of the Medical and Health Care System
The current medical insurance
system was based on the free medical care and labor insurance system
established in the early 1950s, under which medical expenses incurred
by workers and staff are covered by the state. This system has played
an important role in guaranteeing the health of workers¡¯ and staff
members, promoting economic development and safeguarding social
stability. In the wake of China¡¯s economic development and the deepening
of the economic reform, defects in this system have gradually emerged.
The rapid increase in medical expenses has brought a heavy burden
on the state and some enterprises. At the same time, a lot of medical
resources have been wasted. But in the countryside, only a few well-off
regions provide free medical care, while in other regions medical
expenses are paid by the local people themselves. So reform of the
medical services system is a matter of urgency.
The compensation mechanism
of medical institutions has to be straightened out in the course of
the reform of the medical and health care system for urban workers
and staff. This means that the medical insurance system should be
both socialized and localized. Medical expenses should be rationally
allocated among the state, units and individuals. In the countryside,
a cooperative medical service system should be further promoted and
perfected. Organized and led by the government, the cooperative medical
service system is run by the local people and subsidized by the state.
Peasants take part in it voluntarily. The funds come mainly from peasant
households, collectives and the state. In this way, basic medical
services can be guaranteed in the countryside and the danger of rural
people becoming impoverished because of illness can be averted.