The National Health Commission has recently held a conference, involving county-level healthcare, breakthroughs in high-end devices, volume-based procurement and more.
01
Promoting the construction of clinical specialties
These devices being the content of focus
The National Health Commission held a press conference today (October 19) to present the situation of the reform and high-quality development of public hospitals and answer questions from the media.
At the conference, Xue Haining, Deputy Director of the Department of Healthcare Reform, National Health Commission, talked about various measures launched to promote the high-quality development of public hospitals since the deepening of medical reform, many of which are directly linked to the medical device industry.
The conference pointed out that it’s important to advance the building of national medical centers and national and provincial regional medical centers, and adopt measures such as expert support, technology shift and homogeneous management to address localities’ shortcomings and weaknesses in key diseases and key specialties such as oncology and pediatrics.
Li Dachuan, Deputy Director of the Department of Medical Administration, National Health Commission, mentioned at the press conference of the National Health Commission in April this year that by the end of last year, the central government had cumulatively invested RMB 2.54 billion to support 508 national key clinical specialty construction projects in the country.
Furthermore, 102 national key clinical specialty construction projects have been independently applied for by national medical centers and national regional medical centers established by hospitals under (managed by) the National Health Commission with self-raised funds. In the meantime, local governments have proactively invested more than RMB 7 billion in total to support 4,652 provincial key clinical specialty construction projects and 10,631 municipal (county) key clinical specialty construction projects.
Although objective differences currently exist in medical resources in different regions of China, the gap is expected to narrow as the high-quality development of public hospitals progresses. At the same time, the medical device market will be comprehensively expanded, and a large number of products will have new opportunities for sales increase.
02
Continuous sales increases in the county-level device market
Xue Haining stated at the conference that it’s important to improve the medical and health service capabilities at the primary level, orderly promote the construction of urban medical groups and county medical communities, accelerate the implementation of the “1000 County Hospital Development Program” and strengthen rural and community medical and health institutions.
At the prefectural level, the National Health Commission, together with the Ministry of Finance, has determined 30 cities in two batches to implement demonstration projects for the reform and high-quality development of public hospitals; at the hospital level, they have chosen 14 large-scale high-level public hospitals to conduct the high-quality development pilot program.
Xue Haining stated that the hospitalization proportion within the counties of the first batch of demonstration cities increased from an average of 72.9% to 76.1% in 2022, and the proportion of public hospitals participating in the mutual recognition of same-level inspection results also increased from an average of 83.3% to 92.3%.
The county market has experienced a rapid explosion during the high-quality development process of public hospitals. According to the “1000 County Hospital Development Program” to Improve Comprehensive Capacity of County Hospitals (2021-2025), at least 1,000 county hospitals in China will reach the medical service capability level of tertiary hospitals by 2025. In April last year, the General Office of the National Health Commission issued the List of County Hospitals Included in the “1000 County Hospital Development Program” to Improve Comprehensive Capacity of County Hospitals, with 1,233 county hospitals included.
In August this year, the National Health Commission released the recommended health industry standard, the Standard for Equipment Configuration in County General Hospitals, which will come into effect from January 1, 2024.
The standard applies to county general hospitals with beds of no more than 1,500, aims to standardize the equipment configuration of county general hospitals and stipulates the basic principles of equipment configuration of RMB 10,000 and above. The configuration standard covers respiratory medicine, endocrinology, gastroenterology, neurosurgery, obstetrics and gynecology, pediatrics and ophthalmology and involves a large number of medical devices such as ventilators, high-frequency electric knives, defibrillators and electrocardiographs.
According to the Ministry of Finance’s Report on the Execution of the Central and Local Budgets for 2022 and on the Draft Central and Local Budgets for 2023, support will be given to improve medical and health service capabilities in 2023, and fiscal capacity subsidies of RMB 170 billion will be arranged through general transfer payments and funds of RMB 30 billion carried over on the accrual basis of accounting from 2022 will be used to support localities in doing a good job in epidemic prevention and control, etc., which shows a focus on counties financially.
The county medical market has been fully activated through the above measures.
03
Driving breakthroughs in high-end devices
According to iiMedia Research and data from the Blue Book of Medical Device Industry in China, China has become the world’s second-largest medical device market and is growing at a rate of about 10% per year. The market size of China’s medical device industry is estimated to reach RMB 1.8414 trillion by 2025.
