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Chinese clamp down on hospital overcharging

The Chinese government has ordered Beijing's 600 hospitals and clinics to stop overcharging patients for unnecessary drugs and expensive examinations.

The hospitals have been set an October deadline in an attempt to limit the rapidly rising costs of medical treatment, a source of much complaint among patients. Needless prescription of drugs by doctors has also been wasting valuable resources, said the ministry of public health.

The problem stems from the cash strapped nature of most hospitals. In theory, prices in state hospitals for routine clinical consultations and operations are fixed extremely low–under 40 p (65 cents) for a consultation and £6 for an appendicectomy. Thus hospitals and clinics try to compensate for this by prescribing expensive drugs and conducting expensive examinations using new and sophisticated equipment. Separate fees are also levied for all ancillary services, such as the use of a bed, electricity, room cleaning, and any hospital food.

A recent ministry of public health survey of 210 000 people showed that more than half of those who became ill did not bother to seek treatment because the costs were too high. Healthcare costs are growing by 30% a year on average across the country.

View larger version (111K): [in this window] [in a new window]   Most Beijing hospitals are short of money ALAIN LE GARSMEUR/PANOS PICTURES

Hospitals have been told to cut charges for examinations using "special medical facilities" by 10%. Beijing residents with incomes below the official poverty line and childless elderly residents should be given discounts of 20-50% for examinations and operations. The new edict also specifies that 10% of hospital earnings from clinical consultations are to be set aside to fund medical research. However, it is unclear how these regulations will be enforced.

The central government has a vested interest in reining in healthcare costs because many Beijing residents and pensioners are still attached to state "work units" which must reimburse a large part of their employees' medical costs. The people most at risk, however, are those working for decrepit state enterprises that can no longer afford to provide the so called "iron rice bowl" social benefits, such as free health care and education. Medical insurance schemes are still at an early stage of introduction.

The Beijing reforms follow similar measures taken by Shanghai three years ago. That pilot project claims to have saved more than 3bn yuan (£250m), according to the official newspaper, the China Daily.

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