National Administration of Traditional Chinese Medicine, Office of Medical Administration Letter [2020] No. 175

To the Administration of Traditional Chinese Medicine of all provinces, autonomous regions, and municipalities directly under the central government, and to the Health Commission of the Xinjiang Production and Construction Corps:

In accordance with the “Opinions of the General Office of the State Council on Strengthening Performance Assessment of Grade-III Public Hospitals” (Guobanfa [2019] No. 4, hereinafter referred to as the “Opinions”), in 2019 our bureau, in collaboration with relevant departments, conducted an analysis of 34 national performance-assessment monitoring indicators based on the 2018 data from Grade-III public TCM hospitals nationwide. The findings of the national monitoring and analysis for Grade-III public TCM hospitals are hereby communicated as follows.

I. Scientifically and Orderly Advancing Performance Appraisal Work

The State Administration of Traditional Chinese Medicine has rigorously organized and implemented performance assessments for TCM hospitals, integrating the assessment of tertiary public TCM hospitals with that of tertiary public general hospitals in terms of planning and execution.

(1) Adjust and supplement TCM-specific monitoring indicators. Based on the functional positioning of tertiary public TCM hospitals, with a strong emphasis on the intrinsic essence of TCM, and by reinforcing a hospital management model and service delivery system that prioritizes TCM services, the “Performance Assessment Indicators for Tertiary Public TCM Hospitals” have been formulated and issued.

(2) Establish a standardized and information-based assessment support system. The “Operational Manual for Performance Assessment of National Level-III Public Traditional Chinese Medicine Hospitals (2019 Edition)” has been formulated, concurrently with the development of a national performance-assessment management platform for such hospitals and the implementation of supporting mechanisms for real-time reporting, safety alerts, technical response, and professional advisory services.

(3) Strengthen policy publicity, interpretation, and personnel training. Remote and online training programs were implemented, and four in-person training sessions were conducted on policy interpretation, data reporting, and data quality control, reaching nearly 1,500 participants. Hotlines, WeChat channels, email addresses, and performance-system consultation portals were established to promptly update and release Q&A manuals. In addition, a collaborative working mechanism was put in place—leveraging WeChat work groups—to facilitate seamless information exchange and sharing among national authorities, provincial governments, and individual hospitals.

(4) Solidly carry out data collection and quality control. Following review and confirmation by the competent TCM authorities of each province, as of the end of 2018, a total of 533 tertiary public TCM hospitals nationwide—comprising 419 TCM hospitals, 64 hospitals integrating TCM and Western medicine, 28 ethnic-minority medicine hospitals, and 22 specialized TCM hospitals—participated in the 2018 performance assessment. Experts in medical records, finance, clinical practice, and hospital management were convened to conduct rigorous professional quality control and statistical analysis of the relevant data, thereby effectively ensuring the authenticity, objectivity, and impartiality of the assessment results.

(5) Implement the principal responsibility of relevant entities.

In response to issues identified through data quality control, our bureau has urged all local authorities and hospitals to carry out rectification within a specified timeframe. We conducted centralized training and guidance for 225 hospitals with problems on the front page of medical records, and reduced the corresponding indicator scores for 25 of these hospitals that failed to attend the training as required and were found to have data quality issues.

II. National Monitoring and Analysis Situation

According to the indicator data, tertiary public TCM hospitals have further implemented their functional positioning, actively leveraged the distinctive strengths of TCM, and gradually established a new operational mechanism that upholds public welfare, motivates staff, and ensures sustainability, thereby advancing toward the goal of “three transformations and three improvements.”

(1) Functional positioning is being steadily implemented.

Tertiary public TCM hospitals emphasize the distinctive features of traditional Chinese medicine and actively employ TCM techniques and methods in clinical diagnosis and treatment.

1. The distinctive features of TCM are increasingly evident. In outpatient medical services, in 2018 the utilization rate of traditional Chinese medicine decoction pieces among outpatients was 30.33%, with 21.90% of outpatient prescriptions for such pieces dispensed in bulk or in small packages; the proportion of outpatients receiving non-pharmacological TCM therapies was 14.21%. All these figures represent increases compared with 2016. In inpatient medical services, the utilization rate of traditional Chinese medicine decoction pieces among discharged patients was 59.48%, an increase of 8.09 percentage points from 2016; among hospitals, 373 reported a utilization rate exceeding 50%, accounting for 69.98% of all hospitals. The proportion of discharged patients receiving non-pharmacological TCM therapies was 64.42%, up 12.44 percentage points from 2016; of these, 371 hospitals reported a utilization rate above 50%, representing 69.61% of all hospitals.

