Reform of health-care payments for Chinese medical insurancepractices in Luohu District, Shenzhen City, Guangdong Province


 Background Following the implementation of the Healthy China 2030 strategy, China’s health-care system must shift from being disease-centered to health-centered. Medical insurance funds are the main economic resource for medical health-care service providers in China; therefore, the Chinese medical insurance system has become an important economic lever for adjusting the behavior of medical health-care providers. In the new round of medical reform, substantial progress has been made in the construction of a medical treatment insurance system. The world’s largest medical insurance network has been created in a relatively short period in China and basically achieves universal medical insurance coverage. However, this system mainly provides full coverage to the amount and has yet to fully achieve the principle of “health-care for all” proposed by the Healthy China 2020 strategy. China must promote reform in the medical insurance system and establish a medical insurance guidance mechanism to ensure that medical service providers consider and promote health care. Methods Using Luohu Hospital Group in Shenzhen City, Guangdong Province as the research object, the details of the health maintenance organization’s reform of its medical insurance payment patterns to be more health-oriented are introduced. Comparing the summarized characteristics of the health maintenance organization’s payment patterns, the relevant data for the medical insurance operation and health status of the insured before and after the reform were analyzed statistically. Results The data show that after the reform, the total hospitalization cost of the insured, number of inpatients, and hospitalization rate all decreased. The growth rate of expenditure in the medical insurance fund slowed and initial results were shown in preventive health-care work. The incidence of some infectious diseases and the hospitalization rate of patients with chronic diseases decreased. Conclusions The medical service providers form positive incentives and appropriate medical orientations, while patients demanding health care may form good habits of seeking medical treatment and healthy life, but not pursuing economic benefits through the medical insurance reform.

Against this background, the basic national Chinese health insurance system, i.e., medical insurance, should play an important role in promoting a healthy China. The basis for undertaking this heavy responsibility comes from the strong incentives and restraining effect of medical insurance on medical services' behavior. Differing medical insurance payment methods will lead to completely different medical behaviors and they can also guide medical workers to consider and promote the health of the insured over the uninsured. The core of Healthy China 2030 is to promote and improve health conditions. Healthy China 2030 gives medical insurance economic leverage over health-care services to guide medical service providers to shift from providing "disease-centered" to "healthcentered" services and strive to achieve universal health-care coverage. Therefore, the exploration and establishment of Chinese health-oriented payment patterns in medical insurance should be an important link in the construction of a healthy China by 2030.
Establishing universal medical insurance and expanding basic medical insurance coverage.The construction of a universal medical insurance system for China started in 1998 and continued until 2002. In 1998, the State Council issued a "Decision to Establish a Basic Medical Insurance System for Urban Workers" (GF [1998]  Reform of Medical and Health System" pointed out that "China's basic medical security system consists of medical insurance for urban workers, medical insurance for nonworking urban residents and NCMS, covering the urban working population, non-working urban population and rural population respectively." In 2010, the Standing Committee of the National People's Congress promulgated the Social Insurance Law (Fig. 1.), which forced the legal development of a basic medical insurance system. After years of efforts, China established a medical security network covering 96.5% of the country's population through the provision of the NCMS and medical insurance systems for urban workers and unemployed urban residents.
The increasingly serious expenditure pressure on medical insurance funds.Employee medical insurance funds have been operating for a long time and provide a good example of expenditure pressures. The growth of the national economy will slow after it enters a new developmental stage. Accordingly, employees' salary growth will also slow; therefore, the income growth of medical insurance funds charged in proportion to the employees' salaries will also decrease. However, under the influence of rising medical costs, increasing demand for medical services, acceleration of population aging, increase in the number of patients with chronic diseases, and other factors, medical insurance fund expenditures still maintain high growth. From 2009 to 2018, the average growth rate of employee medical insurance fund expenditure was 16.63%, which is higher than the fund income's average growth rate of 16.24% (Fig. 2). Many Chinese regions had deficits in their medical insurance funds. More seriously, the growth rate of medical insurance funds' per capita expenditure (11.97%) was higher than the growth rate of China's per capita gross domestic product (2.89%) and the growth rate of per capita disposable income (9.04%). If we cannot continue to strengthen control over health-care expenditures, it will be difficult for the medical insurance system to achieve sustainable development at the current growth rate.

