Hospital Reforms in Rural China Increased Patient Satisfaction

Xiao Huaqing, a pediatrician at the People’s Hospital of Yiyang County, Henan Province in central China, now follows standardized clinical protocols to treat his patients.

Called a “clinical pathway”, it is literally a computerized checklist that serves as a roadmap for both caregivers and patients throughout their treatment. It lists everything from what tests a patient can expect before surgery to how soon he or she should be discharged from hospital and most importantly, how much each treatment would cost.

Flexibility is built into the clinical pathways, still giving doctors discretion over elective services based on different patients’ condition. But case payment is fixed, regardless of whether electives services have been provided.

“It has curbed overtreatment and reduced patient out-of-pocket spending,” said Dr. Xiao.

Yao Xinglian, a villager in Yiyang County, brought her one-year-old son to the hospital for a cure of his bronchitis. When she was checking her son into the People’s Hospital of Yiyang County, she was informed that her son would be treated via Clinical Pathway A, used for not- so-serious condition of bronchitis. The total cost would be RMB 620 (US$100). And she could pay after her son recovers. It was a big change from the past.  

“Before we had to pay a deposit before hospitalization and had no idea how big a bill we’d get when we were about to leave hospital,” she said. “But now we know exactly how much we’ll need to pay even before being hospitalized and can also make payment later.”

Curbing overtreatment

In 2009, the Chinese government launched healthcare reforms to fix a dysfunctional system that was plagued by high costs and poor quality of care. A serious problem back then was over-prescription and over-treatment.

Hospitals were allowed to charge a 15% mark-up on the price of medicines, which induced physicians to prescribe more drugs and to choose more expensive ones. Besides, a fee for service system, in which hospitals were reimbursed for each service they provided, regardless of the quality of care, encouraged doctors to perform unnecessary tests and treatments.

To address such problems, Henan Province is undertaking a comprehensive hospital reform in rural public hospitals, with support from the World Bank/DFID-funded Rural Health Project.

The reform includes adoption of computerized clinical pathways, a shift from fee-for service to case-based payment, performance-based payment for care providers, and IT based monitoring on service quality of healthcare facilities.

Unnecessary services for clinical-pathway patients were slashed, saving money for both the patients and their insurers.

Since the reform began in 2009, the People’s Hospital of Yiyang County, for example, has seen patients’ hospital stays reduced by over a full day while their medical expenses decreased by 5-8 percent. But in the meantime, the hospital’s revenues increased 8.7 percent since improved health services drew more patients.

Performance-based payment for care providers

A part of the increased revenues are distributed to hospital staff as rewards based on their performance at work.

“We have clear standards in each category to make sure our staff will be compensated fairly,” said Lu Panxia, Vice President of the People’s Hospital of Yiyang County. “This incentivizes the team to work harder and think harder of how to improve their day-to-day work.”

“They’ve become very active in participating in and facilitating the reforms in their hospitals,” says Liu Gendang, Deputy Head of Health Bureau of Yiyang County.

Liu says after the performance-based system was set up, medical staff in his county has seen their monthly salary increased RMB 330 (US$55) on average.

 Service quality monitoring

With a hospital-wide IT platform that records each staff’s performance, monitoring is now in real-time and helps prevent cases of malpractice.

Regular “health checks” are performed by third-party organizations on all the reforming hospitals in Henan Province, ensuring that their services are transparent and on route of continuous improvement.

The reforms contribute dramatically to patient satisfaction. “Our patients are getting better service and paying less – of course they are happier. The relationship between them and us hospital staff is also becoming closer,” Dr. Xiao says. “They know what they can expect of us, and what we expect of them.”

No medical disputes occurred since the reforms and the satisfaction rate among hospitalized patients increased to 99%, Liu says of his county.