Rural Health in China: Briefing Notes Series
China’s Health Sector.Why Reform is Needed
중국 건강 분야: 왜 개혁이 필요한가?
Health systems exist ultimately to improve population health through the timely provision of appropriate health care.
중국 시스템은 궁극적으로 적당한 건강 케어의 공급을 통하여 대중의 건강을 증진시키기 위해 존재한다.
The care must, of course, also be affordable.
케어는 물론 또한 값이 맞아야 한다.
in part because otherwise people will be deterred from seeking care, but also because the pursuit of health cannot be at any price.
또한 어떤 가격에서도 건강의 추구를 하기 때문에 부분적으로 다른 사람은 케어를 찾는 것에서 또한 그만둘 것이다.
Good health is desirable but has to be balanced against other important goals, such as better nutrition, shelter, education, and so on.
좋은 보건은 지속가능하나 더 좋은 영양, 보금자리, 교육등과 같은 다른 중요한 목표와 균형을 맞추어야 한다.
Ideally, therefore, the cost of health care at the point of use will be low enough to
enable households to restore their health and achieve some or all of these other goals.
이상적으로 사용의 면에서 보건 케어의 비용은 가족구성원이 그들의 건강을 회복하고 다른 목표의 몇이나 모든 것을 달성할 만한 충분히 낮아야 한다.
the so-called ‘financial protection’ goal of health systems.
이른바 재정적 보호는 보건 시스템의 목표이다.
This Briefing Note argues that while in the 1960s and 1970s China performed well on both health system objectives, in the 1980s it faltered, and in the 1990s it slipped still further.
이 간단한 노트는 1960년대와 1970년대에 중국이 보건 시스템과 대상자 모두에게 잘 시행해 온 것이고, 1980년대에는 주춤거리고, 1980년대에는 더 많이 빠져있다.
China’s increasingly weak performance is argued to reflect system-wide weaknesses in the health system.
중국의 많은 약한 시행은 보건시스템에서 넓은 시스템의 약점을 반영하도록 논의되었다.
The cost of care has grown rapidly in recent years, deterring use of health services, and putting households who do use services at financial risk.
케어의 비용은 최근 기간 동안 급속하게 증가되고, 보건 서비스의 사용을 중단케 하고, 재정적 위기에 사용하는 가족 구성원들을 놓았다.
The rise in the cost of care has coincided with falling health insurance coverage:
케어의 비용 증가는 건강 보험 범위와 일치한다.
health insurance has all but disappeared in rural areas, and is under a good deal of strain in urban areas.
건강 보험은 시골 지역에서 대부분 사라지고, 도시지역에서는 많은 변형 안에 있다.
The way providers are paid encourages the provision of overly expensive care and
discourages cost-consciousness.
제공자가 지불하는 방식은 고비용 케어의 공급을 지나치게 증가케 하고, 비용 의식을 없게 한다.
And the government is insufficiently engaged in areas where markets are known to perform badly.
정부는 불충분하게 나쁘게 운영되는 것으로 알려진 시장의 지역에 종사해온다.
Tracking health system performance in terms of health outcomes is hampered by a shortage of data that are comparable across countries and over time.
건강 결과로써의 보건 시스템 운영을 추적함은 나라들을 통하여 오랜 시간동안 비교되는 데이터의 부족으로 방해된다.
Child mortality is one indicator that is widely available, and is widely accepted as a
useful summary population health statistic.
아이의 사망률은 널리 사용되는 한 지표이며 인구 보건 통계의 유용한 요약으로써 널리 받아들여진다.
In the 1960s and 1970s, China achieved annual reductions in under-five mortality in excess of 6%, well above the rates achieved by Indonesia and Malaysia, and well above the rates expected of a country with the per capita income China
had at the time (Figure 1).
1960년대와 1970년대에 중국은 5세 이하의 사망률에서 6%가 넘는 매년 감소가 되어, 인도네시아와 말레이시아를 뛰어넘는 증가율이었으나 중국의 일인당 국민 소득을 가진 나라에서 기대되는 비율의 이상이었다.
In the 1980s and 1990s, the picture changed dramatically.
1980년대와 1990년대에는 그림이 극적으로 변화하였다.
While Indonesia and Malaysia achieved yet higher rates of reduction, China’s rate fell.
인도네시아와 말레이시아가 급격한 감소 비율을 달성하고 중국의 영아사망비율은 추락하였다.