With such a huge size, more and more domestic enterprises have chosen to enter the high-end device field, and the high-quality development of public hospitals will provide an impetus for industrial upgrading.
At the conference, Li Weimin, President of West China Hospital, Sichuan University, presented the latest progress in high-tech innovation of West China Hospital as a pilot hospital for high-quality development.
According to Li Weimin, West China Hospital has transformed more than 200 sci-tech achievements in the past five years, with the total transformation contract amount exceeding RMB 1 billion. In terms of modern diagnosis and treatment equipment, West China Hospital focuses on researching high-end electronic biochip technology to solve the bottleneck in the core technology for molecular diagnosis, and the hospital also works to tackle the bottleneck in the technology of proton and heavy ion treatment equipment to realize the localization of high-end equipment.
In terms of high-end biomaterials, West China Hospital has solved the bottleneck in interventional biological aortic valves by developing the world’s first fully-released, retrievable interventional biological aortic valve and broken the monopoly by imported devices in China’s high-end implantable medical device market by mass-producing domestically developed multiple biological tissue products.
In terms of minimally invasive surgical techniques, West China Hospital has developed a minimally invasive interventional technique for senile valvular heart disease which has a high incidence rate and great harm and seriously affects the quality of life and lifespan of the elderly, to solve the problem that patients cannot tolerate traditional thoracotomy.
Li Weimin stated that West China Hospital has set up a discipline development fund to invest nearly RMB 500 million every year to support the clinical and translational research on innovative drugs, innovative devices and innovative diagnostic and treatment protocols, and has established a transformation incentive mechanism and introduced the “Nine Measures of West China Hospital to Stimulate Transformation”, to encourage medical staff and sci-tech personnel to transform their innovation into achievements for application. According to the measures, 80% to 90% of rewards for the achievements will be given to the corresponding teams, to stimulate the endogenous power of the science researchers to conduct such transformation.
The reputation of domestically developed high-end equipment has steadily improved in recent years largely because of their introduction and use by top hospitals such as Peking Union Medical College Hospital and West China Hospital. The industry-academia-hospital integration will promote more first-line clinical needs to align with more industrial R&D needs and more innovation achievements known to clinical practitioners, thereby developing new markets.
04
Continuously advancing the quality improvement and scope expansion of centralized procurement
Xue Haining stated that in recent years, China has organized and conducted centralized volume-based procurement of drugs, negotiations on prices of drugs included in the National Reimbursement Drug List and other actions, to largely reduce the prices of drugs and consumables and alleviate the burden of medical expenses on the public.
The centralized procurement of consumables has been ongoing for four years from 2019 to 2023, with the covered categories continuing to expand. In September this year, the National Healthcare Security Administration held a regular press conference for the second half of 2023, during which, Wang Guodong, Deputy Director of the Department of Drug Pricing, Bidding and Procurement, National Healthcare Security Administration, responded to questions regarding the “implementation of the centralized procurement of the eighth batch of drugs and the third batch of high-value medical consumables”.
Wang Guodong stated that in terms of centralized procurement of consumables, those selected in the centralized procurement of the third batch of high-value medical consumables organized by the state have been purchased nationwide in May, including 14 product system categories which cover five orthopedic spine consumables for cervical fixation and fusion surgery, thoracolumbar fixation and fusion surgery, vertebroplasty, endoscopic discectomy, and artificial cervical disc replacement surgery. The selected products have an average price reduction of 84%, which is estimated to save RMB 26 billion every year.
The centralized volume-based procurement work of the fourth batch of high-value medical consumables organized by the state is being promoted simultaneously, with medical consumables for the two categories of intraocular lenses and sports medicine to be included. Next, the National Healthcare Security Administration will continue to advance the quality improvement and scope expansion of centralized volume-based procurement of medical products, adhere to the linkage of and joint advancement by the state and localities, strengthen fine management of the centralized procurement execution process and truly let price reduction effects benefit patients.
Reform of public hospitals is regarded as the barometer of the development of the medical device industry and can directly affect the allocation and sales increase of relevant equipment and consumables. Driven by the goal of high-quality development, the medical device market will brim with new vitality.