2. The volume of medical services continues to increase. In 2018, tertiary public TCM hospitals nationwide recorded 273 million outpatient visits and 12.32 million inpatient admissions, representing increases of 5.78% and 18.48%, respectively, compared with 2016, reflecting the growing public demand for high-quality TCM medical services. The top three provinces in terms of service volume were Guangdong Province, Jiangsu Province, and Zhejiang Province.

3. The effectiveness of the tiered diagnosis and treatment system is gradually becoming apparent. In 2018, tertiary public TCM hospitals referred a total of 1.3423 million outpatients and inpatients to lower-level facilities, representing a 52.04% increase compared with 2016. Tertiary public TCM hospitals are progressively aligning their referral practices with their designated functional roles, referring appropriate patients to lower-level institutions to enhance the efficiency of healthcare resource utilization.

(2) Continuous enhancement of medical quality and safety.

1. The level of patient safety is high. In 2018, the incidence of postoperative complications among surgical patients was 0.31%, and the rate of surgical site infections for Class I incisions was 0.67%, both of which have remained consistently low over the past three years.

2. The comparability of clinical laboratory tests continues to improve. In 2018, the participation rate in inter-laboratory quality assessments among national tertiary public traditional Chinese medicine hospitals was 66.9%, an increase of 9.5 percentage points compared with 2016; the pass rate for these assessments was 96.4%, up 0.3 percentage points from 2016, thereby laying the foundation for reducing clinical laboratory testing costs, preventing potential medical disputes, and enhancing the comparability and homogeneity of test results.

3. Clinical medication use is becoming more rational. In 2018, the average antimicrobial use intensity in tertiary public traditional Chinese medicine hospitals nationwide was approximately 35.72 DDDs, a 6.54% decrease from 2016 and below the national target of 40 DDDs. The proportion of reviewed prescriptions relative to the total number of prescriptions, the review rate of physician orders (prescriptions) in wards (units), as well as the number and proportion of essential medicines procured, have all increased year by year. Excluding prescriptions for processed Chinese medicinal herbs, the proportion of essential medicine prescriptions among outpatients reached 42.80%, the utilization rate of essential medicines among inpatients reached 91.78%, and the proportion of centrally procured drugs winning bids under the national centralized procurement program reached 92.72%.

(3) Hospital operations and internal management continue to improve.

1. Continuous improvement of internal management capabilities. In 2018, 517 of the nation’s tertiary public traditional Chinese medicine hospitals participated in the tiered assessment of electronic health record application functionality, achieving a participation rate of 97.00%. In the same year, the positive detection rate for large-scale medical equipment reached 85.19%, an increase of 4.8 percentage points compared with 2016.

2. Continuous optimization of service processes. In 2018, the average appointment-based consultation rate for outpatients at tertiary public TCM hospitals nationwide was approximately 30.81%, an increase of 10.12 percentage points compared with 2016. The average waiting time after making an appointment for outpatient visits in 2018 was 22.07 minutes, a reduction of 4.24 minutes compared with 2016, reflecting improvements in the delivery of medical services.

3. The growth rate of medical expenses has stabilized. In 2018, the average outpatient and inpatient charges per visit increased by 6.15% and 4.48%, respectively, but these increases were lower than the GDP growth rate for the same year, indicating a deceleration in the pace of cost growth. Meanwhile, the average drug costs per outpatient visit and per inpatient stay decreased by 1.06% and 6.76%, respectively, reflecting an overall stable trend in the growth of pharmaceutical expenses at tertiary public TCM hospitals and effective control of irrational cost increases.

4. The revenue and expenditure structure continues to improve. Following the elimination of markups on pharmaceuticals, tertiary public TCM hospitals have established a new compensation mechanism through direct fiscal funding and adjustments to medical service prices. Over the past three years, their operational surpluses have remained broadly stable, demonstrating a clear structural adjustment effect achieved through “replacing the old with the new.” The revenue mix has gradually improved: the share of medical service revenue (excluding revenue from drugs, consumables, and diagnostic tests) in total medical revenue rose from 25.21% in 2016 to 29.39% in 2018, reflecting the continuous enhancement of the value of technical and labor services. Energy consumption costs per RMB 10,000 of revenue (including water, electricity, and heating) declined steadily from RMB 122.39 in 2016 to RMB 108.84 in 2018. Tertiary public TCM hospitals are progressively transforming their management models, strengthening refined management practices, rationally reducing operating costs, and continuously advancing the development of resource-efficient hospitals.