Methods
China's medical insurance system currently has basically realized a full-coverage system for its population. However, there is still a long way to go before China realizes the WHO's global strategy for achieving universal health care for all. That is, China, must adopt primary health-care strategies, with institutions, systems, and mechanisms as the guarantee, to provide the Chinese public with fair, comprehensive, and effective basic medical health-care services at reduced costs, and finally achieve the purpose of improving public health. 4 To realize the qualitative change from universal coverage to universal health, China's current health-care services concept and model centered on treatment of diseases must be reversed to become health-centered. This change requires a comprehensive combination of administrative, economic, and legal means using medical insurance as economic leverage to undertake this important task. The function of medical insurance in guiding the behavior of medical services is mainly realized through their payment of medical expenses to the medical service providers. After more than 20 years in China, great achievements have been made in medical insurance payment patterns, which play an important role in guiding medical workers to properly treat patients while simultaneously controlling their medical expenses. In looking at the wider perspective of a healthy China, we always consider whether these payment methods fairly guide medical workers and promote the health of the insured. The answer is clearly disappointing. An early implementation of the payment-by-item principle led to medical insurance organizations compensating for expenses compensation according to the amount of medical services provided by medical institutions. This encouraged medical institutions to provide more services and increase the amount of treatment required. After gradually introducing a variety of fixed prepayments, i.e., medical insurance organizations set the maximum compensation from their clients' medical treatment insurance for each hospitalization. Although the service items provided in single medical treatments at medical institutions decreased, the number of patient hospitalizations increased significantly. In response to this situation "separated hospitalization" emerged in medical institutions; i.e., before the hospitalized patients have fully recovered, they are required to be discharged and go through hospitalization procedures multiple times to avoid the maximum limit of their medical insurance. This reduces these patients' satisfaction with their medical treatment and increases its difficulty and cost. According to data released by the National Health Commission, Chinese residents' rate of hospitalization had increased from 9.9% in 2009 to 17.6% in 2017. The disease type scores and diagnosisrelated groups introduced in recent years are now upgrading diagnoses to include more patients. The capitation payment for outpatient coordination, which could guide doctors to consider health was implemented in relatively few areas. For example, outpatient coordination has been implemented for nearly a decade in Guangdong Province, but capitation payment is only implemented in Shenzhen, Zhuhai, and Dongguan. However, the effect is reduced because big hospitals compete for primary patients and primary medical resources.
Reform of health-oriented medical insurance payment patterns in practice in Luohu District, Shenzhen. The essence of the reform of health-oriented medical insurance payment patterns is to guide medical service providers to consider and promote health care for their patients. What kind of medical insurance payment methods can guide medical providers to consider their patients' health care? Theoretically, arrangements that link a doctor's income to an insured person's health should be considered as a healthoriented payment method. In reviewing medical insurance system reform worldwide, two major models can meet the above requirements: i.e., the gatekeeper system of family doctors in Britain, Canada, and other countries, and the American management-centered medical care system, including health maintenance organizations (HMO) and patientcentered medical homes that emerged later. Marcial et al. observed that the British gatekeeper system forces patients to refer to their family doctor before they can have their first medical treatment in primary medical institutions, with general practitioners providing the primary health services. In terms of medical insurance payment patterns, the combination of total budget and treatment payments was adopted to guide general practitioners to retain more medical insurance funds by improving their residents' health condition and providing more preventive health-care and -management services for residents, which achieved a win-win situation to some extent. 5 Flood et al. noted that the membership of American HMOs pay fixed medical costs and the HMO provides all their medical services. 6 To ensure that the cost of received medical services does not exceed the cost during the service period, the HMOs undertake various efforts to improve the health status of the served population, thereby reducing their overall morbidity and possible medical expenses.
In learning from the international literature on using medical insurance payment patterns to promote health in combination with the specific characteristics of the Chinese medical insurance system, we believe that when the health-care and medical responsibilities of a group of insured people are contracted to a medical service provider together with their medical insurance costs (i.e., the healthier the insured are, the better the medical provider's economic benefits), then an economic mechanism is established to guide these doctors to actively consider the health of the insured. Considering this principle, the Following the reform of medical insurance payment patterns in Luohu District, in the international and domestic exchange of experiences, some experts proposed that "the payment pattern reform of medical insurance in Luohu is HMO, and it is a complete copy of HMO." The two systems do have something in common, which is the basic operational principle, i.e., "total amount management, balance for reward." To obtain the surplus rewards, both systems attach importance to preventive health care for their residents.
However, after a specific comparative analysis, we found that there are many differences between the two. These differences are the innovation and characteristics of Luohu's medical insurance payment reform.
Residents' right to seek medical treatment.The members of HMOs have a very limited choice of medical treatment. That is, HMO members can only seek medical treatment in HMO-affiliated institutions insuring them and medical treatment expenses outside the HMO system cannot be reimbursed. In contrast, the reform of Luohu District is based on the premise that the right of the insured to seek medical treatment is not restricted. The insured can go to any medical institution for medical treatment according to the needs of his/her disease without the approval of Luohu Hospital Group and the incurred medical expenses will be reimbursed, which guarantees the residents' right to choose medical treatment to the greatest extent.
Risk selection and service content.In HMO medical services, insurance organizations can reduce the underwriting risks through adverse selection. Residents must be audited before signing a contract with an HMO. Only those who pass the insurance organization's audit can purchase different levels of insurance from the HMO. As members of the HMO, they can enjoy medical care services corresponding to the level of insurance purchased. However, this leads to "cream skimming," i.e., insurance organizations only accept residents with relatively better health conditions for insurance coverage. Those with worse health conditions are declined politely, which will seriously harm the patients' interests. In terms of health-care service contents, HMO members can only enjoy the medical services stipulated in their agreement. The latitude for doctors to practice medicine is restricted under HMOs, and influenced by the concept of fee control, these doctors are likely to reduce necessary prescriptions and examinations to cut down costs, which seriously affects the quality of medical services for their patients. The adverse selection by HMOs and their limited medical services are important reasons for the decline of this service model in the 21st century. In contrast, the reform of Luohu District designed a one-way selection mechanism, i.e., Luohu residents can choose whether to sign a contract or not, and medical institutions are not allowed to refuse residents. The reform plan clearly stipulates that the "Luohu Hospital Group shall not refuse eligible insured to participate in the pilot program for any reason," which effectively avoids the improper risk selection by medical institutions and guarantees the residents' right to choose the type of health care they wish to receive. In terms of service content, the reform plan clearly indicates that in addition to signing the registration agreement to provide basic medical and public health-care services, Luohu Hospital Group also needs to provide family doctor services, a dynamic electronic health record management service, chronic disease management services, medication consultation and guidance services, preventive health-care services, family sickbed services, community rehabilitation services, and medical integration pension services among other personalized services.
Medical insurance payment patterns provide different guidance for doctors. The outside medical treatment expenses of HMO members cannot be reimbursed; therefore, the HMO is likely to make excuses to not accept patients so that they can reduce their expenditures and obtain more funds under the "balance for reward" mechanism, especially for patients with difficult and severe diseases who really need medical services. In Luohu District's reform plan for medical insurance payment patterns, the medical insurance expenses of the insured who go for medical treatment outside Luohu Hospital Group are clearly stipulated to be drawn from the hospital group's total amount. That is, if Luohu Hospital Group cannot attract its patients to stay in the group through providing effective services, their patients can freely go to other medical institutions to receive medical treatment.
Luohu Hospital Group has no right to interfere in the management of medical insurance expenses for patients receiving health care outside the group. Because of this design, Luohu Hospital Group does not dare to shuffle patients and reduce the quality of its services. Thus, the uniqueness of the "balance for reward" approach is assured. The residents' health is at the core of Luohu Hospital Group's health-care services, i.e., good preventive health care means that the residents get sick less and are hospitalized fewer times. This frees up resources for improving service quality and contents to attract patients to the Luohu Hospital Group, thus realizing the qualitative change of insurance from "disease insurance" to "health insurance."

