Healthcare reform in the People's Republic of China
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The healthcare system reform in the People's Republic of China refers to the healthcare system transition in modern China.
The Ministry of Health of the State Council oversees the health services system, which includes a substantial rural collective sector but little private sector. Nearly all the major medical facilities are run by the government.
Main organizations involved in the reform 
Research institute and universities: Development Research Center of the State Council, Ministry of Health Statistics and Information Center, China Health Economics Institute, Peking University, Fudan University, Tsinghua University, Beijing Normal University, Tongji Medical College, Dalian Medical University
After 1949 the Ministry of Public Health was responsible for all health-care activities and established and supervised all facets of health policy. Along with a system of national, provincial-level, and local facilities, the ministry regulated a network of industrial and state enterprise hospitals and other facilities covering the health needs of workers of those enterprises. In 1981 this additional network provided approximately 25 percent of the country's total health services. Health care was provided in both rural and urban areas through a three-tiered system. In rural areas the first tier was made up of barefoot doctors working out of village medical centers. They provided preventive and primary care services, with an average of two doctors per 1,000 people. At the next level were the township health centers, which functioned primarily as out-patient clinics for about 10,000 to 30,000 people each. These centers had about ten to thirty beds each, and the most qualified members of the staff were assistant doctors. The two lower-level tiers made up the "rural collective health system" that provided most of the country's medical care. Only the most seriously ill patients were referred to the third and final tier, the county hospitals, which served 200,000 to 600,000 people each and were staffed by senior doctors who held degrees from 5-year medical schools. Health care in urban areas was provided by paramedical personnel assigned to factories and neighborhood health stations. If more professional care was necessary the patient was sent to a district hospital, and the most serious cases were handled by municipal hospitals. To ensure a higher level of care, a number of state enterprises and government agencies sent their employees directly to district or municipal hospitals, circumventing the paramedical, or barefoot doctor, stage.
An emphasis on public health and preventive treatment characterized health policy from the beginning of the 1950s. At that time the party began to mobilize the population to engage in mass "patriotic health campaigns" aimed at improving the low level of environmental sanitation and hygiene and attacking certain diseases. One of the best examples of this approach was the mass assaults on the "four pests"--rats, sparrows, flies, and mosquitoes—and on schistosoma-carrying snails. Particular efforts were devoted in the health campaigns to improving water quality through such measures as deep-well construction and human-waste treatment. Only in the larger cities had human waste been centrally disposed. In the countryside, where "night soil" has always been collected and applied to the fields as fertilizer, it was a major source of disease. Since the 1950s, rudimentary treatments such as storage in pits, composting, and mixture with chemicals have been implemented.
As a result of preventive efforts, such epidemic diseases as cholera, plague, typhoid, and scarlet fever have almost been eradicated. The mass mobilization approach proved particularly successful in the fight against syphilis, which was reportedly eliminated by the 1960s. The incidence of other infectious and parasitic diseases was reduced and controlled. Relaxation of certain sanitation and anti-epidemic programs since the 1960s, however, may have resulted in some increased incidence of disease.
In the early 1980s, continuing deficiencies in human-waste treatment were indicated by the persistence of such diseases as hookworm and schistosomiasis. Tuberculosis, a major health hazard in 1949, remained a problem to some extent in the 1980s, as did hepatitis, malaria, and dysentery. In the late 1980s, the need for health education and improved sanitation was still apparent, but it was more difficult to carry out the health-care campaigns because of the breakdown of the brigade system. By the mid-1980s, China recognized the acquired immune deficiency syndrome (AIDS) virus as a serious health threat but remained relatively unaffected by the deadly disease. As of mid-1987 there was confirmation of only two deaths of Chinese citizens from AIDS, and monitoring of foreigners had begun. Following a 1987 regional World Health Organization meeting, the Chinese government announced it would join the global fight against AIDS, which would involve quarantine inspection of people entering China from abroad, medical supervision of people vulnerable to AIDS, and establishment of AIDS laboratories in coastal cities. Additionally, it was announced that China was experimenting with the use of traditional medicine to treat AIDS.
