Since the 16th CPC National Congress, China's health sector has experienced tremendous progress, including the primary formation of a health service delivery system in both urban and rural areas, enhanced capacity of diseases prevention and control, expanded coverage of health insurances, and the preliminary establishment of the Essential Drug System, all of which led to the comprehensive development of the health sector and significant improvement in the health status of the population. The average life expectancy rose from 71.4 in 2000 to 74.8 in 2010. The maternal mortality rate dropped from 51.3/100,000 in 2002 to 2.61/100,000 in 2011. The infant mortality rate decreased from 29.2‰ in 2002 to 12.1‰ in 2011, and the mortality rate of children under five fell from 34.9‰ in 2002 to 15.6‰ in 2011. The above figures demonstrate that China has successfully achieved the Millennium Development Goals ahead of schedule and becomes one of the leading developing countries in terms of the health status of the population.

1. The development of health sector is accelerating and healthcare reform has made significant progress.

After 2002, having gone through the battle against SARS, the CPC Central Committee put forward the Scientific Outlook on Development with people-centered views and gave higher priority to the development of health sector. The government increased investment in the enhancement of the public health service system, the grass-roots level health service delivery system and the basic medical insurance system. Then, the 17th CPC National Congress determined the goal of ensuring basic health services for all, defined the direction of providing public welfare in the health sector, and identified the historical task of building the essential health system. In March 2009, the Central Committee and the State Council made the decision to further strengthen the healthcare reform and determined its framework, policy and goals. After three years of hard work, we have made initial achievements in the following five aspects.

1) The basic health insurance system has been preliminarily established. In 2011, the population covered by employee insurance, resident insurance and the New Rural Cooperative Medical Scheme (NRCMS) reached 1.3 billion, over 95% of the total population, which made it the largest medical insurance network in the world. The NRCMS coverage has been expanding across the country since 2003 when the pilot was launched, with its insured population rising from 80 million in 2003 to 832 million in 2011. The fund pooled per capita for NRCMS increased from 30 yuan in 2003 to 246 yuan in 2011, benefiting 1.315 billion people in 2011, up from 76 million in 2004, with 70% in-patient expenses reimbursable within the policy. During the first 6 months, 2012 the NRCMS catastrophic disease insurance mechanism has been preliminarily established and more than 340,000 person times has been reimbursed. A medical relief system for rural and urban areas has been established in 2003 and 2005 respectively. By 2011, it has provided financial support of 18.66 billion yuan to 88.87 million person times.

2) The Essential Drug System has been established from scratch. Essential drugs without zero markup are offered in government-run grass-roots health institutions. Currently this practice is expanding to village clinics and other non-government-run grass-roots health institutions. In grass-roots level, the price of essential drugs has reduced by 30%. A new operation mechanism in grass-roots health institutions has formed in terms of personnel administration, drug distribution, government funding, and performance evaluation. Our investigation shows that after the healthcare reform, the proportion of government funding and medical insurance in the total revenue of a grass-roots health institution has reached 72%, up 22% before the reform.

3) The grass-roots health service delivery system has been significantly strengthened. A grass-roots health service network covering both urban and rural areas has been preliminarily established, with better facilities and personnel. After the three years of reform, visits to grass-roots health institutions have increased by 28.5%- 843 million. Treating minor diseases at grass-roots level and major diseases in hospitals has become a new philosophy among patients.

4) Equal access to public health services has evidently enhanced. The government provides 41 items of basic public health services in ten categories free-of-charge. Mega public health service programs promoted by the government targeting specific diseases, high-risk population and specific areas benefited 200 million people. And the building of more than 8000 public health service institutions is supported by the government, indicating an improvement of service capacity.

5) Public hospital pilot reform has been making steady progress. Pilot reform has been carried out in more than 2000 hospitals of 17 national level pilot cities and 37 provincial level pilot cities. Modern hospital administrative systems are tentatively established, which means the separation of administration and operation under the larger health system. In pilot cities such as Beijing and Shenzhen, recent public hospital reform has made some breakthrough and achieved preliminary progress in canceling drug markup, and establishing a brand new funding, operating and monitoring mechanism. Online registration, non-workday clinic service, and quality nursing are offered to residents of those cities. To effectively control medical expenses, clinical pathway is promoted, and recognition of medical examination and lab test results among hospitals at the same level is promoted. In order to eliminate subsidizing medical services with drug sales, we started to press ahead a comprehensive reform on county level public hospitals by reforming their personnel management, drug distribution, funding and performance evaluation, with a focus on enhancing service capacity, and establishing a new pattern featuring first diagnoses on grass-roots level, mutual referral between hospitals, cross-level hospital cooperation and division of labor.

2. Health resources continue to grow, and equity of and access to basic medical services have been significantly improved.

1) Total health expenditure (THE) is increasing and financing structure is optimizing. In 2011, the estimated THE reached 2426.9 billion yuan, 5.1% of GDP. Since 2002, THE per capita grows by 10.8% annually (calculate at comparable price, so are the following numbers). In 2002, out-of-pocket expenditure accounted for 57.7% of THE, while the government and social expenditure accounted for 15.7% and 26.6% of THE respectively. In 2011, percentage of out-of-pocket expenditure fell to 34.9%, while the proportion of government and social expenditure increased to 30.4% and 34.7%. This structural change indicates a more rational financing structure, a lighter burden for the residents and an improvement in the equality of funding.

2) The health resources continue to grow. By the end of 2011, there were 954,000 health institutions, including 22,000 hospitals and 918,000 grass-roots health institutions. There was an increase of 148,000 institutions compared with the figure of 2003. The number of registered (associated) doctors per thousand population increased from 1.47 in 2002 to 1.82 in 2011, registered nurses up from 1.00 in 2002 to 1.66 in 2011, and hospital beds up from 2.48 in 2002 to 3.81 in 2011.

3) The utilization of health services has grown significantly. The total outpatients number was up from 2.145 billion person times in 2002 to 6.27 billion in 2011, and the total inpatients number up from 59.91 million in 2002 to 1500 million in 2011. With more convenient access to health care services, the number of residents within 15 minutes walking distance radius has risen from 80.7% in 2003 to 83.3% in 2011.

4) Medical expense has been more effectively controlled. In 2011, the expenses for each outpatient visit and inpatient per capita in community health service centers have fallen by 13.5% and 14.8% from 2008 respectively (calculate at comparable price, so are the following numbers). The medical expenses in township hospitals are rising more slowly. In 2011, the expenses for each outpatient visit and inpatient per capita in public hospitals both rise by 2.2%, a significant smaller number comparing to 6% rise in the previous two years, indicating a better controlled public hospital expense.

5) The gap between urban and rural areas in health development is bridging. In 2003, 55% of urban residents were covered by a basic health insurance, while the rate for rural residents was only 22%. In 2011, the rates for urban and rural residents with insurance became 89% and 97%, with a larger percentage of rural population than urban population covered by medical insurance. The gap of health status between urban and rural areas is also closing, with maternal mortality rate gap falling from 1:2.61 in 2002 to 1:1.05 in 2011, and infant mortality rate gap falling from 20.9‰ in 2002 to 8.9‰ in 2011.

The decade after the 16th CPC National Congress has seen a rapid progress in our health sector. We would continue to make efforts to overcome difficulties, fulfill the tasks set by the 12th Five Year Plan, and achieve the goal of providing basic health services to all.