A basic system of drugs has been developed from scratch. A system for the selection, production, supply and use of basic drugs, and cover of them in medical insurance has been put into place. In 2011, the coverage of this system was extended to all grass-roots medical and health-care institutions run by the government, where these drugs were sold at zero profit, practically eliminating the practice of hospitals subsidizing their medical services with drug sales. A national guideline for the clinical application of basic drugs and a formulary have been drawn up to ensure that basic drugs are used according to due procedures at grass-roots medical institutions. A new mechanism has been established for the procurement of basic drugs, under which the basic drugs are to be purchased by provinces. As a result, the prices of basic drugs at grass-roots medical and healthcare institutions have dropped by 30% on average, as compared with those before the reform. The basic drugs have all been included in the list of reimbursable drugs covered by basic medical insurance. Also, efforts have been made to supply basic drugs in an orderly way to village clinics and non-governmental medical institutions at the grass-roots level. The steps of reform have been quickened in drug production and circulation, and the supply of drugs has been better ensured.
Urban and rural grass-roots level medical and health services have been further improved. The government has invested more to ensure the funding for grass-roots medical and healthcare institutions. From 2009 to 2011, the central government invested 47.15 billion yuan to support the building and development of grass-roots level medical institutions. Diverse forms have been adopted to strengthen the ranks of healthcare workers at the grass-roots level, and preferential policies have been made to train and introduce competent personnel for rural and community healthcare. A system of general practitioners (medical workers with sufficient knowledge in all branches of medicine) has been established, under which general practitioners are trained in the regular way; grass-roots medical and healthcare workers are enrolled in training courses for upgrading them to general practitioners; and medical students are specially trained for the needs of central and western urban areas, for which they do not have to pay their tuition fees. A project, known as "ten thousand doctors extending support to rural medical care," has been launched. From 2009 to 2011, over 1,100 Grade-III urban hospitals extended support to 955 rural county-level hospitals every year, and urban medical institutions above Grade II in central and western China granted aid to over 3,600 township hospitals every year, thus helping improve the overall technological level and management of the county and township hospitals. Meanwhile, the mode of medical services has been changed. Touring medical services have been provided in township hospitals; and in the urban districts ranks of general practitioners have been formed and a system of family doctors has been set up. Prevention has been combined with the treatment, measures have been taken to ensure basic needs of the residents to see doctors and make it possible that the diagnosis and treatment of most commonly seen and frequently occurring diseases are performed at the community level. After years of effort, community-level medical and healthcare system has been strengthened; marked changes have taken place to the situation of backward facilities and poor services in rural and remote areas; community-level medical workers have increased in number, and their educational background and knowledge have improved. In 2011, the number of grass-roots medical and healthcare institutions across the country reached 918,000, including 26,000 urban community service centers, 38,000 township hospitals and 663,000 village clinics, and the number of hospital beds reached 1,234,000.