In the mid-1980s the leading causes of death in China were similar to those in the industrialized world: cancer, cerebrovascular disease, and heart disease. Some of the more prevalent forms of fatal cancers included cancer of the stomach, esophagus, liver, lung, and colon-rectum. The frequency of these diseases was greater for men than for women, and lung cancer mortality was much greater in higher income areas. The degree of risk for the different kinds of cancers varied widely by region. For example, nasopharyngeal cancer was found primarily in south China, while the incidence of esophageal cancer was higher in the north.
To address concerns over health, the Chinese greatly increased the number and quality of health-care personnel, although in 1986 serious shortages still existed. In 1949 only 33,000 nurses and 363,000 physicians were practicing; by 1985 the numbers had risen dramatically to 637,000 nurses and 1.4 million physicians. Some 436,000 physicians' assistants were trained in Western medicine and had two years of medical education after junior high school. Official Chinese statistics also reported that the number of paramedics increased from about 485,400 in 1975 to more than 853,400 in 1982. The number of students in medical and pharmaceutical colleges in China rose from about 100,000 in 1975 to approximately 160,000 in 1982.
Efforts were made to improve and expand medical facilities. The number of hospital beds increased from 1.7 million in 1976 to 2.2 million in 1984, or to 2 beds per 1,000 compared with 4.5 beds per 1,000 in 1981 in the United States. The number of hospitals increased from 63,000 in 1976 to 67,000 in 1984, and the number of specialized hospitals and scientific research institutions doubled during the same period.
The availability and quality of health care varied widely from city to countryside. According to 1982 census data, in rural areas the crude death rate was 1.6 per 1,000 higher than in urban areas, and life expectancy was about four years lower. The number of senior physicians per 1,000 population was about 10 times greater in urban areas than in rural ones; state expenditure on medical care was more than ¥26 per capita in urban areas and less than ¥3 per capita in rural areas. There were also about twice as many hospital beds in urban areas as in rural areas. These are aggregate figures, however, and certain rural areas had much better medical care and nutritional levels than others.
In 1987 economic reforms were causing a fundamental transformation of the rural health-care system. The decollectivization of agriculture resulted in a decreased desire on the part of the rural populations to support the collective welfare system, of which health care was a part. In 1984 surveys showed that only 40 to 45 percent of the rural population was covered by an organized cooperative medical system, as compared with 80 to 90 percent in 1979.
This shift entailed a number of important consequences for rural health care. The lack of financial resources for the cooperatives resulted in a decrease in the number of barefoot doctors, which meant that health education and primary and home care suffered and that in some villages sanitation and water supplies were checked less frequently. Also, the failure of the cooperative health-care system limited the funds available for continuing education for barefoot doctors, thereby hindering their ability to provide adequate preventive and curative services. The costs of medical treatment increased, deterring some patients from obtaining necessary medical attention. If the patients could not pay for services received, then the financial responsibility fell on the hospitals and commune health centers, in some cases creating large debts.
Consequently, in the post-Mao Zedong era of modernization, the rural areas were forced to adapt to a changing health-care environment. Many barefoot doctors went into private practice, operating on a fee-for-service basis and charging for medication. But soon farmers demanded better medical services as their incomes increased, bypassing the barefoot doctors and going straight to the commune health centers or county hospitals. A number of barefoot doctors left the medical profession after discovering that they could earn a better living from farming, and their services were not replaced. The leaders of brigades, through which local health care was administered, also found farming to be more lucrative than their salaried positions, and many of them left their jobs. Many of the cooperative medical programs collapsed. Farmers in some brigades established voluntary health-insurance programs but had difficulty organizing and administering them.
Although the practice of traditional Chinese medicine was strongly promoted by the Chinese leadership and remained a major component of health care, Western medicine was gaining increasing acceptance in the 1970s and 1980s. For example, the number of physicians and pharmacists trained in Western medicine reportedly increased by 225,000 from 1976 to 1981, and the number of physicians' assistants trained in Western medicine increased by about 50,000. In 1981 there were reportedly 516,000 senior physicians trained in Western medicine and 290,000 senior physicians trained in traditional Chinese medicine. The goal of China's medical professionals is to synthesize the best elements of traditional and Western approaches.
