To control the rising healthcare cost, on Feb 9, China State Council released a list of 130 diseases recommended for inclusion in Diagnosis-Related Groups (DRGs) for health insurance payments. The DRG is based on a predetermined payment system, of a disease type, regardless of all the services provided to cure the patient. About 70% of provinces in China have implemented the new reimbursement policy and over 100 groups of ailments and diseases have been classified for local government.
The loss of revenue is to be shared by medical device manufacturers, distributors and healthcare providers. On the other hand, the demand for quality medical devices and the increasing need for IVDs will be on the rise and making up for some of the revenue losses.
The new reimbursement system, while providing better healthcare outcome, will put financial pressure on healthcare providers. Public hospitals in particular are under tremendous pressure to provide better care, upgrade their medical devices for more efficiency, and decrease impatient hospitalization stays. Additionally, public hospitals face increasing competition from private hospitals that are viewed as better care providers. All these factors will push public hospital leaderships to rapidly phase out medical devices and IVDs with lower quality and productivity.
With strong government support and robust influx of private capital these two areas are experiencing rapid growth: IVDs in hema-diagnostics and cancer screening. Additionally, one could expect stand-alone third-party testing centers to enter the space.
For English translation for the document and more reimbursement changes, please email info@ChinaMedDevice.com
China Med Device, LLC provides turn-key solutions for western medical device/IVD companies to enter China with regulation and commercialization services. We have an office in Beijing, Suzhou and Boston. www.ChinaMedDevice.com
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Grace Fu Palma
China Med Device, LLC
MA, U.S.
gpalma@chinameddevice.com978-390-4453
www.chinameddevice.com------------------------------