China also switched from being an over-performer (its rate of reduction in the 1960s and 1970s exceeded its expected rate), to being an under-performer.
중국은 실행의 이상(1960년대 1970년대의 감소 비율)으로부터 실행미달로 변화하였다.
And while Indonesia and Malaysia exceeded expectations even more spectacularly in the 1990s than they had in the 1980s, China’s performance-relative to expectations-deteriorated yet further.
인도네시아와 말레이시아가 아직 파괴되지 않은 1980년대 중국이 수행한 것보다 기대 보다 더 1990년대에 더 눈부시게 뛰어나게 되었다.
Figure 1: China’s recent history on child
mortality reduction in perspective
Why has China’s performance been deteriorating in absolute terms and relative to
expectations?
왜 중국 시행이 기대에 비교하여 절대적으로 나빠지는가?
The obvious hypothesis is that people who need health care are not getting it when they need it.
그들이 그것을 필요로 할때 건강 케어가 필요한 사람이 그것에 들어가지 않는다는 것은 명백한 가설이다.
The evidence on this is mixed.
이것에 대한 증거는 섞여 있다.
There is actually some encouraging evidence of increased utilization of some key interventions, including prenatal checkups and attended deliveries.
산전의 검사와 분만시설에 등록을 포함한 몇 중요한 개입의 증가된 시설의 명백한 몇 증거가 있다.
But there is also evidence of people in China needing care and not receiving it.
케어가 필요하나 받지 못하는 중국 사람에 대한 명백한 증거도 있다.
Of those interviewed in the 2003 National Health Survey (NHS), 50% (up from 36% in 1993) said they had been ill in the previous two weeks and yet had not sought care.
2003년 국가 건강 조사를 받은 사람 중에서 (1993년은 36%이상)50%가 그들은 지난 2주에 아팠었으나 아직 케어를 찾지 못했다고 말했다.
In the 2003 survey, 30% of respondents said they had not been hospitalized despite having been told they needed to be.
2003년 조사에서 응답자의 30%는 그들이 그럴 필요가 있다고 들었음에도 불구하고 입원하지 못했다고 말했다.
And among those who did go to hospital nearly half discharged themselves against their doctor’s advice.
병원에 간 사람들 중에서 그들 의사의 충고에도 불구하고 그들 자신의 거의 반은 퇴원하였다.
건강 케어를 받는데 장애가 되는 비용
This level of non-use of health care by people who need it begs the question:
건강 케어가 필요한 사람들에게 건강 돌봄의 사용을 못하는 사람은 이런 문제를 요구한다.
Why?
왜인가?
While many factors are undoubtedly important in shaping people’s utilization decisions, one factor comes through as increasingly important-cost.
사람의 이용 결정을 변화하는데 의심할 수 없이 중요한 많은 인자가 있지만, 한가지 인자는 증가하는 필요 비용으로부터 나온다.
Of those in the 2003 NHS who said they should have been hospitalized but weren’t, the majority-fully three quarters in rural areas, and 85% among the poorest fifth of
the population-said the reason was they couldn’t afford it.
2003년 국가 통계조사중에서 입원을 해야 했으나 그렇지 못한 인구의 가장 가난한 사람중에서 85%로 시골 거주자의 3/4인 다수는 이유가 그들이 그것을 지불할 능력이 안 됨이다.
The cost of care in China is indeed high.
중국의 케어 비용은 참으로 높다.
In 2003, a single inpatient spell cost, on average, just under 4000 Yuan, equivalent to 43% of average income.*
2003년 한 입원환자가 평균 사용하는 비용은 4000위안 이하로 평균 소득의 43%에 해당한다.
For someone in the poorest fifth of the population, 4000 Yuan is equivalent to nearly 200% of average income.
인구중 가장 5번째로 가난한 몇사람에게 4000위안은 평균 소득의 거의 200%에 해당한다.
The high cost of care would be less of a problem if Chinese households were protected by health insurance.
만약 중국 가구가 건강 보험에 의하여 보호를 받는다면 케어의 가장 높은 비용은 문제보다 적을 것이다.
But following the de-collectivization of agriculture, health insurance coverage plummeted (on which, more below).
다음에 따르는 농업의 탈 집약으로 건강 보험 범위는 더 이하로 폭락한다.
These high costs therefore have to be met out of pocket.
