On November 11, the National Medical Insurance Administration and the Ministry of Finance jointly issued the "Notice on Doing a Good Job in Prepayment of Medical Insurance Funds", which clearly stated that a prepayment system should be established, which will be used specifically for medical expenses such as the purchase of drugs and medical consumables. The prepayment scale of medical insurance prepayments is about 1 month, and it shall not be used for non-medical expenses such as medical institution infrastructure investment, daily operation, and debt repayment.

For a long time, the "difficulty in collecting payments" in hospitals has been a "long-standing" problem that pharmaceutical companies have to face. Especially after the epidemic, the income of some medical institutions has been affected, and the problem of capital shortage is obvious. After receiving local financial subsidies, they often choose to ensure the core operating funds first and delay the payment of procurement funds, which has aggravated the difficulty of pharmaceutical companies in recovering accounts. The "Statistical Analysis Report on the Operation of the Pharmaceutical Distribution Industry in 2023" published by the Ministry of Commerce a few days ago (November 7) mentioned: "The problem of medical institutions owing money to pharmaceutical wholesale companies has not improved" and "the financial pressure and financial cost burden of pharmaceutical wholesale companies are increasing."

Data shows that in 2023, the number of days for pharmaceutical wholesalers to collect accounts receivable from medical institutions will continue to increase, reaching an average of 152 days, 2 days more than in 2022, and close to the highest value in the past five years (153 days). From 2019 to 2023, the number of days for pharmaceutical wholesalers to collect accounts receivable from medical institutions is 152 days under the industry average collection cycle, and a considerable number of companies have actual accounts payable for more than 1 year. When responding to investors about the 2023 annual report, one company mentioned that its actual account period with many hospitals reached 18 months, which was 14 months longer than the contractual period. There are also some hospitals whose contracts do not clearly stipulate the account period, and the actual account period exceeds 20 months. The joint establishment of the advance payment system for specified purposes by the two departments may reduce the generation of "bad debts".

Since the implementation of the "4+7" volume-based procurement policy, the overall level of drug prices has been effectively controlled, and the profit margins of pharmaceutical companies have also been compressed. If the payment cycle of medical institutions continues to extend, pharmaceutical companies will not only face the turnover pressure of funds being occupied for a long time, but also bear the corresponding capital costs themselves, and the difficulty of operation will be further increased. Recently, a pharmaceutical company stated in the latest disclosed third-quarter report that the decline in its net profit during the reporting period was mainly due to the delay in the collection of accounts receivable and the corresponding increase in capital costs. However, in the market environment with intensified competition, many pharmaceutical wholesale companies will give more relaxed account payment cycles to maintain cooperative relations with medical institutions, and some will take the initiative to extend the account period to more than 1 year. This form can increase the stickiness of hospital customers and ensure market share in a certain period of time, but as accounts receivable accumulate, the cash flow risk of enterprises will also double.

In addition to the medical insurance prepayment system required by the National Medical Insurance Administration and the Ministry of Finance this time, this year, many national-level units have successively issued documents mentioning the collection issue. In October, the General Office of the CPC Central Committee and the General Office of the State Council issued the "Opinions on Solving the Problem of Arrears of Enterprises", which clearly stated that it is necessary to strengthen the supervision of government investment projects and project funds. Regularly check the availability of funds and track the disbursement of funds. Strengthen the supervision of government procurement payments. It is also necessary to strengthen the research on the causes of arrears and prevention and resolution measures in key areas and key industries, and work together to solve the problem of arrears of enterprise accounts. Improve the mechanism for punishing dishonesty. Strengthen audit supervision. In June, the State Council also proposed in the "Key Tasks for Deepening the Reform of the Medical and Health System in 2024" that "promoting the high-quality development of public hospitals" should strengthen the debt risk management of public hospitals and guide and promote the orderly classification and resolution of long-term debts of public hospitals in various places. In May, the National Medical Insurance Administration also mentioned in the "Notice on Strengthening Regional Coordination and Improving the Quality and Expansion of Centralized Procurement of Medicines in 2024" that "improving the implementation mechanism and enhancing the effectiveness of the centralized procurement system" is one of the current key tasks, including unblocking the feedback channels for supply and quality issues, "notifying and interviewing medical institutions that do not open access channels to the selected products that have signed agreements and do not return the payment on time, and further handling those that have not made rectifications in place in accordance with regulations together with relevant departments".

At the same time, various provinces have introduced a number of specific measures under the guidance of various documents, mainly focusing on promoting direct settlement and optimizing settlement processes. For example, Inner Mongolia has created a "medical enterprise-bank direct connection" model, and through the unified settlement account of the medical insurance fund, it ensures that the collection period of centralized procurement drugs and consumables does not exceed 30 days; Guangxi requires medical consumables to be settled before the end of the month after acceptance, and fully implements the online direct settlement system this year to further shorten the payment time; Guangdong, Shandong, Fujian, Jiangxi, Hunan and other places are also gradually promoting direct settlement of medical insurance funds to speed up payment. In terms of process, some medical insurance departments have implemented a prepaid working capital system. For example, Hunan, Jiangxi, Guangxi and other places stipulate that 30% to 50% of the medical insurance fund amount should be prepaid every month according to the actual purchase volume to support medical institutions to pay pharmaceutical companies in a timely manner. Hunan has also realized full-process online management, simplified the reconciliation process between medical institutions and distribution companies, and reduced the manpower burden. With the implementation of the direct settlement policy and the optimization of the settlement process, the difficulty of pharmaceutical companies in collecting payments may be alleviated. However, the establishment of new systems and processes has put forward higher requirements on the management level and execution capabilities of each unit. The balance between the operational needs of medical institutions and pharmaceutical companies needs to be continuously explored in practice.

https://mp.weixin.qq.com/