5. The proportion of direct fiscal investment has increased. In 2018, direct government funding accounted for 9.74% of total expenditures at tertiary public TCM hospitals, an increase of 0.63 and 0.53 percentage points compared with 2016 and 2017, respectively. Among the 31 provinces, 14 exceeded the national average, while 17 fell below it. The five provinces with the highest share of direct government funding were the Tibet Autonomous Region, Qinghai Province, Ningxia Hui Autonomous Region, Inner Mongolia Autonomous Region, and Jilin Province.

(4) The mechanism for sustainable development continues to be improved.

1. The personnel structure is basically reasonable. In 2018, the proportion of licensed physicians in the traditional Chinese medicine (TCM) category among all physicians in national tertiary public TCM hospitals was 59.50%, essentially meeting the benchmark requirement of 60%. The nurse-to-physician ratio in these hospitals in 2018 was 1:1.25, thereby achieving the target set forth in the National Plan for the Development of the Medical and Health Service System. Furthermore, 86.04% of nursing staff had systematically received training in TCM knowledge and skills, significantly exceeding the minimum requirement of 70%. The average daily outpatient workload per licensed physician and the average daily inpatient workload per licensed physician have both declined year by year. Among health technical personnel, the proportion holding associate senior or higher professional titles stood at 15.72%, an increase of 1.22 percentage points compared with 2016.

2. Personnel development capabilities have improved. Over the years, the total number of trainees enrolled in hospital-based advanced studies and the number of participants in education and training programs have steadily increased, leading to a continuous strengthening of the faculty. Meanwhile, the number of individuals participating in mentorship programs at various levels, the number of teaching papers published, and the financial investment in medical talent development have all risen annually. In 2018, the first-time pass rate for resident physicians from national Grade-III public TCM hospitals in the physician qualification examination reached 82.32%, an increase of 2.37 percentage points compared with 2016.

3. Research and innovation capabilities have been strengthened. In 2018, 76.17% of tertiary public TCM hospitals received research funding. The hospitals with the largest total research funding nationwide were Shuguang Hospital Affiliated to Shanghai University of Traditional Chinese Medicine, Longhua Hospital Affiliated to Shanghai University of Traditional Chinese Medicine, Dongzhimen Hospital of Beijing University of Traditional Chinese Medicine, Hubei Provincial Hospital of Traditional Chinese Medicine, and Guangdong Provincial Hospital of Traditional Chinese Medicine.

4. The “Two Permits” policy is being actively implemented. The share of personnel expenses in total operating expenses increased from 33.61% in 2016 to 36.61% in 2018. Tertiary public traditional Chinese medicine hospitals have explored internal performance appraisal methods to scientifically evaluate the work contributions of medical staff, continuously optimized the structure of personnel expenditures, and implemented a system that rewards superior performance and recognizes greater effort with higher compensation.

(5) Patient satisfaction is at a high level.

In 2018, the satisfaction scores for outpatients and inpatients at tertiary public TCM hospitals nationwide were 84.51 and 89.97, respectively. The five provinces with the highest outpatient satisfaction were Anhui Province, Jiangsu Province, Guangxi Zhuang Autonomous Region, Hunan Province, and Chongqing Municipality; the five provinces with the highest inpatient satisfaction were Jiangsu Province, Henan Province, Shandong Province, Tianjin Municipality, and Shanghai Municipality. Notably, Jiangsu Province recorded relatively high satisfaction levels among both outpatients and inpatients. Among outpatients, satisfaction was highest with “nurse communication,” while among inpatients, satisfaction was highest with “the attitude of medical staff toward patients’ family and friends.”

III. Major Issues Identified Through Performance Appraisal

(1) The imbalance and inadequacy in the development of tertiary public TCM hospitals nationwide are quite pronounced. The tertiary public TCM hospitals that achieved relatively favorable monitoring and analysis results are predominantly provincial-level TCM hospitals or city-level TCM hospitals in some economically developed regions. In contrast, county-level TCM hospitals—although also classified as tertiary institutions—demonstrate a substantial gap in both their medical service capabilities and overall performance compared with provincial-level TCM hospitals. From the perspective of functional positioning, assessment data reveal that a small number of hospitals with strong comprehensive service capabilities and high service volumes have failed to serve as model leaders in leveraging the distinctive strengths and advantages of TCM; in fact, some of these hospitals even lag behind certain smaller facilities with comparatively weaker overall service capacities.