이런 고비용은 따라서 자기 주머니 속에서 나와야만 한다.
It is not altogether unsurprising, therefore, that there are people in China who need care, but don’t get it.
그래서 케어가 필요한 사람이 그것을 얻지 못하는 사람이 중국에 있어도 비록 놀랄 것은 아니다.
Getting sick. Getting poor
점점 아파지고 점점 가난해짐
Of course, there are also people in China who do seek treatment, but get into financial difficulty as a result.
물론 치료를 찾길 원하는 사람이 있으나, 결과적으로 재정적 어렵게 되는 사람이 있다.
In the 2003 NHS, 30% of poor households said that health care costs were the reason they were in poverty.
2003년 국민 건강 보험에서 가난한 가구의 30%는 건강 케어 비용이 그들이 가난할 때 이유가 된다고 했다.
Urban households in China now spend on average over 7% of their total budget on health care.
중국의 도시 거주민은 건강 케어에 전체 예산의 7%이상을 사용한다.
Household payments for health care are highest as a share of household spending among the poor.
건강 케어를 위한 가구성원의 지불은 가난한 사람 사이에서 가구 지출의 분산으로서 가장 크다.
The high exposure to the risk of medical expenses gets reflected in the savings behavior of rural households in China.
의료 비용의 위험의 고 노출은 중국의 시골 구성원의 저축 행동에 반영된다.
Research shows rural households hold more wealth, and hold more of it in liquid form than they would otherwise.3
연구는 시골 구성원들이 더 많은 부를 가지고 있고, 그들이 그렇지 않은 것보다
This helps households to protect themselves against the financial consequences of health ‘shocks’.
But the evidence suggests that rural households in China (especially poor ones) are not able to completely ‘smooth’ their
consumption when illness or some other factor
causes an income ‘shock’.4
Getting sick, getting poor
Cost.a growing barrier to getting
health care
* Figures taken from presentation made on ‘Equity in
health care among different income groups’ by Tang
Shenglan and Gao Jun at Dec. 2004 MOH seminar on 2003
NHS survey.
So, as with its performance vis-a-vis the goal of
improving health outcomes, China’s health
system vis-a-vis the goal of financial protection
faces some challenges.
So, as with its performance vis-a-vis the goal of
improving health outcomes, China’s health
system vis-a-vis the goal of financial protection
faces some challenges.
In fact, China may well face bigger challenges
in this regard than other countries in the region,
where household health spending.as a share of
total spending.tends to be higher among richer
income groups.5 Further, the fraction of the
population experiencing ‘catastrophic’ health
expenses (defined as expenses that are more
than 25% or 40% of nonfood consumption) is
higher in China than it is elsewhere in the region
(Figure 2). And, in contrast to the situation
elsewhere, those households in China that
experience catastrophic payments are typically
poor ones.6
In fact, China may well face bigger challenges
in this regard than other countries in the region,
where household health spending.as a share of
total spending.tends to be higher among richer
income groups.5 Further, the fraction of the
population experiencing ‘catastrophic’ health
expenses (defined as expenses that are more
than 25% or 40% of nonfood consumption) is
higher in China than it is elsewhere in the region
(Figure 2). And, in contrast to the situation
elsewhere, those households in China that
experience catastrophic payments are typically
poor ones.6
Figure 2: Chinese households are more likely
to experience catastrophic health expenses
than households in neighboring countries
Figure 2: Chinese households are more likely
to experience catastrophic health expenses
than households in neighboring countries
0%5%10%15%20%
ChinaHong Kong SARIndonesiaKoreaPhilippinesTaiwan (China)
ThailandViet Nam% households exceeding threshold40% nonfoodcons.
25% nonfoodcons.
Source: Van Doorslaer, O’Donnell, et al.6
China’s performance on the financial protection
goal may indeed have deteriorated over time.
Household (i.e. private) health spending rose as
a share of the household budget dramatically
during the 1980s and 1990s, especially among
urban households (Figure 3). In real terms,
private spending grew at a staggering average
annual rate of 20% during the 1990s. Public
spending, by contrast, grew at a much more
modest 8% per annum.
Figure 3: Out-of-pocket spending.an ever
larger share of household expenditure
012345678198019851990199520002005% living expenditureurbanrural
Source: China National Health Economics Institute
“China National Health Accounts Digest”, 2002.
