Government funding accounted for only about 17 percent of the expenditure of the health sector.

According to the Chen, the government will set up hospital monitoring institutions to ensure transparency in management and quality of medical service.

Balance of medical resources

To deal with the "imbalanced" allocation of medical resources, which were concentrated in major urban hospitals, the government is considering relocating or integrating some state-run hospitals. It also wants to beef up efforts towards building more county-level hospitals, Chen said.

The central budget supports the construction of about 2,000 county-level hospitals in the next three years. Work will begin in 2009. The goal is to ensure each county has at least on hospital of national standard, according to the ministry.

China has more than 1,600 counties.

Cities to be selected for pilot reforms

According to Chen, the government is going to select several cities to try out the new reforms. The trial period will last for the next three years. Chen did not give the number or names of those selected cities.

"We expect the pilot program to help us form a general idea and major measures for public hospital reform and lay the basis for the nationwide reform," he said.

These plans announced Thursday are part of the country's long-awaited medical reform plan, Among which, the one on reforms of state-run hospitals is one the most important.

The other areas include medical insurance, basic medicine, grassroots medical service and public health service, and the entire official plan will be issued "in the near future", Chen Zhu said.

The new plans were also a result of public debate. In 2006, 16 ministries and commissions began brainstorming ideas for the new plan.

On October 14 last year, the National Development and Reform Commission (NDRC) issued a draft plan on medical reform on its website for public debate. But it was instantly criticized by the public respondents as being "too general" and "full of empty principles".

As a result, the NDRC received more than 35,000 suggestions in one month. And the Ministry of Health has received more than 200,000 suggestions to date, Chen said.

(Xinhua News Agency January 9, 2009)