance of 130 million Yuan, meaning Sanming medical insurance moved from a deficit to a balance. Figure 1 presents the basic information describing Sanming medical reform in 22 public hospitals. The following four points should be proposed when the Sanming mode is expanded to the whole country: (1) The chief leaders of the party and government are responsible for supervision; (2) the Medical Insurance Bureau unified allocation of resources; (3) a three-step policy for medical reform should focus on economic efficiency, treatment of disease, and prevention of disease; and (4) combating medical corruption should be a priority. Furthermore, large hospitals and the elite class of physicians may be the biggest stumbling blocks in this stage of reform. Physician turnover may occur in some areas because of a substantial reduction in real income. The government should therefore open up the threshold of social capital to run medical services and vigorously promote commercial medical insurance. The public welfare attributes of public hospitals should also be highlighted. Further medical demand needs to be achieved through luxury private hospitals and associated commercial insurance. We especially want to express our gratitude to Jian-Feng Wang (Finance Department of Fujian Provincial, Fuzhou, China) who helped us collect the data. Conflict of Interest: The authors have declared no conflict of interest for this article. Author Contributions: Qiang Liu had full access to all of the data in the study and takes responsibility for the integrity of the data and the accuracy of the data analysis. Study concept and design: Tu, Zhong, Zhan, and Liu. Acquisition of data: Tu, Zhan, and Liu. Analysis and interpretation of data: Tu and Zhong. Drafting of the manuscript: Tu, Zhan, and Liu. Critical revision of the manuscript for important intellectual content: Zhong. Administrative, technical, or material support: Tu, Zhan, Liu, and Zhong. Study supervision: Liu. Sponsor's Role: None.