Reforms aimed at ending county-level public hospitals relying on drug sales to supplement their incomes will be adopted at all such hospitals nationwide by the end of October.
The move was announced by China's top health authority on Thursday.
By early this month, 3,297 of these hospitals had made the reforms, accounting for 78.3 percent of such hospitals in China, said Fu Wei, deputy chief for administrative reform at the National Health and Family Planning Commission.
The reforms have been introduced at 764 major public hospitals in cities, Fu said.
Reforming public hospitals is the core part of a broader overhaul of the national healthcare system.
Officials said the reforms are aimed at setting up a modern hospital management system and changing the profit-seeking nature of public hospitals so that they are operated for the public good.
A key measure of the reforms is for public hospitals to stop selling drugs for up to 15 percent more than the price they pay for them from pharmaceutical companies.
This practice had been adopted by public hospitals for many years.
Experts say it encourages hospitals to prescribe more expensive drugs to patients and that selling drugs has contributed to 40 percent of hospitals' income in some areas of China.
However, the practice has also been a major contributor to patients' complaints of increasing financial burdens, according to the experts.
More than 3,000 county-level public hospitals and 446 city-level ones had stopped the practice by early this month, the commission said.
Fu said health authorities will reduce the price of drugs by reforming the drug flow system.
To compensate hospitals for the loss of revenue, fees for services provided by medical staff members will be increased, Fu said.
The commission said that following the reforms to county-level public hospitals, reforms to city-level ones will be launched in 100 cities by the end of the year.
