Financing and Provider Payment for People-Centered Integrated Primary Healthcare: A Case Study of an Integrated Payment Scheme in Sanming, China

Li Xiang, Zhengdong Zhong, Kunhe Lin, Yingbei Xiong and Junnan Jiang

Chapter 6 in People-Centered Integrated Primary Healthcare System Development in Asia and Beyond, 2025, pp 153-183 from World Scientific Publishing Co. Pte. Ltd.

Abstract: To improve population health, Sanming has implemented the Integrated County Health Coalition (ICHC) and People-centered Integrated Payment (PCIP). The ICHC integrates county hospitals (CHs), township PHC, and rural PHC in rural areas of a county-wide region. PCIP operates at two levels: PCIP for ICHC and PCIP for employees.The PCIP for the ICHC unifies the payment of medical insurance funds and public health funds to the ICHC and breaks traditional Chinese perceptions of using medical insurance funds for medical services. PCIP for the ICHC, based on a global budget payment, has promoted the development of PHC in various aspects.The PCIP for employees means that Sanming implemented an annual salary system reform by introducing a performance-based compensation model. This new system directly links the compensation of doctors and hospital directors to community health outcomes, thereby incentivizing hospitals to actively support PHC in strengthening medical service delivery and improving public health.The achievements of the PCIP in Sanming are mainly evident in three aspects: (1) The proportion of PHC outpatient visits to total outpatient visits and the proportion of chronic disease speciality outpatients at rural PHC in Sanming increased significantly; the proportion of out-of-pocket (OOP) expenditures decreased. (2) The collaboration between hospitals and PHC has continued to strengthen. (3) The proportion of PHC medical insurance fund consumption has steadily risen. Medical resources in the region are being prioritized and allocated preferentially to PHC.The experience of PCIP for the ICHC in Sanming has been widely promoted by the Chinese government. However, Sanming’s reform also faces several challenges, such as high demands on the competence of managers, misperceptions of fund savings by the finance department, and inequities in employee performance distribution.Promoting Sanming’s experience in other regions is possible; it is suggested that the following be done: (1) The medical insurance fund can be used for medical care and as an incentive to improve the health level of the regional population. (2) Coordination between PCIP for the ICHC and employees should be ensured. (3) An integrated performance-based regulatory system should be established. (4) Governmental support should be grounded in scientific evidence.

Keywords: Primary Healthcare; Primary Care; People Centeredness; Integrated Healthcare; Health System; Health Financing; Health Economics; Healthcare Delivery; Health Policy; Public Policy; Universal Health Coverage; People-Centered Integrated Primary Healthcare; People-Centered Integrated Healthcare; Integrated People-Centered Delivery System (search for similar items in EconPapers)
JEL-codes: H51 I11 I15 I18 O53 (search for similar items in EconPapers)
Date: 2025
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