Xi’s Healthcare Reform: Quality Care for China’s Citizens
President Xi Jinping has reaffirmed his commitment to deepening China’s healthcare reform, with a renewed focus on making quality medical services accessible to residents in their local communities. The initiative, highlighted in a People’s Daily report published June 21, aims to reduce the burden on major hospitals by strengthening primary healthcare facilities and improving the distribution of medical resources across urban and rural areas.
The Sanming Model: A National Blueprint
At the heart of this reform push is the Sanming model, a pioneering approach that began in 2012 when the city in Fujian Province faced a severe medical insurance fund deficit. Sanming developed the “Three Medical Linkages” — coordinating medical services, medical insurance, and pharmaceutical systems into an integrated framework. What started as a local crisis response has evolved into a national template for healthcare transformation.
President Xi visited Sanming’s Shaxian General Hospital in March 2021, where he emphasized the need to “continue to deepen the reform of the medical and health system, balance the distribution of quality medical resources, improve grassroots infrastructure conditions, and provide reliable guarantees for the people’s health.” The visit elevated Sanming’s experiment from a local initiative to a nationally endorsed strategy.
Quantifiable Results
The Sanming model has produced measurable outcomes. From 2011 to 2025, drug and consumable costs across all secondary and above public hospitals in the city increased by only 82 million yuan — a remarkable containment. The drug and consumable revenue share dropped from 60.08% to 29.11%, while medical service revenue share rose from 18.37% to 51.11%, according to data reported by Guangming Daily.
Average life expectancy in Sanming has reached 80.59 years, surpassing the national average of 79.25 years. The city’s medical insurance fund has maintained surpluses for multiple consecutive years — a stark contrast to the deficit that originally sparked reform.
2026 Policy Blitz
The year 2026 has seen an unprecedented acceleration in healthcare reform. Within a single month, China released three major national policies: Guidance on Medical Insurance Supporting Grassroots Healthcare Services, the Three-Year Action Plan for Medical Quality Improvement in Grassroots Institutions (2026-2028), and State Council Measures on Accelerating the Construction of a Tiered Diagnosis and Treatment System.
Jin Chunlin, Director of the Shanghai Health and Development Research Center, told Economic Reference News that “the three major healthcare-strengthening policies were intensively implemented within less than a month, delivering a combined punch for grassroots healthcare with the momentum of three-medical coordination.”
The Three-Year Action Plan, reported by People’s Daily, outlines a phased rollout: covering central township health centers and community health centers with 30-plus beds by the end of 2026, expanding to all township health centers and community health centers by 2027, and reaching village clinics and community health stations nationwide by 2028.
From Treatment-Centered to Health-Centered
A fundamental shift underpins the reform: moving from a “treatment-centered” to a “health-centered” approach. Zhou Xianbao, Deputy Director of the Sanming Health Commission, explained the philosophy: “In the past, our energy was mainly spent on treating diseases. Now we spend money on prevention. For a hypertension patient under standardized management for one year, what’s reduced in medical insurance expenditure is hospitalization fees and surgery costs, and what the masses suffer less is pain — no matter how you calculate it, this is worthwhile.”
This paradigm shift is enabled by structural changes. County medical communities — integrated networks linking county hospitals, township health centers, and village clinics — allow for coordinated care. Financial incentives reward prevention rather than treatment volume. In Sanming, doctors’ compensation was delinked from prescriptions through a position-based annual salary system introduced in 2021.
National Conference Sets Direction
At the National Conference on Deepening Medical Reform in Guangzhou in April 2026, Yang Jianli, Director of the Medical Reform Department at the National Health Commission, outlined the strategic direction: “Grasp the structural adjustment direction of strengthening primary, stabilizing secondary, controlling tertiary, allowing tertiary hospitals to return to their function of diagnosing difficult and severe cases, and allowing secondary hospitals and grassroots institutions to become the gatekeepers of the people’s health.”
The conference, covered by Xinhua News Agency, highlighted that over 95% of public hospitals have implemented the party committee-led director responsibility system, and the proportion of primary healthcare institution visits has reached 52.6% nationwide.
Investment and Infrastructure
The National Development and Reform Commission allocated 340 million yuan in central budget investment for three Sanming hospital construction projects in March 2026, according to the research. This investment targets medical facility upgrades and service capacity expansion, further enabling the flow of quality medical services to grassroots levels.
Challenges Ahead
Despite the progress, experts acknowledge significant challenges. Jin Chunlin noted that policy implementation faces three key obstacles: grassroots talent shortages, sustainable operation of medical insurance funds under an aging population, and the need to shift traditional patient就医 habits.
Patient concerns about generic drugs have also emerged. Some patients question whether lower-cost medications are as effective as branded alternatives. Sanming’s response has been twofold: family doctors explain bioequivalence to patients, while a drug adverse reaction monitoring network provides data-driven reassurance.
A Model for the Future
Zhan Jifu, former Director of the Sanming People’s Congress Standing Committee and a key architect of the reform, summarized the ultimate goal: “If residents in the jurisdiction get sick less, it shows our health management is in place.”
China has built the world’s largest medical and health system, with a national average life expectancy of 79.25 years. The Sanming model’s nationwide replication represents one of the most ambitious healthcare transformations in modern history — a systemic shift from treating illness to preserving health, from hospital-centered care to community-rooted wellness.
As the 15th Five-Year Plan prioritizes health, and with AI and digital health technologies enabling specialist care at the grassroots level, China’s healthcare reform enters a new phase. The question now is whether the Sanming model can be successfully scaled across China’s vast and diverse provinces — a challenge that will define the nation’s health trajectory for decades to come.