Source: Saibailan Devices
01
Promoting the construction of clinical specialties
These devices being the content of focus
The National Health Commission held a press conference today (October 19) to present the situation of the reform and high-quality development of public hospitals and answer questions from the media.
At the conference, Xue Haining, Deputy Director of the Department of Healthcare Reform, National Health Commission, talked about various measures launched to promote the high-quality development of public hospitals since the deepening of medical reform, many of which are directly linked to the medical device industry.
The conference pointed out that it’s important to advance the building of national medical centers and national and provincial regional medical centers, and adopt measures such as expert support, technology shift and homogeneous management to address localities’ shortcomings and weaknesses in key diseases and key specialties such as oncology and pediatrics.
Li Dachuan, Deputy Director of the Department of Medical Administration, National Health Commission, mentioned at the press conference of the National Health Commission in April this year that by the end of last year, the central government had cumulatively invested RMB 2.54 billion to support 508 national key clinical specialty construction projects in the country.
Furthermore, 102 national key clinical specialty construction projects have been independently applied for by national medical centers and national regional medical centers established by hospitals under (managed by) the National Health Commission with self-raised funds. In the meantime, local governments have proactively invested more than RMB 7 billion in total to support 4,652 provincial key clinical specialty construction projects and 10,631 municipal (county) key clinical specialty construction projects.
Although objective differences currently exist in medical resources in different regions of China, the gap is expected to narrow as the high-quality development of public hospitals progresses. At the same time, the medical device market will be comprehensively expanded, and a large number of products will have new opportunities for sales increase.
02
Continuous sales increases in the county-level device market
Xue Haining stated at the conference that it’s important to improve the medical and health service capabilities at the primary level, orderly promote the construction of urban medical groups and county medical communities, accelerate the implementation of the “1000 County Hospital Development Program” and strengthen rural and community medical and health institutions.
At the prefectural level, the National Health Commission, together with the Ministry of Finance, has determined 30 cities in two batches to implement demonstration projects for the reform and high-quality development of public hospitals; at the hospital level, they have chosen 14 large-scale high-level public hospitals to conduct the high-quality development pilot program.
Xue Haining stated that the hospitalization proportion within the counties of the first batch of demonstration cities increased from an average of 72.9% to 76.1% in 2022, and the proportion of public hospitals participating in the mutual recognition of same-level inspection results also increased from an average of 83.3% to 92.3%.
The county market has experienced a rapid explosion during the high-quality development process of public hospitals. According to the “1000 County Hospital Development Program” to Improve Comprehensive Capacity of County Hospitals (2021-2025), at least 1,000 county hospitals in China will reach the medical service capability level of tertiary hospitals by 2025. In April last year, the General Office of the National Health Commission issued the List of County Hospitals Included in the “1000 County Hospital Development Program” to Improve Comprehensive Capacity of County Hospitals, with 1,233 county hospitals included.
In August this year, the National Health Commission released the recommended health industry standard, the Standard for Equipment Configuration in County General Hospitals, which will come into effect from January 1, 2024.
The standard applies to county general hospitals with beds of no more than 1,500, aims to standardize the equipment configuration of county general hospitals and stipulates the basic principles of equipment configuration of RMB 10,000 and above. The configuration standard covers respiratory medicine, endocrinology, gastroenterology, neurosurgery, obstetrics and gynecology, pediatrics and ophthalmology and involves a large number of medical devices such as ventilators, high-frequency electric knives, defibrillators and electrocardiographs.
According to the Ministry of Finance’s Report on the Execution of the Central and Local Budgets for 2022 and on the Draft Central and Local Budgets for 2023, support will be given to improve medical and health service capabilities in 2023, and fiscal capacity subsidies of RMB 170 billion will be arranged through general transfer payments and funds of RMB 30 billion carried over on the accrual basis of accounting from 2022 will be used to support localities in doing a good job in epidemic prevention and control, etc., which shows a focus on counties financially.
The county medical market has been fully activated through the above measures.
03
Driving breakthroughs in high-end devices
According to iiMedia Research and data from the Blue Book of Medical Device Industry in China, China has become the world’s second-largest medical device market and is growing at a rate of about 10% per year. The market size of China’s medical device industry is estimated to reach RMB 1.8414 trillion by 2025.
