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Health Care System: Challenges and Opportunities
A well-to-do society can only be built on the foundation of a healthy population. As an important part of its social development, China’s health care system will face challenges as well as opportunities in the coming two decades, when the country strives to reach the goal of common prosperity.

A New Health Care System in Line with Social Development

International health economic experts generally agree that China’s macro economic development can be divided into two periods, 1949-1980 and 1980-2002, during which China successfully established its unique economic system and obtained unprecedented experience. The development of China’s health care system has also passed through two periods. In the former period, the government made good use of its social resources and built up an efficient medicare system, which played a vital role in improving people’s health. But since the country adopted the policies of reform and opening to the outside world, its old health care system can no longer function well. China’s health index obviously lags behind the growth rate of people’s average income.

The medicare system gradually built following the founding of New China in 1949 includes multiple forms such as public health services, labor health care insurance, rural collective-economy health care and self-supported health care. It provided basic medical guarantee for the massive public. However, this system cannot meet the requirement of a socialist market economy. That is why the state has decided to reform the old medicare system. So far, 86.91 million people have been covered by the new system, the Basic Medical Insurance System for Urban Employees.

Concern for the Medicare of People in Underdeveloped Areas

The rural people benefited a lot from the cooperative health care system in the past decades. However, along with the spectacular change in the rural economic system, the cooperative health care system faded away. In the middle 1980s and 1990s, governments at various levels made great efforts in restoring this once efficient system, but achieved little because of all kinds of difficulties and problems.

At a recent national conference on rural health care, the central authorities worked out a series of regulations for further strengthening medicare in rural areas. According to the “Decisions on Improving Rural Health Care Undertaking,” local governments shall gradually establish a new rural cooperative medicare system focusing on comprehensive arrangement for serious diseases, with funds raised from individuals, collectives and governmental subsidies, and pilot projects should be established first. A medical assistance system for poverty-stricken peasant families shall also be set up with funds pooled through various channels.

The central government in particular stresses the increase of health care input for the middle and west regions of China and poverty-stricken areas. Finance departments at various levels should increase their budgets for rural health care every year. Beginning from 2003, the central government will allocate a subsidy fund of 10 yuan (US$1.2) per year for each rural resident listed in the new cooperative health care system in those areas. Local governments must annually provide at least 10 yuan (US$1.2) per person for these rural people.

While increasing investment, governments at various levels should give priority to improving management and raising efficiency of rural medical institutes, the document states.

‘Double Disease-Burden’ Widens the Gap Between Urban and Rural People

The health care revolution happened in the 20th century and the migration trend contributed to the progression of China’s disease model, which varies greatly in urban and rural areas. Urban citizens have developed a new disease model. Besides the new epidemics like HIV/AIDS, they are now suffering more chronic diseases like cancer, cardiovascular diseases and diabetes in addition to psychological problems. But in the rural areas, especially in poverty-stricken areas, some epidemics and endemics have not yet been eradicated and some gynaopathies and children’s diseases are still rioting, due to poor hygienic sanitation and unfavorable ecological environment. The imbalanced developments of urban and rural areas render a wide gap in public health services. Urban citizens and the majority of rural citizens are actually in different disease model progression stages. This double burden of epidemic disease adds further strains to China’s underdeveloped health care system for its 1.3 billion population.

Threat from New Diseases Like HIV/AIDS

In health economics research, whether a disease attacks the young and middle-aged labor force is an important index for assessing its threat. In China, 93.9 percent of the 1 million HIV/AIDS infected people are reportedly people from 15 to 49. The attack of HIV/AIDS on the young and middle-aged not only decreases the work force and lays more burdens on society but also brings lots of other social problems. It is estimated that various epidemic diseases, including AIDS, will exert negative influences on China’s economic growth rate.

Medicare Sector Contributes to National Economic Growth

China is ready to march towards its goal of common prosperity. The health of its 1.3 billion people is part of this program. There is no doubt that the medicare sector will make its own contribution to the country’s GDP growth.

Overseas health economic experts hold that health care is an important momentum of a country’s economic development. Along with longer lives, the numbers of chronic patients and geriatrics patients will increase and more and more people will demand for quality health care. This will promote the development of medical industry, increasing production and creating employment opportunities. When China continues to enjoy high economic growth rate, people’s income will increase and their consumption on health products will increase too. For most of them, the rate of their expenditure increase for health care will surpass that of their income. This will serve as a stimulus to increase employment and output of the medical care sector. The health care sector is a labor-intensive sector. In Germany, one out of every 10 jobs is for or related to health care.

During the first period of China’s medical care development, most common epidemics were put under control and people’s health and physical conditions improved remarkably. This made it possible for China’s economy to develop rapidly in the 1980s. Good health is a foundation for people to receive education and increase work efficiency. According to the studies of World Bank experts, 8-10 percent of the world’s economic growth in the last four decades should be credited to the health of the population. A research of Harvard University also indicates that about 30-40 percent of the Asian economic wonders should be credited to the fact of having a healthy population.

(china.org.cn by Alex Xu, January 21, 2003)

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