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The Role of Private Sector in Nation’s Health Care Reforms

August 30, 2005

Alexander Wan: What would you like to tell our readers?

Allan Gabor, Pfizer: Pfizer is a pharmaceutical company with strong global resources and capacities, and would like to build partnerships among the public, private, and patient health sectors to support health care reforms. We believe that emphasizing prevention, wellness, early diagnosis and early treatment can keep disease from many personal health care disasters. Pfizer China has provided philanthropic patient education on disease awareness on many disease categories, such as cardiovascular disease, mental disease, infectious diseases, men’s health, hepatitis B, and HIV/ AIDS even though we don’t have products right now for hepatitis B and HIV/AIDS in China. On average, there is savings of more than US$2 for every US$1 invested in early prevention programs.

Li Zhongyuan, China Health Care Group: The primary responsibility of the government should be to fix the basic healthcare coverage in China. Given the wealth differentiation, the healthcare industry should also encourage market-oriented premium health care services to the section of Chinese population who can afford them. The leading public hospitals should be permitted to engage in premium health care services in co-operation with credible offshore players in various forms. Public hospitals can only maintain their current positions as centres of excellence in various specialities by introducing contemporary health care ideas and practices and expertise by working with high-end patients systematically. The government should regulate public hospitals by encouraging and guiding them to do the right things and help them deal with the budgetary reality they face.

Anne Zhang, L’Oreal China: Settle on a practical hospital management policy as soon as possible:

1. Open up the hospital operation system as soon as possible: every hospital could have high charges for patients who want better and private service. The government could have a special price system for people who enjoy government medical insurance.

2. Decrease period of hospitalization and build a community medical service centre system for common diseases.

3. Cutting drug prices is not the right way to lower the whole package of medical fees.

4. The public bidding policy for drugs should not be controlled by government – it increases the corruption in government.

Vic Lazzaro, China Care Group: Require all public hospitals to provide emergency care. Such services should be paid for by the government on a fee-for-service basis in a pre-determined rate structure. All other services would be considered elective and would be paid for by the patient and his insurance policy where applicable. We should create a scale for determining the ability to pay based on income, assets or other methodology to determine who is medically indigent. It is the government’s responsibility to lead in this change process. However, the Chinese Hospital Association should be asked to create a committee of prominent hospital leaders to serve as a commission to assist the government.

David Jin, Philips Medical System: What I would like to say to the Chinese Government is to make it a top priority and significantly increase investment in the health care sector in order to build an effective health care system based on the contributions by both governmental and private sectors. I would like to see various stake-holders in the process jointly contribute to a sustainable growth model. Philips Medical Systems will definitely do its part by working together with various stake-holders towards the healthy development and long-term growth of China’s health care sector.

Dr Jonathan Seah, Parkway Group Healthcare:

As the largest private hospital group in Asia, we strongly believe that the development of private for-profit health services in any country should be closely co-ordinated with the public non- profit healthcare system. Properly executed, an effective private healthcare system can help reduce or maintain the total health care expenditure in a country.In Singapore, for example, where our company has the majority market share of private health care services, the total healthcare expenditure for the country is only around 3 per cent of GDP – and actual government expenditure constitutes only about a third of that (about 1 per cent of GDP). As a comparison, health care expenditure in the United States is around 12 per cent, in Canada about 9 per cent, in the United Kingdon and Japan about 7 per cent. This, however, can only happen when there is a good understanding of what the different roles of the public non- profit health care system and the private for-profit hospitals are. In Singapore, an important part of this strategy is limiting premium and elective services at public hospitals in order to reduce costs for the non-profit health care system, as well as to focus public resources on providing a good level of basic health care to a larger segment of the population. Patients who desire a premium level of care, or who seek elective services not considered “basic medical care” are cared for by the private for-profit healthcare system. Additionally, this system cannot evolve in a vacuum, but has to be developed along with other elements of the health care infrastructure.

Stanley Tam, MD, Harvard Medical School: What you are trying to do to reform the health care system is extremely critical to the health of the people and the eventual economic growth of China. The most efficient and effective plan is to involve both the public and private sectors, with clear guidelines and regulation governing the role of public institutions in the areas of public health and basic health care services, avoiding using public institutions in for- profit efforts. To improve the over all health care system, one must have clear metrics to measure any interventions, so that we could build on prior experiences. The private sector should be given freedom to operate under certain regulations so to benefit the entire health care system.

Alexander Wan: Can you share with us the roles your company would like to play in China’s health care reforms? Tell us your experience in other countries.

Allan Gabor, Pfizer: Pfizer is committed to supporting health care reforms in both urban and rural areas in China. Pfizer China has worked with the Ministry of Health to initiate an advanced hospital management training programme at Beijing University. The Advanced Hospital Management programme has exposed senior hospital management personnel nationwide to innovative management theories and practices to increase efficiency and effectiveness. Pfizer China has supported a pilot rural co-operative health care system in Yunnan programme to explore the best practices on health care reform in rural areas. In the United States, we launched A Healthy State health care management initiative in the state of Florida, called “Healthy Florida” to support health care reforms for ageing people.

Li Zhongyuan, China Health Care Group: We would like to nurture the creation of a rational and viable private health care service market in China by systematically introducing international expertise, capital and technology. The core component of such work is working with leading public hospitals and introducing advanced ideas and management in a commercially viable way. We have worked with partners in countries such as the United States, the United Kingdom and India.

Allan Choate, The Asia Foundation: With the support of the Pfizer Foundation, The Asia Foundation (TAF) has launched two pilot projects in China’s rural areas called “New Rural Cooperative Healthcare Scheme”, in collaboration with the Ministry of Health.

In the first place, the scheme – with a co-payment structure built in – is expected to fill an over-decade-long void of a health care safety net in China’s rural areas. Once the farmers participate in the scheme, they pay an annual fee of 10 yuan into a pool (matched by another 10 yuan subsidized by the provincial government and the central government respectively) and are entitled to get medical reimbursement. So, from the demand side (farmers) perspective, the new scheme is revolutionary in that it helps cover farmers’ medical cost in an unprecedented manner. Our programme has integrated the supply side reform (the reform of rural area hospitals, clinics, and other service output performers) so that both sides work well in parallel and contribute to the efficiency and sustainability of the new scheme.

Alexis Vannier: PSA Peugeot Citroen: Since last year, we have been deeply involved in road safety and education in China. We have already created five Road Safety Think Tanks in different major cities in China (Beijing, Chongqing, Wuhan, Guangzhou and Xi’an). Every two months or so, we invite a leading Chinese or international expert to give a lecture to these think tanks attended by the media as well as the authorities and medical officials.

Stanley Tam, MD, Harvard Medical School: I am currently the president and CEO of the new Huashan Pudong Hospital, the first Harvard Medical School-affiliated hospital. I have been a veteran in the Harvard medical community for many years. We intend to provide high-quality health care to patients in every economic and social class. We will provide valuable training and education.




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