2006 Winner
Winners:
Qian'an City, Hebei Province
2006
Publication:
Innovations and Excellence in Local Chinese Governance
Sponsored By:
Innovations and Excellence in Local Chinese Governance
Jurisdiction:
China
In a sweeping approach to rural medical care performance, in March 2003, Qian’an City in Hebei Province, became one of the experimental centers for a new type of rural cooperative medical care institution. Qian’an instituted a public fund to reimburse its agricultural laborers for their medical expenses. By 2004, over 542,625 rural residents had enrolled in the program, including approximately 95% of the agricultural population. As a cooperative, this shared fund depends on contributions collected by villagers themselves; the money they raised was matched by subsidies from different levels of government, totaling 18,980,000 yuan (about U.S. $2.44 million).
 
This cooperative medical care initiative depends on three principles: first, funds are collected uniformly by city. Second, individual payments must be matched by government support. Third, the entire cost of treatments for serious illness must be covered by the cooperative fund. It is the responsibility of each household to contribute 15 yuan (about U.S. $2) per member. For extremely poor households, the Department of Civil Affairs will subsidize their contributions.
 
On the public sector side, the total medical fund subsidy per rural resident is 20 yuan. The central federal government is responsible for contributing 10 yuan per rural resident enrolled in the program, to be matched by another 10 yuan from the provincial, city, and county governments in which these residents live. The minimum repayment for medical expenses incurred by patients enrolled in the fund is 500 yuan (U.S. $65); the maximum medical expenditure that will be reimbursed by the state is between 10,000 (U.S. $1,292) and 12,000 (U.S. $1,550) yuan annually. For less serious treatments, the total proportion of bills to be repaid will be 40%.
 
To surpass other cities initiating similar projects, Qian’an instituted its own innovations on this rural cooperative medical fund structure. According to the provincial government, villagers must receive their reimbursements in up to 15 days. However, Qian’an began a policy of immediate repayment to allay concerns that being repaid from the fund would be a lengthy, arduous process. Villagers who go to hospitals within Qian’an can receive their reimbursements from the cashier’s office at the hospital immediately after checking out. For rural residents who must go to hospitals outside Qian’an, they may bring their bills to the Office of Cooperative Medical Care in their hometowns; the office is responsible for handling the rest of the claims procedure.
 
To further expedite Qian’an’s medical claims process, the city invested in a computer management system, which connects 14 designated hospitals and 19 town management centers through the Internet. This software standardizes claims procedures and cuts down on the number of personnel needed to process bills submitted.
 
Rural residents enrolled in this fund are accorded three rights: they have the right to choose freely amongst the 14 Qian’an designated hospitals when seeking care; when seeking care outside of Qian’an, they may visit any hospital of an approved class and still receive reimbursement for some of their treatment. Participants in the fund also have the right to be informed of medical care pricing at any hospital in Qian’an up front; Qian’an’s 14 designated hospitals must publicize the medicines they have available and the cost of the services they provide. Third, residents have the right to decide their own regimens for care. If a doctor recommends a course of treatment that is unusually expensive, she must first receive approval from her patient before proceeding.
 
To ensure citizen supervision of the fund, Qian’an has regulated that the amount of money collected and the total reimbursements issued from the fund must be posted on bulletin boards of all towns, villages, and hospitals under the fund’s jurisdiction. Additionally, the Hebei provincial government has designated a Supervision Committee responsible for delegating the accounts of the fund at the end of each year to an auditing body at a higher level of government to be fully examined and approved. The fund’s managers are also closely scrutinized: at the local level, the Office of Cooperative Medical Care is overseen by the City Management Center, which, in turn, is examined by the provincial Finance Department. All three levels of government must examine transfers of money to and from the fund to ascertain the legality and fairness of each transaction.
 
The fund has effectively alleviated the burdens of expensive medical care on impoverished rural residents in Qian’an: by the end of 2004, 374,000 rural citizens received repayments totaling 15,896,000 yuan (U.S. $2.05 million). The Department of Civil Affairs has completely subsidized the treatment of 10,026 destitute villagers, veterans, widows, and senior citizens. By constructing village level health service offices, the initiative has also improved the quality of care available to rural residents: by the end of 2004, 80% of the villages in Qian’an had standard clinics. This wide-ranging public assistance program has improved general relations between local residents and the Qian’an municipal government, and has increased citizen supervision over the finances relating to their medical care.