The high and rising cost of health care in China
thus poses a major challenge to the health
system.from the point of view of improving
health, but also from the perspective of
providing financial protection against health
‘shocks’. Expanding health insurance is
understandably seen as one of the obvious
responses to this challenge.
In urban areas, coverage in the government
schemes.LIS and GIS, and more recently the
new consolidated BMI scheme.steadily
declined during the period 1993-2003, falling
below 40% in 2003 (Figure 4) and 12% among
the poorest fifth of the urban population.* In
rural areas, coverage is far lower.below 20%
in 2003. Coverage increased somewhat between
1998 and 2003, due to increased coverage in
CMS and private (commercial) insurance
schemes.
It is not just the number of people covered by
health insurance that has been falling. The depth
of coverage has also been declining (Figure 5).
By 1997, insured patients were paying more
than one third of their inpatient costs out of their
own pockets. For outpatient costs, they were
Expanding and deepening health
insurance
* Figures for urban 2003 are from ‘Health Services
Utilization and Urban Health Insurance Reform in China’,
presentation made by Ling Xu of MOH at Dec. 2004 MOH
seminar on 2003 NHS survey. Figures for rural 2003 are
from Main Findings from the 3rd NHS Survey,
www.moh.gov.cn, accessed on April 21st, 2005.
† The CHNS sample is not statistically representative of the
Chinese population but does cover a broad spectrum of
China’s provinces, and draws from the urban and rural
populations.
paying nearly two thirds, up from just 30% in
1987.7
Figure 4: Health insurance coverage in China
has been falling
01020304050607080199319982003199319982003insurance coverage %
OtherCollectivePrivate insur.
CMSGIS, LIS, BMI
Urban Rural
Source: National Health Survey2,*
Figure 5: Reimbursement rates for inpatient
care have also been falling
01020304050607080901987199119931997reimbursement rate %
GIS/LISDependentCollective Special / otherOverallSource: China Health and Nutrition Survey†7
The recent history of the urban schemes
contains important lessons.not just for the
future development of urban insurance but also
for health insurance in rural areas too. One of
these is the experience with cost-sharing
measures aimed at curbing insurance costs. One
popular demand-side measure has been the
Medical Savings Account (MSA), the idea
being to give the patient an incentive to limit his
demand for services. However, it is not clear
how successful this approach can be in a system
like China’s where providers have strong
financial incentives to generate demand for their
services (see below).8 There is also a downside,
namely that MSAs reduce financial protection.
not only through higher co-payments, but also
through the cap on payments from the social
pooling account that has been introduced in
many cities.
While important, the challenge of extending and
deepening health insurance coverage in cities is
small compared to China’s huge challenge of
providing coverage to the uninsured 80% of
China’s rural population, which accounts
currently for 70% of the total population.
The current low coverage in rural areas stems
from the collapse of the old commune-based
cooperative medical scheme (CMS) following
the decollectivization of agriculture. Attempts to
resuscitate the CMS during the 1990s met with
limited success. Schemes have tended to be less
generous than the “old” CMS, and tend to suffer
from poor administration and small risk pools.
Further, their voluntary nature tends to result in
adverse selection (the better risks opting out,
leaving behind a risk pool that comprises ever
worse risks).
With these experiences in mind, the government
recently decided to develop a ‘new-style’ CMS
(NCMS). The program is being piloted in more
than 300 of China’s more than 2000 counties,
and will be rolled out to the rest of the country
by 2010. Contributions from households.
starting at 10 RMB per person, and paid on a
voluntary basis.will be supplemented by a 10
RMB subsidy from local governments, and by a
10 RMB matching subsidy from central
government in the case of households living the
poorer central and western provinces. NCMS
will operate at the county level rather than at the
village or township level as was the case in the
old CMS.
NCMS is a major policy shift by the
government, and will doubtless make health
care affordable to millions of rural households
who currently do not get the care they need or
do but end up impoverishing themselves in the
* For example, even if benefits are limited to hospital costs,
that would still leave 40% of expected medical costs
uncovered. In fact, 30 RMB is sufficient to cover only
around half of expected hospital costs, which would leave
patients picking up the remaining 50% of their hospital
bill.
process. As with all major policy initiatives,
challenges are likely to be encountered as the
policy is rolled out nationwide. Will NCMS be
sustainable if kept on a voluntary basis, or will
it increasingly suffer from adverse selection?