With such a huge size, more and more domestic enterprises have chosen to enter the high-end device field, and the high-quality development of public hospitals will provide an impetus for industrial upgrading.
At the conference, Li Weimin, President of West China Hospital, Sichuan University, presented the latest progress in high-tech innovation of West China Hospital as a pilot hospital for high-quality development.
According to Li Weimin, West China Hospital has transformed more than 200 sci-tech achievements in the past five years, with the total transformation contract amount exceeding RMB 1 billion. In terms of modern diagnosis and treatment equipment, West China Hospital focuses on researching high-end electronic biochip technology to solve the bottleneck in the core technology for molecular diagnosis, and the hospital also works to tackle the bottleneck in the technology of proton and heavy ion treatment equipment to realize the localization of high-end equipment.
In terms of high-end biomaterials, West China Hospital has solved the bottleneck in interventional biological aortic valves by developing the world’s first fully-released, retrievable interventional biological aortic valve and broken the monopoly by imported devices in China’s high-end implantable medical device market by mass-producing domestically developed multiple biological tissue products.
In terms of minimally invasive surgical techniques, West China Hospital has developed a minimally invasive interventional technique for senile valvular heart disease which has a high incidence rate and great harm and seriously affects the quality of life and lifespan of the elderly, to solve the problem that patients cannot tolerate traditional thoracotomy.
Li Weimin stated that West China Hospital has set up a discipline development fund to invest nearly RMB 500 million every year to support the clinical and translational research on innovative drugs, innovative devices and innovative diagnostic and treatment protocols, and has established a transformation incentive mechanism and introduced the “Nine Measures of West China Hospital to Stimulate Transformation”, to encourage medical staff and sci-tech personnel to transform their innovation into achievements for application. According to the measures, 80% to 90% of rewards for the achievements will be given to the corresponding teams, to stimulate the endogenous power of the science researchers to conduct such transformation.
The reputation of domestically developed high-end equipment has steadily improved in recent years largely because of their introduction and use by top hospitals such as Peking Union Medical College Hospital and West China Hospital. The industry-academia-hospital integration will promote more first-line clinical needs to align with more industrial R&D needs and more innovation achievements known to clinical practitioners, thereby developing new markets.
04
Continuously advancing the quality improvement and scope expansion of centralized procurement
Xue Haining stated that in recent years, China has organized and conducted centralized volume-based procurement of drugs, negotiations on prices of drugs included in the National Reimbursement Drug List and other actions, to largely reduce the prices of drugs and consumables and alleviate the burden of medical expenses on the public.
The centralized procurement of consumables has been ongoing for four years from 2019 to 2023, with the covered categories continuing to expand. In September this year, the National Healthcare Security Administration held a regular press conference for the second half of 2023, during which, Wang Guodong, Deputy Director of the Department of Drug Pricing, Bidding and Procurement, National Healthcare Security Administration, responded to questions regarding the “implementation of the centralized procurement of the eighth batch of drugs and the third batch of high-value medical consumables”.
Wang Guodong stated that in terms of centralized procurement of consumables, those selected in the centralized procurement of the third batch of high-value medical consumables organized by the state have been purchased nationwide in May, including 14 product system categories which cover five orthopedic spine consumables for cervical fixation and fusion surgery, thoracolumbar fixation and fusion surgery, vertebroplasty, endoscopic discectomy, and artificial cervical disc replacement surgery. The selected products have an average price reduction of 84%, which is estimated to save RMB 26 billion every year.
The centralized volume-based procurement work of the fourth batch of high-value medical consumables organized by the state is being promoted simultaneously, with medical consumables for the two categories of intraocular lenses and sports medicine to be included. Next, the National Healthcare Security Administration will continue to advance the quality improvement and scope expansion of centralized volume-based procurement of medical products, adhere to the linkage of and joint advancement by the state and localities, strengthen fine management of the centralized procurement execution process and truly let price reduction effects benefit patients.
Reform of public hospitals is regarded as the barometer of the development of the medical device industry and can directly affect the allocation and sales increase of relevant equipment and consumables. Driven by the goal of high-quality development, the medical device market will brim with new vitality.
Source: Saibailan Devices