Core Viewpoint - The article discusses the implementation of a new payment reform in China's healthcare system, focusing on a disease-based payment model to enhance efficiency and control costs in medical services [1][2]. Summary by Sections Payment Reform Overview - The National Healthcare Security Administration (NHSA) has introduced the "Interim Measures for the Management of Disease-Based Payment" to promote a multi-faceted payment reform primarily based on disease categories [1]. - The new measures will establish a dynamic adjustment mechanism for disease grouping schemes, with adjustments occurring approximately every two years [1][2]. Disease-Based Payment Mechanism - Disease-based payment involves grouping diseases or calculating values to implement a "bundled payment" system for medical institutions [2]. - The NHSA has been actively promoting disease-based payment for inpatient medical expenses, focusing on two pilot projects: Diagnosis-Related Groups (DRG) and Disease-Based Value Payment (DIP) [2]. - Adjustments to the DRG grouping scheme will maintain stability in major diagnostic categories while focusing on core and detailed subgroup adjustments [2]. Key Policies and Measures - The new measures clarify policies, key technologies, core elements, and supporting measures related to disease-based payment, emphasizing rigid total budget management [2]. - The NHSA will incorporate disease-based payment requirements into agreement management, enhance monitoring and evaluation of reform effectiveness, and strengthen fund supervision [2]. Special Case Mechanism - A "special case negotiation" mechanism has been established to support medical institutions in treating complex and severe patients, allowing for reasonable use of new drugs and technologies [3]. - Cases eligible for special negotiation include those with long hospital stays, high resource consumption, and complex conditions that do not fit standard payment models [3]. Impact on Medical Institutions - The shift from fee-for-service to disease-based payment encourages medical institutions to control costs while still generating revenue [5]. - Institutions can apply for special case negotiations for patients requiring extensive resources or new treatments, ensuring adequate care [5]. Impact on Patients - The reform does not alter the patient discharge settlement experience, and patients may see a reduction in out-of-pocket expenses due to fewer unnecessary medical services [6]. - The NHSA has not imposed restrictions on hospital stays, and any coercive practices by medical institutions regarding discharge will be strictly addressed [6].

Group 1 - The A-share market has seen a significant increase in trading volume, with the medical device sector gaining attention from investors after four years [1] - The medical device index ETF (159898) received over 70 million yuan in net inflows last week, bringing its total size to 336 million yuan, a new record since its listing [1] - Over the past 20 trading days, the ETF has seen net inflows in 17 of those days, totaling over 134 million yuan [1] Group 2 - Recent positive signals from medical device policies have contributed to the sustained increase in market investment in this sector [3] - The 11th batch of drug procurement has started, moving away from a simple lowest price reference, which is expected to benefit domestic manufacturers as prices may see marginal recovery [3] - The National Medical Insurance Administration has held multiple meetings to support innovative drugs and devices, indicating a comprehensive policy framework that will enhance industry innovation and benefit domestic companies with independent innovation capabilities [4] Group 3 - The National Medical Insurance Administration is promoting reforms in payment methods, focusing on disease-based payments to establish a unified and efficient medical insurance payment mechanism [4] - Analysts from Xiangcai Securities believe that despite ongoing cost control pressures in the pharmaceutical industry, the establishment of a multi-tiered payment system will stabilize the industry [4] - Industrial recovery is anticipated in the second half of the year as the impact of high-cost procurement gradually diminishes, with some products expected to see improved pricing and volume [4]

Core Viewpoint - The National Healthcare Security Administration (NHSA) has issued a temporary measure to manage disease-based payment systems, aiming to enhance the standardization of medical insurance payments across all regions in China [1][2]. Group 1: Payment Reform - The traditional payment method in China was fee-for-service, which often led to excessive medical practices such as over-prescribing and unnecessary tests [2]. - Since 2019, the NHSA has been promoting a "disease-based payment" reform, where payments are bundled based on historical data and patient conditions, shifting the focus from quantity of services to cost control [2][4]. - As of the end of 2024, over 90% of hospital discharges will be covered under the disease-based payment system [5]. Group 2: Impact on Medical Institutions - The reform has led to more standardized medical practices, reduced time and costs, and shorter average hospital stays [4]. - Medical institutions can apply for special cases for patients with long hospital stays or high resource consumption, allowing for project-based payments if necessary [4][5]. - Nearly 60% of tertiary public hospitals have adopted "day surgery," allowing patients to complete procedures within 24 hours, thus improving bed turnover and reducing costs [7]. Group 3: Patient Experience - The disease-based payment system reduces the financial burden on patients and encourages hospitals to control costs and standardize treatment [7]. - Patients who previously required hospitalization for simple procedures can now receive treatment as day surgeries, which are reimbursed at the same rate as inpatient care [7][9]. - In Shandong, patients can undergo simple surgeries and be discharged within 24 hours, significantly reducing hospital stay duration and costs by approximately 30% [11].