Results
In 2018, a total of 520,000 residents signed a family doctor service agreement with Luohu Hospital Group. About 380,000 of these residents met the requirements of the pilot program (i.e., patients who drew social medical insurance from Shenzhen, who are living or working in Luohu District and have been insured for 2 years or more). The analysis of the effect of the reform was based on these 380,000 residents.
The basic data, such as medical expenses, medical insurance fund expenditure, and the number of hospitalizations of the contracted insured were respectively collected from medical insurance organizations in Shenzhen and Luohu District for statistical analysis. Decreased total cost of hospitalization for the contracted insured. The total cost of hospitalization for the contracted insured increased rapidly at the beginning of the reform.
The annual growth rates were 43.52% and 25.77% in 2016 and 2017, respectively. However, they began to decrease in 2018, with a decrease of 0.73% compared with that in 2017 (Fig. 3).

Discussion
The growth rate of medical insurance fund expenditure is lower than the average level for Shenzhen The growth rate of medical insurance funds in Shenzhen City is measured by the growth rate of medical insurance fund expenditure per capita. From 2016 to 2018, the per capita medical insurance fund of Luohu Hospital Group's contracted insured increased annually, with an increase from 1,477 yuan to 1,689 yuan. However, the growth rate of the per capita expenditure was lower than that for the average level in Shenzhen ( Table 2).

