China needs to further reform its health system with a number of critical steps to meet the growing health needs of the population and further control spending increases, despite impressive achievements in healthcare reform and rapid progress towards universal health coverage, according to report released on Friday.

These include systemic and institutional reforms and innovation, adoption of a tiered service-delivery system, a return to greater reliance on community health care and less on more expensive hospital care, according to the report, based on a two-year study conducted by the World Bank Group, the World Health Organization, the Ministry of Finance, the National Health and Family Planning Commission, and the Ministry of Human Resources and Social Security of China.

Since the launch of the 2009 health reforms, China has made much progress in this field, including achieving near-universal health insurance coverage in a relatively short period and reducing the share of out-of-pocket expenses—a major cause of disease-induced poverty—in total health spending, according to the report.

To fight the challenges China faces in health care, such as the ageing population and the rise of chronic diseases, the report also recommends that China maintains the goal and direction of its healthcare reform, and continue the shift from its current hospital-centric model that rewards volume and sales, to one that is centered on primary care, focused on improving the quality of basic health services, and delivers more value for money.

"Decades ago, China's innovations in health such as barefoot doctors and cooperative health care showed the world it was possible to improve the health and greatly increase the life expectancy for hundreds of millions of people," said World Bank Group president Jim Yong Kim.

"Today, China can once again lead the way with cutting-edge primary health care reform that puts the patient first and shifts away from expensive hospital care that often does little to improve the health of people. If China institutes these reforms, we believe it will improve the health care system for all Chinese—or one in every six people in the world.

"It's time to put people first," said Margaret Chan, director-general of the World Health Organization. "This means strengthening services at all levels, from community through hospital care back to the community, and linking them more effectively, so people get the care they need every step of the way. It's also time to work more efficiently across sectors, to protect people from risky behaviors like tobacco smoking and unhealthy diet, and prepare them to age healthily."

The report suggests it will take China about 10 years to fully implement the proposed reforms and reach full scale.