Abstract
BackgroundHealthcare system reform of Sanming city has become a leading healthcare reform model in China. It has developed a rigorous pharmaceutical reform consisted of the Zero Mark-up Drug Policy and the Centralized Procurement of Medicine Policy to bring down drug expenses and total health expenditures. However, despite the credit and much attention have been given to Sanming’s pharmaceutical reform, its impact still remains unclear. Therefore, the purpose of this study was to explore the impact of the pharmaceutical reform of Sanming on both drug and total health expenditures.MethodsInterrupted time series analysis with three segments divided by two intervention points was employed to evaluate the impact of the pharmaceutical reform. Segment 1 was the pre-reform period which captured the baseline information. Segment 2 occurred after the first intervention point when the Zero Mark-up Drug Policy was implemented, whereas Segment 3 was after the implementation of the Centralized Procurement of Medicine Policy. Primary outcomes are outpatient drug expenditure, outpatient total health expenditure, inpatient drug expenditure, and inpatient total health expenditure. Data spanning from May 2012 to May 2014 are included.ResultsBoth drug and total health expenditures exhibited rising trends before any policy was carried out. The launch of Zero Mark-up Drug Policy led to significant instant reductions in levels of outpatient drug expenditure (coefficient = -6,602.99, p<0.01), outpatient total health expenditure (coefficient = -9,958.58, p<0.05), inpatient drug expenditure (coefficient = -7,520.90, p<0.01), and inpatient total health expenditure (coefficient = -16,737, p<0.01). Moreover, the previous upward trends were changed into downward trends for inpatient drug expenditure (coefficient = -2,747.02, p = 0.00) and total health expenditure (coefficient = -3,069.29, p = 0.12). However, after the implementation of Centralized Procurement of Medicine Policy, we observed no significant instant level changes and also, the inpatient drug expenditure (coefficient = 372.95, p = 0.01) and total health expenditure (coefficient = 788.76, p = 0.06) resumed upward trends again.ConclusionsAlthough the pharmaceutical reform could control or reduced drug expenditure and total health expenditure in short term, expenditures gradually resumed growing again and reached or even exceeded their baseline levels of pre-reform period, indicating the effect became weakened or even faded out in long term. In all, the pharmaceutical reform as a whole failed to meet its goal of combating sharp growth of drug and total health expenditure.
Highlights
The astronomical growth of drug expenditures as well as the resulting increase of total health expenditures has imposed great burdens to patients and become a major concern in China government’s mind
The pharmaceutical reform as a whole failed to meet its goal of combating sharp growth of drug and total health expenditure
Public hospitals own by China’s governments are funded through a variety of channels, which can be broadly categorized into three groups namely, government subsidy, drug revenue, and medical service fees [1]
Summary
The astronomical growth of drug expenditures as well as the resulting increase of total health expenditures has imposed great burdens to patients and become a major concern in China government’s mind. Facing drug markup of 15% and driven by financial incentives, physicians tend to prescribe expensive drugs or overprescribe unnecessary drugs to patients in order to gain profits [4] and made drug revenue a major funding source for public hospitals. In order to combat sharp growth of total health expenditure, China’s central government decided to cut off the profit chain between health providers and pharmaceuticals by eliminating the drug markups. Healthcare system reform of Sanming city has become a leading healthcare reform model in China It has developed a rigorous pharmaceutical reform consisted of the Zero Mark-up Drug Policy and the Centralized Procurement of Medicine Policy to bring down drug expenses and total health expenditures. The purpose of this study was to explore the impact of the pharmaceutical reform of Sanming on both drug and total health expenditures
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