Core Viewpoint - The National Healthcare Security Administration (NHSA) has implemented a pilot program for disease-based payment management to enhance the standardization of medical insurance payments, transitioning from a fee-for-service model to a bundled payment approach [1][3]. Group 1: Payment Reform - The traditional fee-for-service model in China has led to excessive medical practices, prompting the NHSA to promote a disease-based payment system since 2019, which groups patients by similar conditions and sets a standard payment based on historical data [1][3]. - As of the end of 2024, over 90% of hospital discharges will be covered under the disease-based payment system, which aims to reduce unnecessary hospital stays and costs [6]. Group 2: Impact on Medical Institutions - The reform has led to more standardized medical practices, reduced time and costs, and shorter average hospital stays [3]. - Medical institutions can apply for special cases for patients with long hospital stays or high resource consumption, allowing for project-based payments or adjusted payment standards after NHSA review [5]. Group 3: Patient Experience - The payment reform does not impose restrictions on hospital stay durations, and NHSA has not set limits like "no more than 15 days per hospitalization," ensuring patients receive adequate treatment [6]. - Patients benefit from reduced personal financial burdens due to fewer unnecessary medical services, as the reimbursement is based on a percentage of the costs incurred [8]. Group 4: Day Surgery Promotion - The disease-based payment system encourages hospitals to adopt day surgery practices, with nearly 60% of tertiary public hospitals now offering such services, which can complete treatment within 24 hours [9]. - In Shandong Province, day surgery reforms allow patients to undergo simple procedures and be discharged within 24 hours, significantly reducing hospital stay durations and costs by approximately 30% [11][13].

Core Viewpoint - The National Healthcare Security Administration (NHSA) has issued the "Interim Measures for Disease-Specific Payment Management," aiming to guide local governments in advancing the reform of disease-specific payment systems, particularly focusing on Diagnosis-Related Groups (DRG) and Disease-Specific Payment (DIP) methods [1][2]. Summary by Relevant Sections Reform Background - The DRG payment system was first implemented in China in 2008, with a nationwide rollout of a comprehensive DRG system starting in 2018. The DIP pilot began in 2020, marking a significant shift towards a unified national payment system [2]. - The NHSA has been actively promoting payment reform to enhance the efficiency of medical fund usage and control costs within healthcare institutions [2]. Key Features of the New Measures - The new measures emphasize three main areas: 1. Total budget management, requiring reasonable budget preparation and emphasizing the rigidity of total budget limits. 2. Standardization of grouping schemes, including clear guidelines on the formulation and adjustment of grouping schemes, which should be revised every two years. 3. Clarification of core elements and supporting measures, ensuring that key factors like weight, rate, and payment standards are well-defined [3][4]. Implementation and Adjustments - The NHSA is responsible for the formulation and adjustment of grouping schemes, while local authorities can tailor DRG subdivisions to local conditions. The grouping framework includes major diagnostic categories, core groups, and detailed subdivisions [3][4]. - Adjustments to the DRG grouping scheme will focus on maintaining stability in major diagnostic categories while allowing for changes in core and detailed groups, with a two-year adjustment cycle [4]. Transparency and Support Mechanisms - The new measures aim to enhance transparency in total budget management and provide clearer technical standards for grouping and adjustments, addressing concerns from healthcare institutions [5]. - The NHSA has also introduced supporting mechanisms, including prepayment of medical funds to qualifying institutions, which has exceeded 1.7 trillion yuan as of July 2024, and reduced settlement cycles for medical institutions [6]. Training and Capacity Building - The NHSA emphasizes the need for local healthcare departments to improve policies and supporting mechanisms, monitor reform effectiveness, and provide training for staff involved in the implementation of disease-specific payment systems [7].

Core Viewpoint - The National Healthcare Security Administration (NHSA) has released the "Interim Measures for Medical Insurance Payment by Disease" aimed at reforming the medical insurance payment system to establish a unified, efficient, and standardized mechanism that supports the high-quality development of medical institutions [1] Summary by Relevant Sections Payment System Reform - The new measures focus on payment by disease, emphasizing the need for a comprehensive reform of the medical insurance payment methods [1] - The goal is to create a nationwide unified payment mechanism that is effective and collaborative [1] Budget Management - The measures stipulate strict total budget management, requiring reasonable expenditure budgeting to determine the total payment amount by disease [1] - It emphasizes the rigidity of the total budget [1] Grouping Scheme - The measures clarify the responsibilities for formulating and adjusting grouping schemes, including the framework, data support, and adjustment content [1] - Grouping schemes are to be adjusted every two years [1] Core Elements and Supporting Measures - The measures define key elements such as weight, rate, and payment standards, requiring collaboration between the NHSA and medical institutions to reach consensus [1] - It also standardizes supporting measures related to medical insurance payments, including special negotiations, advance payments, opinion collection, and data publication to enhance the scientific level of medical insurance payments [1]

