China will spend 9.8 billion yuan ($1.54 billion) to subsidize public hospital reform next year, the Ministry of Finance said in a statement, as the country looks to overhaul its creaking national healthcare system.

China's government, which has been struggling with overcrowded city hospitals, simmering tension between patients and doctors, and widespread bribery in the sector, will spend 11.1 billion yuan to subsidize the reform process in 2015.

The country's much-hyped healthcare reform drive is facing a number of obstacles, including a perceived lack of support from central government and challenges of private firms working within the huge, fragmented public sector.