China: Healthier People, Healthier Economy, p.13

..."What we're seeing with the new plan is a move back to a more socialist approach to medicine by providing for the majority," said Pollard.

If successful, the sick will not be the only beneficiaries: the economy as a whole could undergo a fundamental change, and several business sectors--drug companies, medical equipment manufacturers and insurance companies--will all be affected....

The other main problem with the healthcare delivery system is that it is not always working in the interest of patients. Government funding for hospitals has gradually diminished, while at the same time the state imposes price control on many services. The result is that hospitals often over-prescribe drugs, or sell expensive patented drugs with a high mark-up. The hospital benefits financially from this because not only do they prescribe the drugs, they dispense them too. Hospitals in China make around 60% of their revenues from prescribing drugs, compared to the 10% to 20% that is typical in Western countries. In the draft guidelines, released last year, there were plans to separate the prescribing and dispensing of drugs. But in the final document these were only introduced as a pilot plan, suggesting that the government has decided not to tackle the hospital inefficiencies head on, but indirectly through improvements in the financing of treatment....