In a bid to overhaul a over-burdened healthcare system, China will push patients to seek medical treatment locally where wide gaps between urban and rural care often means people travel hundreds of miles to seek help in cities.
The State Council said plans included improved access and cutting health care fees so that all patients with serious illnesses would receive treatment within their own county by 2017.
The country's health care reforms could reduce steep charges for its citizens, who often save up large "rainy day" funds in case a family member falls ill. The drive is also a lure for investors and firms betting billions of dollars on China opening up a market set to be worth US$1.3 trillion by 2020.
"We are working hard to ensure that the people can get treatment where they are," the State Council statement said.
However, the government is facing big challenges in its drive to overhaul the unpopular healthcare system that is blighted by crowded hospitals, corruption and simmering tension between patients and staff.
The State Council said last month that medical insurance would be expanded to cover all critical illnesses for all urban and rural residents by the end of the year and half of all medical costs would be covered by insurance to "more effectively reduce the burden of medical expenses".
A five-year plan was laid out in March to help overhaul its healthcare system, including increasing the number of doctors and making better use of technology to improve efficiency.