A new plan to standardize health insurance payouts to hospitals aims to stop doctors from overprescribing medicine and treatments, Beijing Evening News reported Tuesday.

As part of the country’s ongoing health care reforms, China’s Ministry of Human Resources and Social Security on Monday released a list of 130 medical conditions. Each province, municipality, and autonomous region is encouraged to confer with experts to select at least 100 conditions from the list, and for each one standardize both treatment and a corresponding subsidy. Payment standards can differ from province to province according to local health care costs, the ministry added.

Most of the 130 conditions on the ministry’s list — such as gall stones, cancers, and heart disease — can require surgery. But there are also conditions that don’t require invasive procedures, such as leukemia, which can be treated with chemotherapy, and hemorrhoids, for which traditional Chinese medicine is often prescribed.

In June of last year, the ministry stressed the importance of a complete system overhaul to tackle longstanding problems such as doctors overprescribing medication to treat relatively minor illnesses — a trend from which both doctors and hospitals can benefit, the former by receiving kickbacks from drug companies and the latter by profiting from sales.

While previous regulations have addressed this issue by making it harder for hospitals to profit from prescribing medication, the new plan should take things a step further — or even eliminate the phenomenon altogether.

According to the Ministry of Human Resources and Social Security, over 743 million people were covered under the national health insurance scheme by the end of 2016, the most recent year for which this figure is available. That year, the scheme covered at least 70 percent of eligible citizens’ medical fees.

“A considerable portion of our current health insurance resources is wasted,” Cai Jiangnan, director of the Center for Healthcare Management and Policy at China Europe International Business School in Shanghai, told Sixth Tone. Cai added that the new plan should curb some of this waste by removing incentives for overtreating patients.

Cai said that, in theory, the new plan is a step in the right direction, but pointed out that patients with the same disease may exhibit different symptoms, or be in different stages of treatment — and so the medical fees they incur will not be the same.

Cai also warned that smaller hospitals could be at risk of exceeding the provincial subsidy standards — though the institutions themselves would be on the hook for the difference between reimbursed cost and actual cost. “In any event, the plan won’t be a burden to patients,” Cai said.

Additional reporting: Cai Yiwen; editor: David Paulk.

(Header image: A woman checks her registration paperwork at a hospital in Shanghai, March 31, 2011. Yang Yi for Sixth Tone)