In practice, however, this combination has not always worked smoothly. In many respects, physicians trained in traditional medicine and those trained in Western medicine constitute separate groups with different interests. For instance, physicians trained in Western medicine have been somewhat reluctant to accept "unscientific" traditional practices, and traditional practitioners have sought to preserve authority in their own sphere. Although Chinese medical schools that provided training in Western medicine also provided some instruction in traditional medicine, relatively few physicians were regarded as competent in both areas in the mid-1980s.
The extent to which traditional and Western treatment methods were combined and integrated in the major hospitals varied greatly. Some hospitals and medical schools of purely traditional medicine were established. In most urban hospitals, the pattern seemed to be to establish separate departments for traditional and Western treatment. In the county hospitals, however, traditional medicine received greater emphasis.
Traditional medicine depends on herbal treatments, acupuncture, acupressure, moxibustion (the burning of herbs over acupuncture points), and "cupping" of skin with heated bamboo. Such approaches are believed to be most effective in treating minor and chronic diseases, in part because of milder side effects. Traditional treatments may be used for more serious conditions as well, particularly for such acute abdominal conditions as appendicitis, pancreatitis, and gallstones; sometimes traditional treatments are used in combination with Western treatments. A traditional method of orthopedic treatment, involving less immobilization than Western methods, continued to be widely used in the 1980s.
Although health care in China developed in very positive ways by the mid-1980s, it exacerbated the problem of overpopulation. In 1987 China was faced with a population four times that of the United States and over three times that of the Soviet Union. Efforts to distribute the population over a larger portion of the country had failed: only the minority nationalities seemed able to thrive in the mountainous or desert-covered frontiers. Birth control programs implemented in the 1970s succeeded in reducing the birth rate, but estimates in the mid-1980s projected that China's population will surpass the 1.2 billion mark by around the start of the 21st century, putting still greater pressure on the land and resources of the nation.
The Chinese government still faces a mammoth task in trying to provide medical and welfare services adequate to meet the basic needs of the immense number of citizens spread over a vast area. Although China's overall affluence has grown dramatically since the mid-1980s — per capita income has increased many times over, and caloric intake has become comparable to that for western Europe — a great many of its people live at socioeconomic levels far below the national average. The medical system, moreover, labours under the tension of whether to stress quality of care or to spread scarce medical resources as widely as possible. In addition, there has been repeated debate over the relative balance that should be struck between the use of Western and traditional Chinese medicine. While the Cultural Revolution pushed the balance toward widespread minimum care with great attention paid to traditional medicine, policy after the late 1970s moved in the other direction on both issues; by the late 1980s the proportion of doctors of Western medicine had exceeded those of traditional practices.
At the same time, the medical establishment also more or less has been affected by this major influence: along with 1980s initial period people's commune disintegration, the original rural cooperatives medical service system rapidly disintegrates in the majority of areas; In the cities scope, the public health services system and the labor insurance medical service system also gradually declines in the varying degree. But the medical service relates to national economy and the people's livelihood and the social stability, and the related problems are extremely complex,the establishment of this new system is slower continuously, compared to other professions.
The health of the Chinese populace has improved considerably since 1949. Average life expectancy has increased by about three decades and now ranks nearly at the level of that in advanced industrial societies. Many communicable diseases, such as plague, smallpox, cholera, and typhus, have either been wiped out or brought under control. In addition, the incidences of malaria and schistosomiasis have declined dramatically since 1949.
As evaluated on a per capita basis, China's health facilities remain unevenly distributed. Medical and health personnel work in rural areas, where approximately one-half of the population resides, where access to higher tier care is limited. The doctors of Western medicine, who constitute about one-fourth of the total medical personnel, are even more concentrated in urban areas. Similarly, about two-thirds of the country's hospital beds are located in the cities.
