GuShiio.com 
Today’s topic is closely related to you. Let’s talk about an important change signal of medical insurance: with the advancement of reform, the domestic medical market is moving towards a “dual track system”. This trend will have a great impact in the future. It will also affect your choice of medical treatment, the purchase of medical insurance, the management of medical expenses, etc.
In today’s issue of Political and Economic Reference, we will focus on three questions: First, what is the “dual track system”? Second, how does the “dual track system” pilot work? Third, what trend signal does it represent?
What is the “dual track system”?
The “dual track system” of medical insurance, one track refers to the increasingly inclusive and widely covered public system, and the other track refers to the higher level but more expensive commercial insurance + self-funded system.
The inclusive and widely covered public system is used for medical insurance. The representative trend is that after ten rounds of medical insurance centralized procurement, the national medical insurance centralized procurement drugs are getting cheaper and cheaper. Of course, there have been more and more discussions recently about the low price but unstable quality of centralized procurement drugs. Many doctors have stood up. The National Medical Insurance Bureau attaches great importance to it and has also listened to relevant feedback and suggestions.
The commercial insurance + self-funded system is used to meet high-end needs. The representative trend is that since last year, the state has allowed foreign investors to set up wholly foreign-owned hospitals in major cities and regions such as Beijing, Shanghai, Guangzhou, Shenzhen and the entire island of Hainan on a trial basis. These are high-level and high-consumption hospitals.
How does the “dual-track system” pilot work?
The domestic medical market is moving towards a “dual-track system”. Another new signal recently is that in addition to being able to use the ordinary medical insurance you pay for reimbursement, high-quality public hospitals have also begun to pilot direct reimbursement with commercial insurance, which means that more expensive drugs and medical services can be paid for with commercial insurance.
Shanghai took the lead in becoming a pilot city. Recently, under the promotion of multiple departments, two insurance companies and 12 public tertiary hospitals in Shanghai have officially implemented a one-stop direct compensation settlement of “medical insurance + commercial insurance”. This means that a patient can complete both national medical insurance reimbursement and commercial insurance reimbursement at the same time in these 12 high-quality hospitals, and the processes of the two are basically the same.
Don’t think it’s just a small change. It’s actually very difficult to promote it. In the past, commercial insurance companies had a strong motivation to knock on the door of public hospitals because the pie was too big; the medical insurance bureau and patients also wanted commercial insurance to enter public hospitals because it could reduce the burden on medical insurance and patients themselves; including public hospitals themselves, they also increasingly realized that commercial insurance could bring more medical needs.
Although all parties are willing, they are faced with practical difficulties: it is difficult for commercial insurance settlement systems to be integrated into hospitals. Why?
First, the level of informatization in many hospitals is not high. It is undoubtedly a greater challenge to build a new commercial insurance settlement system on such a weak “infrastructure”. Secondly, the medical informatization systems of various hospitals often come from different manufacturers, and data sharing is very imperfect. For example, for the same disease, the registration name in this hospital system may be “pulmonary infection”, while in another hospital system it may be “bronchial pneumonia”. The names are different. How to transmit the data?
In addition, there are various account splitting processes, commercial insurance catalog adjustments, claims risk control and other issues.
Therefore, commercial insurance companies can only talk to hospitals one by one, check data, processes and risk control one by one. If a customized system is to be built for each hospital, the “hospitalization cost” of commercial insurance will be as high as hundreds of thousands. If all 38,000 hospitals across the country are to be connected, trillions of yuan is not enough. This cost is too high. For example, since 2009, an insurance company has spent 15 years communicating with hospitals one by one to achieve direct settlement of commercial insurance, but it has always been difficult.
Therefore, after knowing the above difficulties, we can clearly understand the significance behind the one-stop settlement of “commercial insurance + medical insurance” in Shanghai. The government departments in Shanghai are here to be this “powerful pusher”, connect the underlying data, and establish a unified platform so that public hospitals and commercial insurance companies can “directly connect” and “directly pay”.
What trend signal does the “dual track system” represent?
This is certainly a good thing, and we should give a thumbs up to the Shanghai government departments. After giving a thumbs up, as a column discussing political and economic trends, we should also pay attention to the signal significance of this trend, that is, why do we have to carry out this pilot despite all difficulties?
I think the reason behind this is that the situation has reached a point where it must “seek change”:
First, the burden of medical insurance is getting heavier. The growth rate of medical insurance expenditure remains high. Rural medical insurance will only have a surplus of 11.2 billion in 2023. The medical insurance in some cities is even more inadequate and relies heavily on transfer payments. Therefore, it is a general trend to allow commercial insurance to enter public hospitals and share the pressure of medical insurance.
Second, national medical insurance has gradually become an option for “basic protection”. Recently, the tenth round of centralized procurement negotiations for medical insurance continued to bring about a substantial price reduction for drugs and equipment. National medical insurance has gradually transformed into a basic role to ensure that all citizens enjoy “universal” medical care. But at the same time, problems such as “disappearing imported drugs” and “suspected imitation domestic drugs” have also arisen. If some patients want to get better medical services and medical drugs, they must turn to the commercial insurance system.
Third, the growing demand for high-end medical care requires commercial insurance to play a role. Last September, we opened a pilot program for wholly foreign-owned hospitals. These foreign-owned hospitals are expensive, often many times the cost of public hospitals. With such a “high price”, it is difficult for national medical insurance to enter, and the role of commercial insurance has begun to emerge.
At this point, let’s go back to the core trend “dual track system” mentioned at the beginning. Let me give you an example to make an analogy, so that you can better understand its essence. For example, in recent years, we have been working hard to build a “dual track system for real estate” in the real estate field: affordable housing is for security, and the government is vigorously providing a guarantee; commercial housing is for commodities, and the price is determined by the market, and everyone takes what they need.
In the medical field, in fact, it is increasingly found that the country is also working hard to build a “dual track system for medical care”:
The basic national medical insurance plate targets all public hospitals and a large number of sinking medical institutions, so that the whole people can enjoy universal and low-cost medical services and everyone can see a doctor. Commercial insurance guarantees personalized needs, and targets foreign-funded hospitals, private hospitals and some high-quality public hospitals, so that patients can enjoy better medical services and use better imported special medicines. One track is the medical business, and the other track is the medical industrialization. The two meet different needs, develop in coordination, and build a multi-level medical insurance system.
Shanghai, mentioned earlier, is the most developed city in China. It is not only one of the pilot areas for wholly foreign-owned hospitals, but also the core driving area for the “medical insurance + commercial insurance” settlement. If Shanghai succeeds, it can be effectively copied and pasted in various cities later. I think this is also the intention of the country.
Of course, the changes in the “dual track system” of medical care also remind us to make more plans for our future medical insurance. For example, the coverage of national medical insurance will become wider and cheaper. However, I remind you that medical insurance may only provide basic models, not high-end models. In the face of your higher needs, it may not be enough. Anyway, the trend and reality are already like this, so you can consider whether to purchase commercial medical insurance, and whether it is necessary to save some funds for medical expenses in advance, etc. This is also an important reminder in this class.
