Lei Jufang: The “drug-to-total-cost ratio” assessment is too mechanical; a prescription review mechanism could be established instead.

　　The “Guiding Opinions on the Pilot Comprehensive Reform of Public Hospitals in Cities,” issued by the General Office of the State Council on May 17, 2015, proposed further expanding the pilot program for comprehensive reform of public hospitals in cities in 2015, with the goal of reducing the proportion of drug costs in these hospitals to around 30% overall by 2017. As a result, “drug cost ratio” has become a hot topic in the current healthcare reform, and health administrative departments across various regions have adopted it as an important indicator for evaluating hospital performance.

　　Since the implementation of the drug-to-total-revenue ratio indicator control, discussions among medical institutions almost invariably revolve around this very ratio. Localities have adopted fairly stringent measures to enforce drug-to-total-revenue ratio controls. However, further surveys reveal that the issue of high medical costs for the public remains unresolved. On the contrary, the drawbacks of the drug-to-total-revenue ratio indicator are gradually coming to light—and have even evolved into policy factors that exacerbate conflicts in medical treatment.

　　In some regions, local health authorities have been enforcing policies in a heavy-handed manner, treating general hospitals and psychiatric specialized hospitals alike. The diagnosis and treatment of mental disorders rely primarily on scale-based assessments and pharmacological therapies; as a result, examination costs are relatively low, and medications constitute the major expense for psychiatric specialized hospitals. The assessment of drug cost ratios will likely prompt patients undergoing outpatient treatment to switch to cheaper, less effective drugs with more severe adverse reactions, potentially even putting them at risk of having their treatment interrupted.

　　Some hospitals, in their ongoing efforts to reduce the proportion of drug-related expenses, have adopted various measures to increase non-drug revenue from medical services and other sources. At the same time, they have established a series of targeted management systems covering drug procurement, drug information disclosure, dynamic drug monitoring, and tiered management of antimicrobial agents. They have implemented comprehensive management strategies and signed responsibility agreements with heads of all clinical departments to ensure integrated control over the drug expenditure ratio. Hospitals have introduced performance assessment mechanisms for controlling the drug expenditure ratio, setting specific targets for each department—for instance, the surgical system is set at 40%, internal medicine at 45%, and departments such as oncology and infectious diseases—where drug therapy plays a dominant role—are set at 50%. The baseline drug usage ratios for each clinical department are assessed monthly, and the drug expenditure ratio is linked to performance-based incentives. For departments that exceed their baseline drug expenditure targets, their performance bonuses will be reduced by double the amount of the excess; for every 1% by which the drug expenditure ratio exceeds the target, 2% of the department’s performance bonus will be deducted. Additionally, physicians who fail to comply with the prescribed drug usage guidelines under the medical insurance regulations—and whose failure results in penalties imposed on the hospital—will have an equivalent amount directly deducted from their personal performance bonuses.

　　Without strengthening the assessment of the appropriateness of diagnosis and treatment, and without reforming the medical insurance payment system, merely mechanically monitoring the proportion of drug costs will only harm patients and put medical professionals in a dilemma. The proportion of drug costs should serve merely as one among many evaluation indicators and must never be imposed forcibly. Given that patients’ conditions differ, departments vary, and disease types are distinct, how could the proportion of drug costs possibly remain the same? A simple logical analysis reveals that if we want to reduce the proportion of drug costs, we must either decrease the numerator or increase the denominator. Reducing the numerator means refraining from prescribing medications that shouldn’t be prescribed in the first place—this approach is indeed correct. However, it also means that we might choose not to prescribe even clinically necessary, high-value drugs. On the other hand, increasing the denominator by raising the costs of tests and examinations—such as CT scans and MRIs—can lead to situations where hospitals of Grade III in the same city refuse to recognize each other’s imaging results. The root cause of this issue lies precisely in these kinds of policies.

　　In light of this, we believe that controlling the proportion of drug costs cannot fundamentally address the issues of healthcare supply inducing demand and the challenge of controlling medical expenses. On the contrary, such controls can distort hospital behavior, leaving patients worse off the more tightly they are “regulated.” Not only is this approach not worth promoting, but it also calls for a deeper reflection and adjustment.

　　First, the drug-to-total-cost ratio is a macro-level requirement for hospitals. It is recommended that health authorities introduce policies to treat different diseases differently based on their specific characteristics. We should explore excluding certain special diseases—such as mental illnesses—as well as chronic conditions like hypertension and diabetes—from the assessment of the drug-to-total-cost ratio.

　　Second, it is recommended to shift from controlling the “proportion of pharmaceuticals” to implementing a “prescription review system.” For instance, we could establish a provincial-level platform for prescription review, assemble a team of expert reviewers, and upload all prescriptions from public hospitals, conducting random spot checks and reviews. This approach would exert an invisible deterrent effect on practices such as excessive prescribing, duplicate prescriptions, and the overuse of ancillary medications, thereby ensuring the rationality of prescriptions.

　　(Lei Jufang, Member of the National Committee of the Chinese People's Political Consultative Conference and Chairperson of Qizheng Tibetan Medicine)

　　Reporting media: NetEase Finance

　　Report link: http://money.163.com/17/0303/14/CEK3FT6A00258IDE.html