NHSA Quietly Releases Implementation Guides for Establishing Medical Service Pricing Items
Executive Summary
In China, both public and private not-for-profit hospitals are required to adhere to the Medical Service Pricing Catalogs to provide patients with diagnoses and related treatments.
However, the highly decentralized governance structure has led to a fragmented medical service pricing system. Over 300 funding units operate independently, setting prices autonomously instead of following a unified national framework.
Under the previous pricing framework, medical service pricing items were intricately linked to technical specifics and internal hospital operations, making them susceptible to incompatibility due to minor changes in clinical practices, such as the location, steps, or methods of an operation. As a result, healthcare institutions frequently had to obtain approval for new price items to offer and bill for these services.
Despite previous directives from national authorities emphasizing the need for standardized management of medical service pricing items and the establishment of an output-oriented price management system to better align with clinical and pricing management needs, there was a lack of specific and clear implementation guidelines.
Therefore, the NHSA's release of the 'Guideline for Establishing Obstetric Medical Service Pricing Items (Trial)' on June 15 marks a significant advancement. This comprehensive guide, one of the first of its kind, harmonizes various obstetric medical service pricing items from different regions into 30 unified items. It also introduces new service items such as 'labor analgesia,' 'Doula delivery,' and 'family companionship during childbirth' to better reflect advancements in obstetric care.
In response to public inquiries, the NHSA stated, "We are systematically coordinating experts from various disciplines to standardize and integrate medical service pricing items nationwide and to compile guidelines for their establishment. Following a phased approach, we have already issued seven batches of price item establishment guidelines, covering areas such as 'organ transplantation,' 'clinical scale assessment,' 'traditional Chinese medicine (moxibustion, cupping, massage),' 'external treatment of traditional Chinese medicine,' 'dental implants,' 'assisted reproduction,' and 'traditional Chinese acupuncture.' The obstetric guideline is the eighth batch."
Though still in the early stages, the release of these guidelines clearly defines key directions for the future of medical service pricing in China. It also supports the NHSA's objective of establishing a unified national framework for the pricing and reimbursement of medical consumables across the country.
Output-Oriented Price Management
The Guideline for Establishing Obstetric Medical Service Pricing Items represents a move towards "integration" in medical service pricing, with a focus on an appropriate level of price item granularity. This new approach departs from the previous method of tightly linking specific procedures to price items. The objective of integration is to align service outputs and resource consumption across regions with the technical service and price item relationships established by the National Health Service Technical Standards. This enhances the compatibility between price items and clinical procedures, facilitating the clinical adoption of innovative technologies.
For example, in cases of difficult labor, different regions previously had separate price items for procedures such as forceps delivery, breech delivery, fetal head rotation, and manual placenta removal, based on varying scenarios and methods. Despite these procedures having similar technical difficulties and resource consumption, the guideline has standardized and integrated these disparate obstetric price items into 30 unified items to better reflect clinical practice.
In line with these output-oriented pricing principles, provinces like Guangdong have recently introduced "exclusion criteria" for adding new medical service pricing items. These criteria exclude items that are exclusive due to specific equipment, consumables, inventors, or technical schools of thought; new medical technologies or activities that can be incorporated into existing price items; and items that do not comply with guidelines from the National Healthcare Security Administration or have been explicitly denied for addition by other provinces as per NHSA approval.
These measures are crucial for reducing regional pricing disparities and aligning hospital services with advancements in medical care.
Properly Reflecting Human Care
China's historically planned economy has emphasized the welfare aspect of public hospitals, resulting in artificially low medical service prices that often fail to adequately value the human care component of treatments.
This historical context has shaped the unique pricing structure in China today, where medical service prices are largely based on hospital expenses. Within this framework, drugs and medical consumables account for the majority of costs, while labor expenses are significantly underrepresented.
The impact of this pricing structure is evident in China’s ongoing provider payment reform. The introduction of China's DRG/DIP provider payment reform occurred before the overhaul of medical service pricing, causing DRG/DIP payments to inherit the issues from the legacy pricing system. This has led to problems such as inaccurate base data for disease-based payments by medical insurance, increased difficulty in cost estimation, and a pressing need to expedite medical service pricing reform.
The Obstetric Medical Service Price Items guideline addresses this issue by explicitly recognizing the value of medical technical labor. It proposes creating separate pricing items or additional charges for complex situations and operations that involve high technical labor value and significant risk, thus reflecting the variations in technical difficulty.
Another essential aspect of accurately reflecting the value of technical labor is to separate the pricing of medical services from that of medical consumables, a measure that is also vital for promoting genuine medical innovation.
Extensive Involvement of Medical Expertise in Updating Medical Service Pricing Catalogs
In the past, medical service pricing reform policies have stressed the importance of incorporating suggestions from medical institutions and healthcare professionals, especially for complex medical services. In pilot regions, medical institutions typically propose pricing adjustments.
To develop the Obstetric Medical Service Pricing guidelines, the NHSA took a more structured approach by commissioning an expert team to thoroughly research and integrate pricing items. This process included nearly 20 symposiums to gather feedback from major tertiary hospitals in provinces like Beijing, Shanghai, Jiangsu, and Zhejiang. After reaching a professional consensus, further input was solicited from relevant departments, local medical insurance bureaus, and medical institutions to ensure the scientific and rational integration of the pricing items.
This approach signifies a deeper involvement of medical institutions in the future price-setting process for medical service items. This emerging trend is not only beneficial for the advancement of medical services but also presents significant opportunities for both medical institutions and manufacturers to leverage.
References:
- 国家医保局重构产科服务价格项目 助力构建生育友好型社会, NHSA, 2024-6-15, https://www.nhsa.gov.cn/art/2024/6/15/art_14_12934.html
- 中国医疗服务价格改革“指南”来了！看医界 2024.06.20, http://www.phirda.com/artilce_35443.html?cId=1&module=trackingCodeGenerator
- 《广东省医疗保障局新增医疗服务价格项目管理办法》, Healthcare Security Administration of Guangdong Province, 2024-4-29, https://hsa.gd.gov.cn/zwgk/content/post_4414969.html
- China's Medical Services Pricing Reform: 3 Core Challenges, NRDL+ Newsletter, 2023-11-8, https://www.nrdlplus.com/chinas-medical-services-pricing-reform-3-core-challenges/
- China's Medical Service Pricing Reform: Current State and Future Development, NRDL+ Newsletter, 2023-11-22, https://www.nrdlplus.com/chinas-medical-service-pricing-reform-current-state-and-future-development/
