Healthcare Reforms through Liberalizing Physician’s Practice in China

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China has the largest population of 1.4 billon globally but only 2 million physicians (1.9 physicians / 1,000 population vs. OECD average of 3.2). The healthcare system is dominated by public state-owned hospitals (employing 89% of Chinese physicians) that often offer low pay (average annual salary: US$8,000). There is increasing physicians’ dissatisfaction and difficulty in medical school recruitment, which underscores an urgency to resolve physician shortages.

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Physicians in China need two licenses to practice, the medical qualification license (similar to the board exams in U.S.) and the medical practice license – each medical practice license is registered at a single hospital and physicians are allowed to practice in one location only (the employer). As part of healthcare reform in China since 2009, regulations restricting to only one-location medical practice are relaxed. Practicing in multiple locations is expected to help improve physician income and satisfaction, extending healthcare service access and strengthening private hospitals.

However, very few Chinese physicians currently have multiple-location licenses. For example, in Shenzhen (one of China’s most affluent and reform-minded cities), none of the 6,000 physicians registered for multiple-location practice. Potentially a conflict of interests, the current regulations require the employer hospital’s principal to approve physicians for such multiple-location licenses. State-owned employer hospitals are likely to discourage physicians from multiple-location practice in order to avoid losing competitiveness to private hospitals. Despite recent attempts in Beijing to remove such approval process, the public state-owned hospitals have administrative powers to limit changes.

For effective national implementation, it is critical that the National Development and Reform Commission (China’s central government unit for economic and social reform) and National Health and Family Planning Commission (China’s Ministry of Health) work together to empower physicians in their participation in multiple-location licensing and push for healthcare reform that better meets healthcare needs in China.

Reference:

  1. China National Health and Family Planning Commission. China’s health and family planning statistics yearbook 2015. Beijing: China Union Medical University Press.
  2. China Ministry of Health. Notice on physician multiple-location practice policy (in Chinese), 2009. Retrieved at http://www.moh.gov.cn/mohyzs/s2908/200909/42823.shtml on August 12th, 2015
  3. China Ministry of Health. Notice on expanding the physician multiple-location practice policy (in Chinese), 2011. Retrieved at http://www.moh.gov.cn/mohyzs/s3578/201107/52434.shtml on August 12th, 2015
  4. Han SX, Ye L. Research and exploration of physician multi-site practice at the stage of new health system reform (in Chinese), Chinese health resources, 2013. 3: 193-195
  5. “Why did hospital heads say ‘No’ to multiple-location practicing?” (in Chinese). People’s Political Consultative Conference Report (2014). Retrieved at http://www.rmzxb.com.cn/xywy/wyjt/2014/03/26/309700.shtml on August 12th, 2015
  6. Luo JN, Wang YL, Deng ZY, Bei W, LI LD. Analysis of status and countermeasures of doctor multi-sites practice in Shanghai (in Chinese), Chinese Journal of Health Policy, 2011. 4 (12): 26-31
  7. Yip, W CM, Hsiao W, Meng Q, Chen W, Sun X. Realignment of incentives for health-care providers in China (in Chinese), Lancet, 2010. 375: 1120-1130.
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7 Responses to “Healthcare Reforms through Liberalizing Physician’s Practice in China”

  1. cgoh2 Says:

    Contributors – Helen Lian and Cheong H Goh

  2. cgoh2 Says:

    Thanks Helen!

  3. lynettewasson Says:

    This blog post is interesting, and gives insight to the physician shortage and access to care in China. In regard to access to care, I wonder if the country has non-Physicans who provide care, such as Nurse Practitioners and Physican Assistants, as they have here in the US? In rural ares of the United States, I know that these non-Physican healthcare professionals are important in providing care for those that have chronic shortages of Physicians.
    I wonder if all state-run healthcare facilities have the same level of pay and working conditions? If so, I image there would not be an incentive for providers to work at various state-run healthcare facilities. There also seems to be a lack of privately-run healthcare facilities, where the market there may already be saturated with providers who don’t want to leave.
    Thank you for your post and the insight!

    • hlian Says:

      Thanks for your interests! There are not really NP or PA professionals as it is in U.S. This is actually one of the key issues – people only trust the top experts to make medical decisions (these would be highly specialized doctors) and certified physicians in lesser-known facilities are not even well trusted.
      All state-run facilities have similar pay on surface but the physicians receive a sizable grey income based on drug prescription / surgeries. Hence doctors are highly incentivized to stay with high volume state-own hospitals. You are definitely right – there is a lack of privately-run facilities and one of the key reasons for that is the lack of physician talents.

  4. eugeniachock Says:

    It is intriguing that despite being one of the largest population in the world, the physicians per 1000 capita is low. Although there are multiple restrictions for approving physician licenses and these are definitely barriers that need to be solved as mentioned by the authors, one ponders the attitude of a community towards medical care. As I understand, traditional Chinese medicine is closely ingrained in the daily lives its community therefore accepting Western medicine may be a barrier. Apart of this, a community may not perceive that there is a need for better healthcare access given their cultural believes and attitude towards modern medicine. Nevertheless, there is a need for a comprehensive and wholesome approach towards better healthcare access and this starts with understanding the needs of the community.

  5. etan16jhu Says:

    Thank you for your insightful post highlighting the potential benefits in allowing multi-center practice. Do you think that allowing doctors working in state-owned hospitals accreditation to practice in private hospitals per se may tend to lead them to seek greater financial remuneration and as such lead to compromised care in state-owned hospitals? I am assuming that state-owned hospitals bear the bulk of care for the general population which are not financially replete and are dependent on state-financed medical care.

    • hlian Says:

      Thanks for the questions! Arguably the care provision is already heavily dependent on financial remuneration. Physicians in state-run facilities receive kick-back from pharmaceutical prescription etc. I don’t think allowing the physicians to practice in private hospitals will make things worse – actually it has been shown that private hospitals do a better job controlling kickbacks and pays physicians higher base salary instead.

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