Issues at heart

New procurement process to drive down medical cost


Now 90% cheaper in China

One of the oft cited reasons for why mainland Chinese save so much is the high cost of medical care.

Because families could be landed with hefty hospital bills due to accidents or illness, they have traditionally consumed less, preferring to save their money for a rainy day.

So as to reduce this obstacle to economic growth the Chinese government has been trying to lower the burden of healthcare expenses by increasing insurance cover and cutting the price of drugs through collective procurement schemes.

Now the Ministry of Health has begun using the collective procurement method to drive down the cost of coronary stents – reducing their cost by more 90%.

The group purchase – backed by 2,400 hospitals – saw eight companies bid to supply the one-million-piece order, producing a saving of almost Rmb11 billion ($1.67 billion) for Chinese patients, said.

Previously hospitals paid an average of Rmb13,000 per stent, several times more than hospitals in Europe were paying for their coronary prosthetics. The reason: a complex and often corrupt procurement system in which layers of middlemen all added something to the price along the way. Under the new procurement system the most expensive stent is just under Rmb800 and the cheapest model less than Rmb500.

“The control of high-value medical consumables is the most far reaching and most difficult-to-resolve area of medical price reform,” Xinhua quoted a procurement official as saying.

China currently carries out about one million coronary angioplasty operations a year and uses about 1.5 million heart stents. The numbers are low compared to the West but are forecast to grow as much as 20% a year as China’s population ages and puts on more weight, according to the Ministry of Health’s most recent Cardiovascular Health and Disease Report.

Because of the high cost of stents, many people who needed them were unable to afford them till now, even with the help of the government’s health insurance scheme.

The cheaper stents will be available for use from January and the order should cover 70% of national requirements, Xinhua said.

One popular medical weibo celebrity, Ling Chumian from the Huazhong University of Science and Technology, could not have been happier about the development

“Now few patients will have to forego stent operations because they cannot afford the cost. This is truly marvellous,” he gushed in a video post.

Yet some wondered if the price reduction came at the cost of quality.

Health officials were quick to shoot down this notion explaining that the stents were the same items that hospitals had always used – only now were cheaper because they were bought directly and in bulk.

“We will work with the safety and quality supervision department to form a traceability chain for each coronary stent from production, circulation and use, so that patients can use it with confidence,” one official said, adding that the stents came from a combination of domestic and international suppliers.

The procurement story is a welcome success for the Ministry of Health after years of often failing to reduce medical costs.

Previously the government had simply tried to cap the price of various essential medical goods – a move that was not always effective.

But last year it introduced a system to collectively purchase commonly-used drugs that dramatically reduces the cost to the patients, according to CCTV. Over the course of this year health bosses have managed to slash the price of widely-used heart, diabetes and cancer medicines by over 50%.

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