A child receives medical treatment at Shenyang Children's Hospital on April 7, 2009, in China's Liaoning province
China is laying out plans to dramatically reform its health care system by expanding coverage for hundreds of millions of farmers, migrant workers and city residents. To fix a system plagued by rising costs and diminishing access, the country is moving away from the market reforms introduced in the 1980s and returning to a more socialist health care system.
The World Bank announced this week that while China's growing economy had lifted a half billion people out of poverty from 1981 to 2004, medical costs remained one of the top financial threats to low-income rural residents. With that burden in mind, Beijing has said it will spend $125 billion over the next three years building thousands of clinics and hospitals and expanding basic health care coverage to 90% of the population. "This commitment to improve equitable access to essential health care for all in China is quite important," says Sarah Barber, a China-based World Health Organization expert on health policy. (See pictures of the deadly Sichuan earthquake of 2008.)
China has faced health care problems for years, but the economic crisis has increased the need for reforms. The lack of an adequate safety net forces Chinese to bank huge sums to cover treatment costs. By building a sounder health care system — with more hospitals and clinics and broader medical coverage — Beijing hopes it can convince consumers to spend more of their savings and boost economic growth.
A key aspect to controlling medical expenses is managing the price of drugs. The government has announced it will set price controls on medicines deemed to be essential, likely based on a list of 300 to 400 drugs recommended by the World Health Organization, the state-run Xinhua news service reported. Since market reforms were introduced in the 1980s, hospitals began relying on advanced procedures and drug sales to make money. Individual spending on pharmaceuticals rose as a result, and experts argue that profits sometimes drive what doctors prescribe. "When drugs take up 50% of health expenditures — two times more than other countries — there is a real problem with cost, access and appropriate use of drugs which is often driven by the profits gained from over-prescription," says Dr. Lincoln Chen, president of the China Medical Board, a U.S.-based foundation that promotes health care in Asia.
China could once boast of great strides in public health during the Maoist era. Through focusing on primary care and prevention, China was able to control widespread diseases such as malaria and schistosomiasis. Although China remained poor and lacked the top-flight facilities of developed nations, it was able to raise life expectancy from 35 in 1952 to 68 by 1982.
As part of the market reforms launched by Deng Xiaoping in 1978, the country privatized vast portions of its health care system. The same market forces that helped China become an economic giant have undermined its health care system. Central government funding plunged, and citizens are expected to make up much of the difference out of their own pockets. During the 1990s alone the average percentage of expenses that individuals had to pay themselves rose to 60%.
Under the latest reforms, annual health care subsidies will increase from about $12 per person to $18. But while the coverage may approach universality throughout China's population, experts say that the country will still have to work on providing quality care. "There remains the challenge to improve access to high quality care," says Barber. "Once patients have access to health services, it is essential to ensure that the quality of health care is high and qualified staff are available."
The government has warned that it doesn't expect to provide "safe, effective, convenient and affordable" health care to all citizens until 2020. Over the first three years of the plan, more than 60% of the costs will be borne by provincial and local governments. That burden will increase after 2011, meaning poorer western regions may be slower to achieve the blueprint's goals. "Health care reform is a long-term process," deputy finance minister Wang Jun told a news conference April 8. "It is impossible to invest the money today and make tangible process tomorrow."
Indeed, as China's policymakers were preparing their reform plans, Beijing newspapers detailed the story of a group of kidney disease patients from around the country. Unable to afford the cost of treatment on their own, they banded together to purchase used dialysis machines that they operated themselves in a residence in the capital's suburbs. The publicity drove local authorities to shut down the illegal clinic. While the patients were offered free treatment at local hospitals, for some it was hardly a relief. One patient named Chen Bingzhi told the Beijing News, "We're afraid that after we've gone home for a little while, will there be anyone who cares about us anymore?"