The State Council General Office issued a directive promoting the comprehensive reform of public hospitals in cities on May 17.
The profit-driven model of public hospitals is to be scrapped and the government's oversight and management strengthened to ensure they provide for the public good and reduce residents' medical expenditure.
More cities will be included in the pilot reform this year and by 2017 the reform should be promoted across the nation to boost hospitals' effective management.
While strengthening the role of government as sponsor and supervisor, facilities are encouraged to have more autonomy in personnel appointments and operation.
The current mechanism whereby doctors can increase personal and hospitals' income by prescribing more medicines must be abolished and efforts made to ensure services are properly priced.
The situation where most residents flock to a small number of well-equipped major hospitals for treatment needs to be improved. Authorities will ensure the optimal distribution of medical resources.
Medical insurance is encouraged to play a bigger role in effectively reducing public medical costs. The insurance should cover most of the medical expenditure, while the private bills paid by each patient should be lower than 30 percent by 2017.