China has a health insurance system that provides virtually free coverage for people employed in urban state enterprises and relatively inexpensive coverage for their families. The situation for workers in the rural areas or in urban employment outside the state sector is far more varied. There are some cooperative health care programs, but their voluntary nature produced a decline in membership from the late 1970s.
The severest limitation on the availability of health services, however, appears to be an absolute lack of resources, rather than discrimination in access on the basis of the ability of individuals to pay. An extensive system of paramedical care has been fostered as the major medical resource available to most of the rural population, but the care has been of uneven quality. The paramedical system feeds patients into the more sophisticated commune-level and county-level hospitals when they are available.
New Rural Co-operative Medical Care System 
The New Rural Co-operative Medical Care System (NRCMCS) is a new 2003 initiative to overhaul the healthcare system, particularly intended to make it more affordable for the rural poor. Nowadays the permanent urban population (except migrants) take out medical insurance.Many in the rural areas may struggle to afford with the new burden of healthcare fees, a result of the collapse of the old state-funded health system which existed before China's program of economic reforms in the 1980s.
The annual cost of medical cover under the NRCMCS is 50 yuan (US$7) per person. Of that, 20 yuan is paid in by the central government, 20 yuan by the provincial government and 10 yuan is paid by the patient. As of September 2007, around 80% of the whole rural population of China had signed up (about 685 million people). The system is tiered, depending on the location. If patients go to a small hospital or clinic in their local town, the scheme will cover from 70-80% of their bill. If they go to a county one, the percentage of the cost being covered falls to about 60%. And if they need specialist help in a large modern city hospital, they have to bear most of the cost themselves, the scheme would cover about 30% of the bill.
Primary care reform 
Lu et al. reported in 2005 that China has no national primary care system, in particular general practice. The introduction of general practice in parts of urban China began in 1999. Lu et al. explain that "acceptance of general practice has been slow against the background of a strong urban tradition of hospitals as primary care providers, the widespread belief that specialists are more skilled than generalists even for minor complaints, and the perceived right of the individual to use the provider of their choice. But these attitudes are changing slowly. In several cities, notably in Zhejiang, Jiangsu, and Guangdong provinces, general practitioners (GPs) are acquiring a good local reputation and are attracting large numbers of patients."
Lu et al. responded to criticisms that general practice in China failed to perform a gate-keeping role, by stating that "such a role is virtually impossible to establish in the presence of a diversity of payment schemes including government insurance, employer-paid insurance, private insurance, community-based insurance (mostly with only part reimbursement), and out-of-pocket payment. Training and pay have not presented problems. The system of payment of GPs is similar to that of hospital practitioners - ie, a basic salary supplemented by bonuses according to performance. In popular hospitals and busy specialties, these bonuses may be up to ten times the basic salary, whereas some hospital doctors may receive only the basic salary. Likewise, GPs get a basic salary, which is topped up from patients' fees and prescriptions. Thus there are clear incentives to improve quality, hence attracting more patients and increasing income. The desire of newly-trained doctors to work in cities will ensure there will be an unlikely shortage of GPs for the foreseeable future." 
There are several important problems facing health policy-makers. First, a system that keeps basic wages low, but allows doctors to make money from prescriptions and investigations, leads to perverse incentives and inefficiency at all levels. Second, as in many other countries, to develop systems of health insurance and community financing which will allow coverage for most people is a huge challenge when the population is ageing and treatments are becoming more sophisticated and expensive. Several different models have been developed across the country to attempt to address the problems.
An example of a reform model based on an international partnership approach was the Basic Health Services Project. This was implemented between 1998 and 2007 by the Government of China in 97 poor rural counties in which 45 million people live. Its aim was to encourage local officials to test innovative strategies for strengthening their health service to improve access to competent care and reduce the impact of major illness. In particular it supported county implementers to translate national health policy into strategies and actions meaningful at a local level.
