China is shifting a larger slice of its national medical insurance pool directly to local clinics and community hospitals, a move designed to lower out-of-pocket costs for patients and shore up long-underfunded front-line healthcare workers.
A joint guideline released by the National Healthcare Security Administration and two other government departments in March redirects more newly added annual insurance funds toward primary healthcare. The policy tackles a longstanding bottleneck in China's healthcare system where top-tier regional hospitals are perpetually overwhelmed while neighborhood clinics lack the funding, medications and incentives to handle basic care.
Wu Hao, dean of the School of General Practice and Continuing Education at Capital Medical University in Beijing, said that the document clarifies that newly added annual insurance funds will be directed more to primary healthcare institutions and that the management of total funds will be upgraded in their favor.
"The measure will not only alleviate concerns among grassroots medical staff regarding income security and liability, but also encourage them to proactively improve their service capabilities," he said during an event held by the administration in April.
"Ultimately, the goal is to enable residents to access high-quality medical services close to their homes," he added.
The guideline also states that the reimbursement rate for outpatient services under the resident insurance program will be no less than 50 percent.
"This means that patients receiving treatment at the grassroots level can enjoy higher reimbursement rates and pay less out of their own pockets, thereby guiding people to choose primary healthcare facilities as their first option for medical care," Wu said.
The guideline also states that primary-level institutions are permitted to prescribe long-term prescriptions of up to 12 weeks for eligible patients with chronic conditions.
"As a result, patients in stable condition can obtain up to three months' worth of medication in a single visit, sparing them from frequent trips to the hospital and allowing grassroots doctors to provide proper diagnosis and treatment without constraints," Wu said.
China has focused on improving grassroots healthcare in recent years. By the end of last year, the nation had 1.06 million primary healthcare institutions and 5.25 million grassroots healthcare workers.
A total of 2,199 county-level regions have built tight medical consortia that connect higher-level hospitals with rural or community clinics. In 2025, the number of patient visits to primary healthcare institutions reached 5.56 billion, accounting for 52.6 percent of the national total.
Miao Yanqing, a researcher from the China National Health Development Research Center, said one highlight of the guideline is to motivate county-level medical alliances to transition their role to the health management of residents and guide them to seek medical care within their home counties.
"It clarifies that any surplus insurance funds within the medical consortia will be directed primarily toward grassroots medical institutions and front-line healthcare workers," she said.
A series of payment changes are also aimed at positioning county-level institutions as destinations for handling severe and complicated cases, and nurturing medical talents, while grassroots clinics will be mainly tasked with caring for chronic and common diseases, as well as providing rehabilitation and nursing services.
The guideline also states that the national centralized drug procurement program will be used to secure stocks of common and chronic medications at primary care facilities. Authorities will support these institutions in equipping them with facial recognition devices to enable faster payment and insurance settlement.
Xu Na, deputy director of the National Healthcare Security Administration's medical services management department, said that the administration will select 15 pilot regions to explore best practices and generate replicable experiences that can be promoted nationwide.