(2) The level of refined management within the hospital still needs to be improved. First, the current level of electronic health record application functionality in tertiary public TCM hospitals is generally low, with a national average score of 2.28; only three hospitals have reached Level 5, which is far short of the requirements for system integration, unified data management, and intelligent applications. There is insufficient emphasis on data management, resulting in poor quality of TCM medical record front-page data reporting, with some hospitals submitting front-page data that contain logical errors or missing entries. Second, the level of outpatient informationization in hospitals is low, and certain data that reflect the functional positioning of TCM hospitals and the distinctive strengths of TCM cannot be directly extracted. Third, these hospitals face certain financial pressures and potential risks. Although the overall financial performance of tertiary public TCM hospitals remains stable, 29.31% still report negative revenue–expenditure balances, indicating that implementing the public hospital compensation mechanism and strengthening operational management remain challenging tasks. Approximately half of the hospitals have an asset–liability ratio exceeding 50%, placing considerable pressure on resolving long-term debts that comply with regulations; moreover, the requirement to “strictly prohibit public hospitals from borrowing to finance construction” has not been fully enforced.

(3) Medical services still require further improvement. In 2018, outpatient patients at tertiary public TCM hospitals nationwide reported relatively low satisfaction with “healthcare staff’s protection of patients’ personal privacy,” while inpatient patients expressed lower satisfaction with “the quality of meals provided to inpatients.” In addition, there remains considerable room for improvement in areas such as “environment and signage” as perceived by outpatients and “physician communication” as perceived by inpatients. Tertiary public TCM hospitals must continuously promote the high-quality development of medical services, thoroughly implement the Action Plan for Further Improving Medical Services, and consistently enhance the public’s healthcare experience and sense of satisfaction with medical care.

(4) The motivation of medical personnel still needs to be further enhanced. In 2018, the satisfaction of medical staff at tertiary public traditional Chinese medicine hospitals nationwide was significantly lower than that of outpatients and inpatients during the same period. Medical staff reported the highest satisfaction with “peer relationships,” while their satisfaction with “job content and work environment” and “compensation and benefits” was relatively low. Consequently, there remains a substantial challenge in further enhancing medical staff satisfaction, boosting their motivation, and ensuring high-quality medical services.

IV. Job Requirements

(1) Strengthen organizational leadership. All provincial-level authorities responsible for TCM shall fully recognize the critical importance of conducting performance assessments of tertiary public TCM hospitals, earnestly implement the major decisions and arrangements of the Party Central Committee and the State Council, and, in accordance with the specific requirements set forth in the “Opinions,” strengthen organizational leadership, make scientific use of performance assessment results, establish a reward-and-punishment mechanism linked to such assessments, leverage the guiding role of performance assessment, ensure that assessment work is effectively carried out, and motivate public TCM hospitals to actively and proactively fulfill healthcare reform tasks and achieve high-quality development.

(2) Strengthen hospital management. Performance assessment liaison officers from provincial-level TCM administrative departments and relevant tertiary public TCM hospitals may log in to the Public Hospital Performance Assessment Management Platform to access analyses of national monitoring indicators for their respective provinces and hospitals. All provinces and hospitals should adopt a problem- and needs-oriented approach to identify gaps in hospital management and medical services, further strengthen hospital governance, refine policies and measures that support the sustained and healthy development of public TCM hospitals, leverage the distinctive strengths of TCM, enhance both the quality of medical services and the level of hospital management in public TCM hospitals, and continuously meet the public’s demand for TCM services.

(3) Conduct effective publicity and guidance. All provincial-level TCM administrative authorities shall guide tertiary public TCM hospitals to adopt a proper perspective on performance assessment, shifting their focus from external ranking metrics to strengthening internal management and service delivery. They should promptly summarize best practices, leverage performance assessment data to identify and promote exemplary models, harness the demonstrative and leading role of these models, and thereby foster a favorable environment for both performance assessment of public TCM hospitals and their healthy development.

Office of the State Administration of Traditional Chinese Medicine

June 29, 2020