Will a combined contribution of 30 RMB be
sufficient? It looks rather small compared to the
104 RMB spent per capita on medical care in
rural China in 2002. If 30 RMB is too small,
and is not subsequently adjusted upwards, there
are risks. NCMS administrators may promise
too much to their members in terms of benefits,
and end up making a loss. Or they may limit the
scheme’s benefits, so that NCMS members have
to pay a substantial share of the cost of health
care out of pocket.* Would households not be
impoverished with such high copayments? If a
total contribution of 30 RMB is indeed too little
to make NCMS a fully fledged insurance
scheme, how could additional revenues be
generated, and done so in such a way that keeps
NCMS affordable for the poor? How should
central and local government subsidies be
targeted if at all?
Expanding health insurance will undoubtedly
help make care affordable.it will help ensure
that people who need care get it, and are able to
do so without impoverishing their families in
the process.
But focusing on lack of health insurance as the
obstacle to better health system performance
begs the question of why health care costs are so
high.and increasing so rapidly.in the first
place. Things would be different if the high (and
rising) cost of health care were justifiable. But it
doesn’t seem to be. Rather, it appears to reflect
an increasing tendency of China’s providers to
induce demand for their services, especially
high-tech care.
The health sector is one of the few sectors of the
economy where users know far less about what
services are appropriate for them than the
person delivering the service. Health providers
have the scope to exploit this informational
advantage, and may generate services that are
not medically necessary. Whether they do so
depends on the incentives they face.
Under the old planned economy of health care
that existed in China up to 1980, providers had
little financial incentive to generate demand for
their services. They received a budget from the
State or commune and that was the only legal
payment they could receive.
However, when the planned economy model
was discarded and replaced in the 1980s by the
‘Management Responsibility System’, provider
incentives changed markedly. Under the new
MRS system, rural health centers and hospitals
were allocated a fixed subsidy and became free
to generate additional revenues by charging
patients. Furthermore, providers treating insured
patients were reimbursed on a fee-for-service
(FFS) basis. The prices paid by fee-paying
patients and insurers were not set by providers
themselves (one key element of a market system
was therefore missing from the new model), but
rather by a Price Commission. This tried to keep
basic care affordable by setting the price of such
care well below cost, and allowing providers to
cross-subsidize such care by allowing them to
earn profits on high-tech care. In addition,
allowable drug prices were set above cost, and
the allowable fees for insured patients were set
above those for uninsured patients.
These policy changes, coupled with the
information asymmetry between patient and
provider, have resulted in many providers over-
prescribing drugs because they make a profit on
their sale, over-delivering sophisticated care on
which they make a profit and under-delivering
basic care on which they make a loss (see Box
1).9 The institution-level incentives have been
sharpened by the use of individual-level
incentives.the bonuses doctors receive from
their hospital often depend on the revenues they
generate through the provision of services and
prescription of drugs. Overcharging has become
increasingly prevalent: in a small scale study of
hospitals in Shandong province, it was found
that hospitals routinely overcharged by a margin
of around 90% of the regulated fees, typically
by “unbundling” services.10
Improving provider performance
* DOTS stands for ‘directly observed treatment strategy’.
Box 1: The legacies of China’s provider payment
system and pricing policies
In a recent study of village clinics, it was found that
only 0.06% of drug prescriptions were considered
reasonable.11 Another study found that 20% of
expenditures associated with the treatment of
appendicitis and pneumonia were clinically
unnecessary.12
In the case of TB, providers have delivered
additional care to that in the free DOTS* package,
because doing so generates additional revenues for
them. In one setting, a local TB control manager
explained that the DOTS strategy “has been locally
adapted… to improve effectiveness and generate
revenue”.13 This involved treating patients for longer
than the recommended six months, and providing
non-standard tests and medicines on top of those in
the DOTS package.
Many MCH centers now sell drugs and focus on
maternity services for which they can charge, while
EPS stations have begun offering outpatient care and
have expanded revenue-generating activities such as
sanitary inspections. These revenue-generating
activities have displaced less profitable but more
cost-effective activities, such as basic preventive and
curative care, public health programs, outreach, and
support and supervision.
Expanding health insurance.often seen as the
obvious policy response to unaffordable care.
could in fact exacerbate these problems. If
providers continue to be paid by insurers on a
FFS basis, the likelihood is that expansion of
insurance coverage will simply result in
providers inducing still more demand for their
services, with patients perhaps paying similar
amounts out-of-pocket as before, and providers
pocketing the extra taxes injected into the
system through insurance subsidies. Insurance
reform without provider-payment reform would
lead to disappointing results at best.
