The MOH had earlier promised to hammer out medicare system reforms in 2007.

The meeting decided to transform some public hospitals into community medical service providers that offer basic medical services for community residents and migrant workers.

Minister of Health Gao Qiang said on Monday at the same meeting that the country will improve its medicare system by extending access to reasonably priced medical care and medical insurance in rural areas and urban communities.

The government will pay for the salaries of medicare staff and will increase investment in medical institutions in rural areas and urban communities, so as to reduce medical costs borne by patients, said Gao.

Gao said the government-funded medicare system aims to provide equal medical care for both rural and urban residents, and thus narrow regional differences.

From January to September last year, 140 million farmers benefited from a rural medicare system. Under the system, farmers, local and central government each chip in 10 yuan per year per person to a medical fund. Farmers who contribute to the scheme can then get a certain proportion of their medical expenses refunded, according to Gao.

He added that the country will also improve its medical insurance system to provide better financial support for patients with serious illnesses.

But he said a unified national medical insurance system is not yet on the horizon due to the country's low level of urbanization, widening wealth gap, and vast contrast in regional development.

According to a report by the Chinese Academy of Social Sciences (CASS),medical costs are the biggest burden facing Chinese people. The report shows that 11.8 percent of household expenditure goes on health care, higher than communication and education.

Another national survey on medical services,conducted in 2006, showed 49 percent of Chinese refuse to see a doctor when ill and 30 percent refuse to be hospitalized due to the high cost.

Gao Qiang also called for stricter hospital management and a standardized drug use system at Monday's conference.

"A drug system that guarantees safety and low prices, and a hospital management system which stresses public service instead of commercial profit are essential to improving health in China and the development of China's medicare system," Gao said.