But with no price difference, patients tend to swarm into already crowded large hospitals, even those suffering from a common cold, experts said. Meanwhile, community clinics are underused, resulting in a waste of medical resources.

After modifying the prices for registration, consultation and treatment in the latest reform, more residents, particularly those suffering chronic diseases, began to visit community clinics, Fang said.

Total outpatient visits in community clinics increased by 3.4 percent during the past month over March, according to official data, while visits at large top-level hospitals dropped by 15 percent.

All 3,600 medical institutions in the city, under the new reform, were required to purchase drugs directly from pharmaceutical manufacturers through an open public bidding platform to further reduce prices, he added.

That has helped the capital save 420 million yuan ($60.8 million) in the past month, according to the latest figures available.

Starting in the 1950s, a system to add an average 15 percent to drug prices was implemented at all public hospitals in China to help subsidize hospital operations.

But that led to hospitals prescribing too many medications, and more expensive ones, which contributed to soaring healthcare costs.