An unhealthy system

Why China needs a massive reform of its healthcare system

An unhealthy system

Intervention required: China's healthcare system needs an overhaul

Healthcare is a thorny political issue in most countries and it is no different in China. It is also a policy area in which Mao’s legacy was a positive one. Forty years ago, more than a million “barefoot doctors” (farmers, factory workers and teachers with at most a year of training) were working across the country, administering basic healthcare and improving sanitation. They were hugely successful; between 1952 and 1985, average life expectancy rose from 35 to 68 years. Infant mortality plummeted from 200 deaths per 1,000 live births to 40.

As ever with Mao, the cult of personality was never far from the policy agenda; some patients are said to have gone under anaesthetic clutching his Little Red Book for courage. But more than 90% of the population is thought to have benefited from access to basic health care financed through the rural farm cooperatives.

The propaganda aside, Mao’s efforts to link medical care to advances in economic growth are altogether more similar to the policy debate today. Of course, expectations of medical treatment are now far higher than in Mao’s day. But Hu Jintao’s government is currently refocusing attention on the living conditions of rural Chinese, hoping to close the quality-of-life gap on many urban residents. Discussions of a broader base for economic growth also refer to a climbing of “the three mountains” (reforms in education, housing and health) that it is hoped will underpin greater domestic consumption.

Healthcare reform is one of the more vigorously debated topics in the Chinese press. There is general agreement that reform is desperately required. World Health Organisation surveys that have scored China close to the bottom of international league tables (that measure spend and “equitable reach” ratios of public health care) are quoted heavily, as is the accepted wisdom that core health provision was fatally undermined by the demise of the rural cooperatives in the 1980s. The advent of the market economy destroyed the barefoot doctor network. The sudden switch from state-funded provision to the user-pays approach was both a psychological and financial shock.

Healthcare today continues to be largely unaffordable for millions of people. The Lancet, in a series of studies on China’s healthcare system published last year, points out that 45% of rural households are estimated to “go without” healthcare or are impoverished by its cost. The cost of a single hospital admission is close to the average annual income in China, for instance. A Ministry of Health survey in 2006 admitted that it was often “expensive and difficult to see a doctor” and acknowledged that almost half of those surveyed were choosing not to receive hospital care because of the expense.

The State Council has tried to improve access to basic care over the last decade, primarily through health insurance schemes set up in a majority of urban prefectures. These efforts are now widening. After an extensive consultation process, a two-year Rmb850 billion ($133 billion) “Implementation Programme to Deepen Medical and Health Reform” was announced late last month. The spending will take China closer to average developing country spends on health as a percentage of national GDP.

Academics like Shen Qunhong, an associate professor at the School of Public Policy and Management of Tsinghua University argue that health reform is not just a question of boosting government spending. A core issue is how best to create efficient domestic health delivery.

Some of the backdrop here is a perceived loss of public faith in the medical profession. Where once the barefoot doctors lived and worked amongst their patients, many Chinese now complain of a growing gulf between care-providers and care-recipients. Perhaps this was unavoidable; as health provision has become a for-profit industry, many patients have become embittered by the associated increase in medical fees and charges. The findings of a 2006 survey conducted by the Chinese Hospital Administration Association complained of a surge in antagonism towards doctors, with numerous instances of patients threatening and assaulting medical staff or refusing to pay bills.

Some within the industry may have deserved a reputation for venality. A much quoted case from 2007, in which ten hospitals in Hangzhou were sent urine samples for testing, is said to be illustrative. Six of them responded diagnosing urinary tract infections, and proposing paid-for remedies. Journalists then revealed that the samples consisted of nothing more than green tea. Still, dubious diagnoses and unnecessary prescriptions will be a hard practice to remedy, analysts say, as mark-ups on medicine are a core source of revenue for health providers.

Stories of medical malpractice fuel newspaper editorials. Last week the China Youth Daily called for more “marketisation” in the industry, in addition to further government investment. Greater patient choice and a break-up of existing health monopolies are essential, the Youth Daily argues. Competition will keep the industry honest, as well as safe.

This all sounds similar to the public-private partnership debate heard in many other countries – somewhat distant from the heroic days of the barefoot brigades. But the Youth Daily is convinced that the government must continue to focus on “requester-oriented” provision in which the population receives a higher subsidy for health insurance schemes, so that it can shop around for care amongst competing providers.

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