China eyes healthcare payment shake-up to trim costs

China will push to diversify how it pays the healthcare costs for its nearly 1.4 billion people in a bid to stem "irrational growth" of medical costs, the finance ministry said in a statement.

The Ministry of Finance said in a statement it would develop and trial payment methods including those that set fees according to initial patient diagnoses, standard fees linked to set diseases, as well as per capita or bed-linked fees.

China has been cracking down on high drug prices, looking to expand the role of private insurers and reforming funding structures for hospitals amid a broader drive to trim a healthcare bill expected to hit $1 trillion by 2020.

The Ministry of Finance said that the move to diversify payment channels would help "regulate healthcare service behaviour and control the irrational rise of costs", as well as supporting China's state health insurance schemes.

It added that reforms to medical insurance payments systems should cover all medical institutions and services by 2020.

The ministry noted that current payment and health insurance structures fell short of what was needed, reflecting the fact that many families still struggle with healthcare costs and have to pay heavily out-of-pocket for more serious diseases.

Most countries have a number of methods by which healthcare payments are established and agreed between the state and hospitals, each with various advantages and weaknesses for the state, private insurance firms and patients.