By Fineline Cube 
The National Healthcare Security Administration (NHSA) released a notice to optimize healthcare fund settlement management, setting a three‑year action plan to accelerate settlement cycles. By 2028, all pooled regions must complete the previous year’s settlement by March 31, with settled funds controlled at ~3% of annual allocations. The plan encourages quarterly settlement models and expansion into serious illness insurance and medical assistance funds.
Three‑Year Settlement Targets
| Year | Settlement Deadline | Settlement Ratio | Pilot Regions |
|---|---|---|---|
| 2026 | End‑May 2026 (national) End‑Mar 2026 (pilots) | ~5% of total allocation | Selected pilot regions |
| 2027 | End‑Apr 2027 (national) End‑Mar 2027 (pilots) | 3‑5% of total allocation | Expanded pilot scope |
| 2028 | End‑Mar 2028 (all regions) | ~3% of total allocation | All pooled regions |
Key Policy Innovations
- Quarterly Settlement: Promotes innovative models to improve cash flow predictability
- Fund Integration: Encourages inclusion of serious illness insurance and medical assistance into accelerated settlement
- Inter‑Provincial Settlement: Gradually shortens settlement cycle for cross‑province medical expenses
- Implementation: Localities with necessary conditions are urged to explore these models
Market & Financial Impact
| Metric | Value | Implication |
|---|---|---|
| Total Healthcare Fund Allocation | ¥3.2 trillion (≈ US$450 B) (2025) | 3% settlement ratio = ¥96 billion (≈ US$13.5 B) in managed float |
| Hospital Cash Flow | Faster settlement improves working capital for 30,000+ hospitals | Reduces accounts receivable aging from 6‑12 months to 3 months |
| IT Investment | ¥8‑12 billion (≈ US$1.1‑1.7 B) needed for settlement system upgrades | Opportunities for healthcare IT vendors |
| Insurance Fund Efficiency | Reduced settlement lag enhances fund utilization and risk management | Supports sustainable financing for serious illness insurance |
Strategic Implications
- For Healthcare Providers: Accelerated settlement reduces financial pressure, enabling reinvestment in services; improves liquidity for primary care and township health centers.
- For Local Governments: Streamlined settlement cycles improve budget planning and reduce year‑end fund volatility; pilot provinces will receive technical support for system upgrades.
- For Private Sector: Healthcare IT companies (e.g., WeDoctor, Ping An Health) and financial institutions can partner with regions to provide settlement‑as‑a‑service solutions and short‑term financing products.
Forward‑Looking Statements
This brief contains forward‑looking statements regarding the implementation timeline, regional adoption rates, and market size estimates for healthcare fund settlement reforms. Actual results may differ due to local execution capacity, fiscal constraints, and system integration challenges.-Fineline Info & Tech