Core Viewpoint - The National Healthcare Security Administration (NHSA) has released the "Interim Measures for Disease-Specific Payment Management," aiming to reform the medical insurance payment system to establish a unified, efficient, and standardized mechanism that supports the high-quality development of medical institutions [1] Summary by Relevant Sections Payment System Reform - The new measures focus on disease-specific payment as a key aspect of the medical insurance payment reform [1] - The goal is to create a nationwide unified payment mechanism that is effective and collaborative [1] Budget Management - The measures emphasize the importance of total budget management, requiring reasonable expenditure budget preparation and establishing a rigid total for disease-specific payments [1] Grouping Scheme - The measures specify the formulation and adjustment of grouping schemes, detailing the responsible parties, framework, supporting data, and adjustment content, with a principle of biennial adjustments [1] Core Elements and Supporting Measures - The measures clarify the definitions of key elements such as weight, rate, and payment standards, mandating that the NHSA collaborates with medical institutions to reach consensus [1] - It also standardizes supporting measures related to medical insurance payments, including special case negotiations, advance payments, opinion collection, negotiation, and data publication to enhance the scientific level of medical insurance payments [1]

Core Viewpoint - The recent reforms in medical insurance payment methods, particularly the special single negotiation mechanism, aim to support the use of innovative drugs and medical devices, addressing concerns about high costs in medical institutions [1][3][4]. Group 1: Special Single Negotiation Mechanism - The special single negotiation mechanism is designed to provide reasonable compensation for medical services when the costs exceed three times the payment standard [2][4]. - The mechanism will be refined in conjunction with national policies supporting the development of innovative drugs and medical devices, indicating a commitment to support medical institutions in treating complex and critical patients [3][4]. - The number of cases eligible for special single negotiation should not exceed 5% of the total discharged cases under the DRG or DIP payment systems [4]. Group 2: Impact on Innovative Drugs - The reforms are expected to benefit drugs listed in the commercial health insurance innovative drug directory, particularly those with high clinical value and patient benefits [5][6]. - The introduction of the commercial health insurance innovative drug directory is anticipated to provide a framework for local authorities to evaluate and implement the special single negotiation policy effectively [5][7]. - Local governments, such as those in Hainan and Guangzhou, are developing their own innovative drug directories to enhance the support for innovative drugs and medical devices [8][9]. Group 3: Regional Initiatives - Regions with relatively abundant medical insurance funds, like Shanghai and Zhejiang, have already launched local supportive directories for innovative drugs and devices [8][10]. - The Zhejiang Medical Security Bureau has established a list of innovative medical technologies eligible for payment incentives, focusing on drugs that have recently entered the basic medical insurance directory [11][12]. - Shanghai has implemented a strategy to adjust payment standards for cases involving new technologies, allowing for full payment without a control ratio for high-cost cases [12].

Core Viewpoint - The stock price of China Resources Medical Holdings has plummeted due to a significant decline in expected mid-year profits, with a forecasted drop of 20% to 25% year-on-year for the six months ending June 30, 2025, and a more severe decline of 55% to 60% when excluding a one-time gain of approximately 210 million yuan [3][5]. Company Performance - China Resources Medical Holdings experienced a stock price drop of 15.58% on August 4, 2023, reaching a market capitalization of 4.85 billion HKD [1]. - The company anticipates a profit decline primarily due to reduced average medical insurance fees affecting operational profits and a gradual exit from the IOT business, which has decreased profit contributions [5]. - The company's hospital business revenue for 2024 has already shown a downward trend, with a reported revenue of 9.185 billion yuan, a year-on-year decrease of 2.4% [8]. Industry Context - The performance of hospital stocks has been generally poor in the first half of the year, with other companies like International Medical and Innovation Medical also forecasting losses [10]. - The National Healthcare Security Administration has introduced a new payment reform (DRG/DIP 2.0), which aims to optimize payment methods and improve service quality, potentially impacting the financial performance of medical institutions [12]. - The DRG/DIP payment model encourages hospitals to focus on clinical treatment efficiency and management, presenting both opportunities and challenges for companies in terms of information management and cost control [12].

Core Viewpoint - The stock price of China Resources Medical Holdings has plummeted due to a significant decline in expected mid-year profits, with a forecasted drop of 20% to 25% year-on-year for the six months ending June 30, 2025 [2][3]. Company Performance - On August 4, China Resources Medical's stock opened down 7% and fell to a low of 3.70 HKD, with a maximum decline exceeding 16%, closing at a 15.58% drop, resulting in a total market capitalization of 4.85 billion HKD [2]. - The company anticipates a profit decline of 55% to 60% year-on-year when excluding a one-time gain of approximately 210 million CNY from the Yanhua IOT agreement [3]. Reasons for Profit Decline - The primary reasons for the profit decline include reduced average medical insurance fees leading to lower operating profits for its medical institutions and a gradual exit from the IOT business, which has decreased profit contributions [5]. - The hospital business revenue has already shown a downward trend, with a reported revenue of 9.185 billion CNY in 2024, a year-on-year decrease of 2.4% [7]. Industry Context - The overall performance of hospital stocks has been poor in the first half of the year, with other companies like International Medical and Innovation Medical also reporting losses [8]. - The National Medical Insurance Administration has introduced reforms to the payment methods, which are expected to impact the industry significantly, pushing for a shift from "drug-supported medical care" to "quality-driven" services [9][10].