But how should providers be paid by insurers if
not by FFS? Should insurers be free to decide?
How should prices be set for fee-paying
patients? By whom? And should providers be
regulated differently if supplier-induced demand
is to be cut? These are all key questions to be
addressed in future Notes.
What is the appropriate role for government in
the health sector? Should government reduce its
involvement in this sector and leave it to the
free market?
Theory and evidence from around the world
suggests that leaving the health care sector
entirely to the market would not be wise. No
country.not even the United States.does so.
In some respects, in fact, the government in
China should probably be doing more in the
health sector. For example, it should probably
be spending more, by, for example halting the
decline in the share of government spending
going to health (Figure 6). By international
standards, a country with China’s per capita
income would be expected to spend around
2.4% of its GDP on government health
spending. In the event, it spends just 1.9%.
Figure 6: Government health spending has
risen in real terms, but has fallen as share of
total government spending
5010015020025030019901992199419961998200020021990=100HospitalControl & prev.
MCHGovt. hlth exp.
Hlth shre of govt. exp.
Source: China National Health Economics Institute China
National Health Accounts Digest, 2002.
Beyond spending more, what should China’s
government do differently in the health sector?
Ultimately, government involvement in the
health sector is to be rationalized in terms of the
government trying to overcome ‘market
failures’.instances where a free market fails to
deliver efficient and equitable outcomes. The
current risk of adverse selection emerging as a
Strengthening the role of government in
China’s health sector
* Source: China National Health Economics Institute China
National Health Accounts Digest, 2002.
problem in voluntary insurance has already been
mentioned, as have other challenges facing the
government in the area of health insurance.
In the market for health care itself, there are also
areas where the role of government merits
examination.
All governments have an important role in
setting and enforcing regulations to ensure that
providers do not exploit their informational
advantage over patients. The Chinese
government has recently expressed concerns
about this issue, and there is certainly scope to
strengthen the regulation of providers in China.
It is true of public providers, where quality
control and the enforcement of price regulation
are weak, but is especially true of private
providers. Currently the weak framework for
regulation (and enforcement) of private sector
activity exposes patients to considerable risks of
malpractice and unscrupulous providers. The
price schedule is another area where, as already
noted, reform may be merited.
Government engagement on public health is
another area worth reviewing. All governments
have an important role to play in financing.or
at least subsidizing.services and activities that
have either ‘externality’ characteristics such as
immunization, or ‘public goods’ characteristics
such as communicable disease surveillance and
control. In China, public health activities are
only partially financed by the government: for
example, in a departure from international
practice, Chinese families are charged for
immunization.
China has, in fact, been increasing its spending
on public health in real terms (Figure 6),
contrary to what is often claimed. However,
there is a concern that providers responded
over-enthusiastically when they were given the
freedom to raise their own revenues. And it is
true that the government has increased its
spending on health in general faster than on
prevention and control activities, and that public
health and family planning programs account
for only 10-20% of non-insurance government
spending.*
Should greater priority be given to core public
health functions in China? Are the recent
reforms and extra spending enough? Should the
government rely for the delivery of public
health services on providers who are allowed to
generate incomes on top of any subsidies
received? Or should public health activities be
delivered by institutions that rely 100% on
government subsidies? These are all important
questions that need answers.
On the promotion of equity the government also
faces challenges. Government spending
currently disproportionately benefits the rich
(Figure 7). This is likely to reflect a variety of
factors. One is that because local governments
are highly dependent on their own revenues,
government spending per capita varies
considerably across provinces.and even more
so across counties. These inequalities have
grown in recent years.14 Another factor is the
large fraction of government health spending
that goes to supporting the BMI.
Figure 7: Government spending on health in
China disproportionately benefits the rich
-0.4-0.20.00.20.4Gansu (China)
Heilongjiang(China)
Hong Kong SAR(China)
IndonesiaThailandViet NamConcentration Index(negative indicates pro-poor)
Source: Van Doorslaer, O’Donnell, et al.15
There are signs that things are changing for the
better, the government’s commitment to transfer
10 RMB for every CMS enrollee in the poorer
central and western provinces being a good
example. Its commitment to improving equity is
also evident in the Ministry of Civil Affairs’
new medical assistance program.
