Private hospital price controls relaxed

China will relax price controls over non-public hospital services in a move to encourage the development of private healthcare, authorities announced on Wednesday.

Private organizations will be able to make pricing decisions based on markets and adopt flexible charging methods for their medical services, according to a circular jointly issued by the National Development and Reform Commission, the National Health and Family Planning Commission and the Ministry of Human Resources and Social Security.

The circular also said that all designated non-public hospitals should be included in public medical insurance schemes and benefit from the same reimbursement policies.

"Easing price controls is necessary to let the market decide medical resource allocation," Liu Yuanli, director of the school of public health at Peking Union Medical College, told the Global Times Wednesday. He noted that these measures show the government wants the private sector to play a bigger role in the future.

Liu stressed that it does not mean that non-public hospitals get to raise prices without limits to gain profit, since their prices will be affected by other factors, including patients and social security institutions.

The circular recommended all non-public hospitals to set up a transparent pricing system, and asked related government departments to strengthen supervision over pricing among non-public and public health institutions to safeguard patients' rights.

Experts believe the measures will encourage more private capital into the healthcare sector to increase the supply of medical services, and help ease the problem of inadequate health provision.

Private hospitals can offer more varied services, though they may cost more, Zhou Zijun, professor with the School of Public Health of Peking University, told the Global Times.

"Private healthcare development will relieve some pressure on public hospitals while encouraging competition to improve their service," Zhou said.

Guan Weili, who runs a non-public hospital in Wenzhou, applauded the measures, saying that this will bring more opportunities for their development.

"Setting prices independently means that we can introduce more high-end medical services to meet the public's demands," Guan said.

"It will also attract more investment in the private healthcare sector," he added. Guan said that the new measure will not impact public hospital pricing, which is financed by the State and regulated by health authorities.

The State Council held an executive meeting in March, stating that China will establish a universal medical insurance system, speed up reform of public hospitals, and relax market entry requirements for the private sector to build health institutions.

The number of public hospitals will be controlled and medical resources will be optimized, according to a statement following the executive meeting.

Controlling the number of public hospitals and stimulating the development of non-public hospitals will boost benign competition to benefit the public, Guan said.

Official figures show that public hospitals, which totaled 13,440 by the end of October, 2013, provided 90 percent of China's medical services .

There were about 5,400 private hospitals in the Chinese mainland in 2008, which rose to 10,877 by the end of October 2013, the Xinhua News Agency reported.