In view of China managing major health system reform against a background of rapid economic and institutional change, the Institute of Development Studies outlines policy implications based on collaborative research around the Chinese approach to Health System Development. This approach includes testing innovations at local level, encouraging learning from success, and gradually building institutions that support new ways of doing things. It suggests that analysts from other countries and officials in organisations that support international health need to understand this approach if they are to strengthen mutual learning with their Chinese counterparts.
See also 
- Healthcare reform
- Health care system
- Social structure of China
- Public health in the People's Republic of China
- Universal health care
- Medical savings account
- Two-tier health care
- Journal of Health Care for the Poor and Underserved
- Dib, H. H.; Pan, X.; Zhang, H. (2008). "Evaluation of the new rural cooperative medical system in China: Is it working or not?". International Journal for Equity in Health 7: 17. doi:10.1186/1475-9276-7-17. PMC 2459170. PMID 18590574.
- The reform of the rural cooperative medical system in the People's Republic of China: interim experience in 14 pilot counties. Authors: Carrin G.1; Ron A.; Hui Y.; Hong W.; Tuohong Z.; Licheng Z.; Shuo Z.; Yide Y.; Jiaying C.; Qicheng J.; Zhaoyang Z.; Jun Y.; Xuesheng L. Source: Social Science and Medicine, Volume 48, Number 7, April 1999, pp.961-972(12) 
- Lu L, Zhu WZ, Zhang J, Hesketh T. Reform of Primary Care in China. Lancet 2005; Vol 366 Issue 9480: 120. http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(05)66861-4/fulltext
- Liu Y, Hu S, Fu W, Hsiao WC. Is community financing necessary and feasible in rural China?. Health Policy 1996; 38: 155-171.
- A Partnership for Health In China Institute of Development Studies (IDS) Practice Paper 2. 2009.
- Lesson from the Chinese Approach to Health Systems Development Institute of Development Studies (IDS) In Focus Policy Brief Issue 8, June 2009.
Further reading 
- Bloom, Gerald and Tang, Shenglan. ed(s) (2004) Health care transition in urban China. Ashgate, Aldershot
- Ofra Anson, Sun Shifang (2005) Health Care in Rural China: Lessons From HeBei Province. Ashgate Publishing
- Study in HSOP. Health and social protection: experiences from Cambodia, China and Lao. 2008, Institute of Tropical Medicine Antwerp.
- Meng, Qingyue. Health care pricing and payment reforms in China : The implications for health service delivery and cost containment. PhD Thesis, 2006, Karolinska Institutet. ISBN 91-7140-576-3
- Dong, Hengjin. Health financing systems & drug use in rural China. PhD Thesis, 2000, Karolinska Institutet. ISBN 91-628-3982-9
- Andrew Green. An Introduction to Health Planning in Developing Countries. New York: Oxford University Press, 1999 (2nd ed). ISBN 0-19-262984-0
- Willy L. De Geyndt. Managing the Quality of Health Care in Developing Countries. Washington DC : World Bank, 1994. ISBN 0-8213-3092-6
- Will patients be rewarded? - The Economist, Apr 16th 2009
- Health care reform in the Republic of China: formulating policy in a market based health system
- Chinese Health Care System Reform at a Crossroads Japan Center for Economic Research (JCER) report. (Mar 1, 2007)
- Qingyue Meng, Xingzhu Liu, Reforming China's Healthcare System: Beijing's Strategy for Establishing Universal Coverage China Brief, 6(24). (December 6, 2006)
- Gregory C Chow. An Economic Analysis of Health Care in China.doc Princeton University. (August 8, 2006)
- Analysis: Chinese healthcare gap widens United Press International (UPI). (April 10, 2007)
- WHO -Community based Health Insurance Schemes in Developing Countries
- Books about China rural area
- Community Health Care Reform and General Practice Training in China - Lessons Learned Liang Wannian, MD and Daniel Kam Yin Chan, MD
The Lancet Series 
The largest international research collaboration (October 2008) on the Health System Reform in China led by The Lancet, China Medical Board, and Peking University Health Science Center. Full collection of China Series available here.