On the two overarching goals of any health
system.better population health and financial
Towards concrete reform proposals
protection.China’s health care system faces
major challenges.
On health outcomes China has gone from being
an over-achiever to being an under-achiever.
Many neighbors are doing better than China on
progress towards the health MDGs. High health
care costs are a major factor in people not
getting the health care they need, and in causing
poverty among those who do get care.
Inadequate health insurance.low coverage and
high copayments.is one clear area where work
is required, and where reform efforts are already
underway. But reform on the supply side is also
urgently needed.the current emphasis on out-
of-pocket payments and fee-for-service, coupled
with the distorted price schedule, results in the
provision of unnecessary care and rapidly rising
costs. Expanding health insurance without
addressing these supply-side issues makes little
sense. Further, there is a case for the
government increasing the quantity and quality
of its engagement in the health sector.
Government spending in China is less than one
would expect by international standards of a
country with China’s GDP per capita, and as in
many countries it disproportionately benefits the
better off. Government spending on public
health programs has increased in real terms, but
more slowly than government health spending
in general. The government could also
undoubtedly achieve more with existing
spending: for example, improving its regulatory
framework vis-a-vis health care providers.
It is one thing to point out the need for reform.
It is another to set out concrete options for
reform. Several subsequent Briefing Notes in
this series will make a start on this process by
providing critical reviews of what is already
known in the academic and policy literature.
The next Note, for example, looks at the
evidence available on how to improve provider
performance. These Notes will in turn inform
the deliberations of a joint Government of
China-World Bank working group, whose task
is to come up with concrete ideas for policy
reform in each of the areas discussed in this
Note.
References
1. World Bank. China's progress towards the health MDGs.
Washington DC: World Bank, 2005, Rural Health in
China Briefing Note Series, Briefing Note #2.
2. Gao J, Qian J, Tang S, Eriksson B, Blas E. Health equity
in transition from planned to market economy in
China. Health Policy and Planning
2002;17(Suppl.1):20-29.
3. Jalan J, Ravallion M. Behavioral Responses to Risk in
Rural China. Journal of Development Economics
2001;66(1):23-49.
4. Jalan J, Ravallion M. Are the Poor Less Well Insured?
Evidence on Vulnerability to Income Risk in Rural
China. Journal of Development Economics
1999;58(1):61-81.
5. O'Donnell O, Van Doorslaer E, Rannan-Eliya R, et al.
Who pays for health care in Asia? EQUITAP
Working Paper # 1, Erasmus University, Rotterdam
and IPS, Colombo, 2005.
6. Van Doorslaer E, O'Donnell O, Rannan-Eliya RP, et al.
Paying out-of-pocket for health care in Asia:
Catastrophic and poverty impact. EQUITAP
Working Paper #2, Erasmus University, Rotterdam
and IPS, Colombo, 2005.
7. Akin JS, William H. Dow and Peter M. Lance. Did the
distribution of health insurance in China continue to
grow less equitable in the nineties? Results from a
longitudinal survey. Social Science & Medicine
2003( in press).
8. Liu Y. Reforming China's urban health insurance
system. Health Policy 2002;60(2):133-150.
9. Barnum H, Kutzin J. Public hospitals in developing
countries: Resource use, cost, financing: Baltimore
and London: Johns Hopkins University Press for the
World Bank, 1993.
10. Liu X, Liu Y, Chen. N. The Chinese experience of
hospital price regulation. Health Policy and Planning
2000;15(2):157-163.
11. Zhang X, Feng Z, Zhang L. Analysis on Quality of
Prescription of Township Hospitals in Poor Areas.
Journal of Rural Health Service Management
2003;23(12):33-35.
12. Liu X, Mills A. Evaluating payment mechanisms: how
can we measure unnecessary care? Health Policy and
Planning 1999;14(4):409-13.
13. Zhan S, Wang L, Yin A, Blas E. Revenue-driven in TB
control--three cases in China. Int J Health Plann
Manage 2004;19 Suppl 1:S63-78.
14. World Bank. China: National Development and Sub-
National Finance: A Review of Provincial
Expenditures. Washington, DC, 2002, 22951-CHA.
15. O'Donnell O, van Doorslaer E, Rannan-Eliya RP, et al.
Who benefits from public spending on health care in
Asia? EQUITAP Working Paper #3, Erasmus
University, Rotterdam and IPS, Colombo, 2005.
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