The average cost of hospitalization of the contracted insured in Luohu
Hospital Group is significantly lower than the level outside the group From 2016 to 2018, compared with the average cost of hospitalization, the expenditure on medical expenses in the Luohu Hospital Group was lower than that outside the group, while the average cost of hospitalization outside the group was 35% to 46% higher than that in the group (Fig. 4).

Decreased number of hospitalizations for the contracted insured
At the beginning of the reform, the number of hospitalizations for the contracted insured increased rapidly. The annual growth rates were 32% and 20.4% in 2016 and 2017, respectively. However, the number of hospitalizations began to decrease in 2018, with a decrease of 14.7% compared with that in 2017 during the same term (Fig. 5).  7) compared with that in 2017, and that for hypertension decreased by 5.4% (Fig. 8).
Third, the number of hospitalizations for senile cataract surgery is continually increasing.
Especially in 2016, the first year of the reform, the number increased by 24.59% compared with that in 2015 (Fig. 9). The number of hospitalizations for postoperative chemotherapy treatment of malignant tumors also increased rapidly after the reform, but began to decrease in 2018 (Fig. 10). The variation trends of the above two diseases are related to the preventive health-care measures taken by Luohu Hospital Group. For example, elderly people considered their poor eye sight to be presbyopia, but after the community health service center has performed physical examinations and conducted health publicity and education for the elderly, the elderly may identify their cataract disease early and successfully receive cataract surgery as treatment. The potential reasonable medical demands brought by the reform rapidly increased after some time, but gradually decline after reaching a peak because the number of undiscovered patients with potential cataract disease was reduced gradually. Similarly, the potential medical demands for malignant tumors increased rapidly through early screening and then stabilized gradually. Therefore, the increases in reasonable medical demands caused by effective preventive health-care measures are time-limited to some extent. When the increase in demand peaks, it will gradually or rapidly fall according to the characteristics of the disease types. The cost of preventive health care is thus much lower than the medical expense after the onset of disease and the residents' quality of life will also be improved significantly.
Fourth, the number of hospitalizations for diseases such as cervicalgia, omalgia, osphyalgia, and skelalgia (i.e., lumbar disc herniation, cervical joint toughness, mixed cervical spondylosis) began to decrease in 2018 (Fig. 11). In terms of the rankings of disease types, however, the number of hospitalizations for these diseases was the highest over 3 years (Table 3). Thus, new requirements for Luohu Hospital Group's preventive health-care work were identified. Next, the group's resources in various disciplines, such as rehabilitation, traditional Chinese medicine, and bone injury, will be fully used in the early prevention of these diseases.

Conclusions
According to the data analysis, the reform of medical insurance payment patterns has been performed over 3 years in Luohu District, but the medical insurance fund expenditure has never decreased rapidly. Nevertheless, we believe that we should continue to make efforts to reform health-oriented medical insurance payment patterns.
First, from a system design perspective, Luohu's reform draws lessons from advanced experiences domestically and internationally, and effectively avoids problems, such as adverse selection, residents' restricted medical treatment choices, shifting responsibility back to patients, and reduced quality of medical services. Second, many studies have shown that changes in the expenditure of medical expenses and medical insurance funds are jointly influenced by various factors, 8 including the release of potential medical demands, the law of disease development, and changes in disease spectrum, as well as national policies, medical treatment prices, and rising price levels. More importantly, the reform of medical insurance payment patterns in Luohu District led medical institutions to change their medical treatment orientation by turning from treatment-centered to healthcentered care. Various preventive health-care measures also have good results that improve the residents' quality of life. The international experience simultaneously showed that the socioeconomic benefits of preventive health care will be revealed after some time and these benefits will be far greater than those brought about by simple medical treatments. Therefore, we believe that the reform of medical insurance payment patterns will soon control the growth of medical expenses by adhering to the correct direction and methods. Finally, "benefiting people is the ultimate goal of the development of health"; therefore, the ultimate goal of the reform of medical insurance payment patterns should be also to benefit the people. Thus, the success or failure of medical insurance reform shall not be measured only by the effect of controlling costs. The relationship between medical treatment and medical insurance should facilitate the role of medical insurance as economic leverage. Accordingly, the medical service providers form positive incentives and appropriate medical orientations, while patients demanding health care may form good habits of seeking medical treatment and healthy life, but not pursuing economic benefits through the medical insurance reform.     Changes in the average cost of hospitalizations for the contracted insured (yuan) Figure 5 Changes in the number of hospitalizations for the contracted insured Changes in the number of hospitalizations for type 2 diabetes Changes in the number of hospitalizations for senile cataract Changes in the number of hospitalizations for diseases such as cervicalgia, omalgia, osphyalgia, and skelalgia