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Overview of China healthcare system

China achieved universal health coverage in 2011.

  • The urban employed is covered via an employment-based program and is funded through the employee payroll and employers.

  • Other residents can enter into the Urban-Rural Resident Basic Medical Insurance, which is funded through central and local governments through individual premium subsidies.

  • In 2003, the voluntary Newly Cooperative Medical Scheme was introduced for the rural population.

In 2016, China government planned to merge Urban-Rural Basic Medical Insurance and Newly Cooperative Medical Scheme.

Besides these three insurances, private insurance is available to cover additional benefits that are not covered by insurance. Private insurance accounts for 6% of total healthcare expenditure.

Chart of per capita expenditure on healthcare in G20 countries. China spends ~USD 900 on each individual for healthcare services. US spends highest in terms per capita expenditure
Per-capita expenditure on healthcare in G20 countries


Central government: The central government handles national health legislation, policy, and administration.

Local government: Local governments are responsible for delivering services

National Health Commission: The national health agency is the National Health Commission. It is responsible for determining health policies. It supervises and administers public health, medical care, family planning, and emergency response.

State Medical Insurance Administration: Responsible for basic medical insurance programs, maternity insurance program, drug price negotiation, health services price negotiation, and medical financial assistance program

National Development and Reform Commission: Responsible for health infrastructure and competition among the providers

China Drug Administration (NMPA): Responsible for drug approvals

Delivery of services

Primary care is delivered by

  • Village doctors in rural clinical

  • General physicians and family doctors in urban hospitals

  • Medical professionals in secondary and tertiary hospitals

People are suggested to seek care in clinics, town hospitals, or community hospitals as the cost-sharing is less than the secondary and tertiary centers. However, citizens are free to seek care as per their choice. In China, general physicians are employed in hospitals. Nurses and nonphysician clinicians are employed as caretakers.

Local health authorities and the Bureaus of Commodity Prices determine the fee schedules for primary care in government hospitals. Physicians in the government hospital cannot charge more than the fee schedule. However, the Chinese government allowed non-public clinics to charge more than the fee schedule to promote private investment.

Village doctors and healthcare workers receive payment from clinical services and health services reimbursement. General physicians working in the hospitals receive salaries along with activity-based incentives.

Prescription drug expenses

Outpatients: 42% of expenses

Inpatients: 28% of expenses

The physicians provide outpatient services in the hospitals. Specialists receive a salary plus activity-based compensation.

Hospitals: Hospitals are both public and private funded; profit and non-profit hospitals are available. Community hospitals and town hospitals are primarily public, whereas secondary and tertiary services are available in public and private hospitals.

Hospitals are paid through insurance and co-payment. Public hospitals also provide subsidies.

Long-term care and social support are not included in Chinese healthcare services.

Reimbursement and pricing of pharmaceuticals

The Ministry of Labor and Social Security maintains the BHIS formulary, which mainly targets in providing basic health but not cost-effectiveness.

The Ministry selects the individuals from the local bodies and the experts will decide whether the drug need to be included in the list A or list B.

The review of drug selection is expected to happen in every year.


The National Development and Reform Commission (NDRC) is the body that keep the maximum price for drugs listed in the list A and B. NDRC considered the average production cost, R&D costs for setting the price.

Pharmaceutical companies can keep higher prices if

  • Peer review publication regarding safety and efficacy

  • Proper quality in the past

  • For adverse reactions, a surveillance system is necessary

Local authorities also have rights in setting up the prices.

  • Prices for OTP products

  • Based on NDRC prices, list B products can be varied around 5%

  • Some drugs added to list B by local bodies


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