In Depth: Shanghai’s Struggle to Unclog Its Hospitals

Shanghai has launched a comprehensive reform of its healthcare services focusing on expanding community care centers to address the healthcare demands of its aging population. This reform aims to create an efficient hierarchical medical system, as the COVID-19 pandemic highlighted both the strengths and weaknesses of community healthcare services. During the pandemic, community fever clinics managed over 60% of cases, alleviating pressure on higher-tier hospitals, but revealed issues like insufficient diagnostic capabilities, equipment shortages, and a lack of qualified doctors, which hindered confidence in these centers [para. 1][para. 2][para. 3].

In response, Shanghai introduced the "Implementation Plan for Further Improving the City’s Community Health Service Capacity" in April 2023. This plan outlines key measures such as redistributing appointment slots to strengthen the city's primary healthcare system. However, challenges remain regarding whether large hospitals will cooperate in directing patients to community clinics and if these centers can effectively manage increased patient volumes [para. 4][para. 5].

One significant reform is the policy of redistributing appointment slots, which allocates 50% of specialist appointments in top-tier hospitals for community health service centers five days in advance. This policy aims to strengthen the connection between patients and grassroots medical institutions, encouraging primary care at community centers, as illustrated by a patient’s successful experience in securing an appointment with a specialist through her community health center [para. 6][para. 7][para. 8][para. 9][para. 10][para. 11].

Despite this initiative, attracting patients to community healthcare centers remains a challenge, as many patients prefer large hospitals due to perceived inadequacies in community facilities. The share of patient visits and hospitalizations at grassroots institutions has declined since the healthcare reform began in 2009. Resource shortages, such as a limited range of medications and fewer healthcare workers, exacerbate this problem, despite efforts to broaden community healthcare services [para. 12][para. 13][para. 15][para. 16].

Shanghai's healthcare reforms show promising results, with a rise in community outpatient visits by 5.9 million from the previous year, representing 38.9% of all outpatient care as of June 2024. However, this falls short of the city's goal for community clinics to manage over 40% of visits by 2025 and even further from the national target of 65% [para. 17][para. 18]. The reluctance of patients to choose community health centers and the reluctance of larger hospitals to refer patients to these centers continue to be significant barriers [para. 19][para. 20].

The Diagnosis-Related Groups (DRG) payment system reform, aimed at incentivizing appropriate hospital resource allocation, may inadvertently discourage referrals to community clinics, favoring large hospitals' financial interests instead. Experts suggest that realigning the healthcare system to focus on patient needs rather than hospital profits is essential. The Luohu district's integrated model in Shenzhen, which allows for shared management across healthcare facilities and flexibility for healthcare workers, is noted as a potential model for Shanghai to emulate [para. 21][para. 22][para. 23][para. 24][para. 25][para. 26][para. 27].

Ultimately, Shanghai faces a philosophical choice between enhancing hospital profitability and making healthcare more accessible. Innovations in assessment metrics and incentive systems that benefit all stakeholders—state, hospitals, and patients—are crucial for successful reform. This sentiment is echoed by healthcare leaders who emphasize the need for systemic change to achieve these goals [para. 28][para. 29][para. 30][para. 31].