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Clinical pathways: MOH stepping stones towards DRG-based payment systems (and drug use limits)

Posted by Kania Li, GBI Analyst

Clinical pathways, also known as care pathways, critical pathways, integrated care pathways, or care maps, are one of the main tools used to manage the quality in healthcare concerning the standardization of care processes, and specify specific diagnostic tests, medications, and treatment protocols for various medical indications and disease states. In China, the Ministry of Health (NYSE:MOH) launched its two-year pilot implementation of clinical pathways beginning December 2009; it initially selected 50 hospitals across 12 provinces including Beijing, Liaoning, Jilin, Shanghai, Jiangsu, Shandong, Henan, Guangdong, Sichuan, Guizhou, Yunnan, and Gansu.

According to the MOH, clinical pathways management is part of an attempt to examine implementation of diagnosis-related group (DRG)-based payment systems to reduce medical costs - one of the primary objectives of China’s health reform. Elimination of unnecessary (and expensive) diagnostic and therapeutic procedures as well over prescription of (again, expensive) medications are a primary goal of DRG payment systems, and as such, are well suited to the current climate in China healthcare.

According to recently reports by the MOH, the pilot program for the implementation of clinical pathways management systems have shown positive results in terms of the quality level of healthcare services provided as well as medical costs. During the first 10 months last year, a total of 361,051 clinical cases with a cure rate of 85.1% and a dropout rate of 9.51% were received in pilot hospitals.  For instance, Central Hospital of Dalian City (one of the first pilot hospitals) has adopted clinical pathways management in 10 of its hospital medical specialties across 15 indications; results showed that the duration of hospitalization was reduced from 5-7 days to 3-5 days, and average treatment cost dropped by 33.4%. By the end of 2010, MOH had released a total of 112 clinical pathways spanning 22 medical specialties. At present, over 200 clinical pathways have been released and are currently being implemented in 1,383 hospitals across 30 provinces in China. This year, MOH Vice-Minister Ma Xiaowei has announced plans to issue an additional 150 clinical pathways targeting 100 new indications by the end of 2011, bringing the total number of pathways to over 300.

Clinical pathways will likely form a key component in determining diagnosis and treatment patterns in the Chinese healthcare system by contributing to DRG guidelines and payment determinations, by specifying which drugs are considered first-line vs. alternate (vs. unneeded) therapies, and by influencing reimbursement rates and restrictions. Pharmaceutical companies would do well to understand which pathways relevant to their areas of focus have/will be released and, if possible, take steps to maintain a stake in the process of their creation and evaluation via participation in academic and public health programs and engagement of both key opinion leaders and healthcare authorities.