HEALTHYCHINARegionPacificWesternOrganizationWorld HealthDEEPENING HEALTH REFORM IN CHINABuilding High-Quality and Value-Based Service DeliveryThe World Bank andWorld Health OrganizationHEALTHYCHINAPart TitleHealthy ChinaPart TitleHealthy China: Deepening Health Reform in ChinaBuilding High-Quality and Value-Based Service DeliveryA copublication of the World Bank and the World Health Organization© 2019 International Bank for Reconstruction and Development / The World Bank and World Health Organization 1818 H Street NW, Washington, DC 20433Telephone: 202-473-1000; Internet: worldbankSome rights reserved1 2 3 4 22 21 20 19The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent, or those of WHO. The World Bank and WHO do not guarantee the accuracy of the data included in this work. 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Examples of components can include, but are not limited to, tables, figures, or images.All queries on rights and licenses should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; e-mail: pubrightsworldbank.ISBN (paper): 978-1-4648-1263-7ISBN (electronic): 978-1-4648-1323-8DOI: 10.1596/978-1-4648-1263-7Cover design: Debra Naylor, Naylor Design, Washington, DC Library of Congress Cataloging-in-Publication Data has been requested.HEALTHY CHINA vContentsPreface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xiiiAcknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvAbbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xixExecutive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Chinas Health System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1Report Background and Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5The Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6Implementation of Health Care Reforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17Chinas Road to Health Care Reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17Report Objectives and Audience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20Report Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .241 Impressive Gains, Looming Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25Chinas Changing Health Care Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Health System Reform in China: A Brief Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30Meeting Chinas Health Care Needs: Key Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35Impact of Selected Policy Changes on Health Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . .45Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .502 Lever 1: Shaping Tiered Health Care Delivery with People-Centered Integrated Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55The People-Centered Integrated Care (PCIC) Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55Benefits of Adopting PCIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56vi HEALTHY CHINA: DEEPENING HEALTH REFORM IN CHINAChallenges to PCIC Implementation in China .57Core Action Areas and Implementation Strategies .61Moving Forward on the PCIC Core Action Areas .83Annex 2A Summary of PCIC Impact Findings by Case Studies .84Annex 2B Methodology and Summaries of 22 PCIC Performance Improvement Initiatives Described in the Case Studies .85Annex 2C Characteristics of Care Integration Initiatives Involving Hospitals .88Notes .89References .903 Lever 2: Improving Quality of Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97Introduction .97Conceptualizing, Assessing, and Improving the Quality of Care .99QoC Challenges in China .101Chinas Health Care Regulatory and Policy Environment .104International Experience in Improving Health System Quality .107Recommendations to China for Improving the Quality of Care .114Conclusion .124Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124References .1254 Lever 3: Engaging Citizens in Support of the PCIC Model . . . . . . . . . . . .131Introduction .131Challenges to Engaging Citizens .133Two Routes to Engage People to Improve Health Outcomes and Restore Trust .134Recommendations: Strengthening Patient Engagement in the Patient-Provider Relationship .138Notes .155References .1555 Lever 4: Reforming Public Hospital Governance and Management . .161Introduction .161Overview and Trends .162Public Hospital Governance: Challenges and Lessons from Reform in China and Internationally .164Hospital Managerial Practices: Challenges and Lessons from China and Internationally .179Recommendations for Moving Forward with Public Hospital Reform .185Notes .194References .1966 Lever 5: Realigning Incentives in Purchasing and Provider Payment . . . . 203Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203Evolution of Health System Incentives .204Challenges and Lessons Learned From Selected Case Studies .208Provider Payment Reforms in China: Lessons From Recent Pilots .212CONTENTs viiCore Action Areas and Implementation Strategies to Realign Incentives .217Notes .231References .2317 Lever 6: Strengthening the Health Workforce . . . . . . . . . . . . . . . . . . . . . .235Introduction .235The Chinese Health Labor Market: Trends and Challenges .236Recommendations for Human Resources Reform .246An Implementation Road Map .262Annex 7A Supplementary Tables .266Notes .275References .2768 Lever 7: Strengthening Private Sector Engagement in Health Service Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279Introduction .279Evolution of Policies on the Private Health Sector .280Scope and Growth of Chinas Private Health Sector .283Key Challenges .289Recommendations for Strengthening Private Sector Engagement .295Annex 8A Supplementary Tables .309Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315References .3169 Lever 8: Modernizing Health Service Planning to Guide Investment . . . 319Introduction .319Capital Investment Challenges in Chinas Health Sector .320Recommendations to Modernize Service Planning .327Notes .342References .34210 Strengthening the Implementation of Health Service Delivery Reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .345Introduction .345Implementation Challenges .346A Four-Part Actionable Implementation Framework .348Moving Forward: Effective, Sustainable Local Implementation .350Toward a Sequential Plan for Full-Scale Reform Implementation in China .362Annex 10A Case Examples of Transformation Learning Collaboratives (TLCs) .366Annex 10B Plan-Do-Study-Act Cycles of Change .369Annex 10C Example of a Detailed Implementation Pathway .371Notes .377References .377A Supplementary Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .381viii HEALTHY CHINA: DEEPENING HEALTH REFORM IN CHINABoxesI.1 What is value in health care? .18I.2 Communist Party of Chinas endorsement of “Healthy China” strategy .192.1 People-centered integrated care (PCIC) defined .562.2 Potential benefits of people-centered integrated care .583.1 Institutional arrangements for quality improvement in France, Germany, and the Netherlands .1073.2 The Ambulatory Care Project of the National Quality Forum .1093.3 U.K. National Health Service outcomes indicator set, 2013/14 .1113.4 An innovative U.K. model to improve care for stroke patients .1124.1 Understanding citizen mistrust: Perspectives from patients and providers .1354.2 Defining empowerment, engagement, and coproduction of health