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New Prescription for Rural Health
Public health services in rural areas should not be completely dominated by the free market. A support system for farmers is indispensable.

The government should improve the current public health system in China's countryside by spending more on it.

The health system in rural areas has changed greatly in the past two decades as the planned economy has given way to a market-driven one.

In the mid-1960s, a three-level health service was established in rural areas to provide primary health care to farmers. The three levels are county, town and village.

Under a highly-centralized economic system, public health programs initiated by the government could be carried out smoothly in the vast rural areas via the three-level safety net.

The cooperative medical service system was widely promoted in rural areas. There was a health worker in almost every village, who could provide basic medical services. These farmers-turned-health workers, known as "barefoot doctors," ensured their peers could access basic health care.

The "barefoot doctors" were paid from village funds, and the farmers enjoyed free services and were given medicines at cost prices.

Strict government controls over medicine production and sales made it possible for farmers to get quality medicines at low prices.

This system, which received strong financial support from the government, greatly improved farmers' health, even when the country was economically backward.

Since the early 1980s, sweeping market-oriented reforms have done away with the planned economy and medical services have been put on the market.

The village-affiliated health clinics were gradually privatized. The owners of these clinics are no longer paid from village funds and charge farmers for services.

Small village clinics have been asked to shoulder functions ranging from infectious disease control to maternal and child health. While they receive some compensation for these services from local government budgets, in many rural areas, it is not enough to cover their costs. As a result, farmers must pay for all basic health services.

Corruption and loopholes in procurement policies have also dramatically increased medicine prices in some places.

This has greatly reduced farmers' access to medical services.

An investigation sponsored by the Ministry of Health in 1993 indicated 59 per cent of cases where people failed to be hospitalized for proper treatment arose because the families could not afford to pay for the service. By 1998, that rate had climbed to 65 per cent.

Rural households often fall into poverty when a family member is plagued by serious disease.

One of the reasons why the medical care system has gone too far down the path of market reform is the government regards expenditure on public health as welfare instead of an investment in human resources. As authorities built a market economy, they slashed government input into the public welfare provided under a planned economy.

Meanwhile, local governments give investment priority to economic construction projects rather than human resources.

People's health, which is hard to measure, is usually excluded from assessments of governments' performance.

Higher-level governments have also shifted the burden of public health investment onto lower-level ones. And, pressed by tight budgets, lower-level governments have shifted the task of funding public health to medical institutions.

Policies developed in 1985 granted medical institutions the right to raise charges to make up government funding shortfalls.

These policies, while they temporarily solved the funding shortage, caused medical costs to soar.

In the past decade, these costs in rural areas have far exceeded increases in farmers' incomes.

Rural and urban public health services had grown apart even before the reform drive started in the late 1970s. But these reform measures, instead of narrowing the development gap, further widened it.

Though the urban poor are also burdened by costly medical services, they are in a better position than their rural counterparts since the lion's share of government funding goes to cities. Social medical insurance is also concentrated in cities.

Public health services should not be left completely to market forces, which tend to allocate resources unfairly. But the government may find it difficult to solve the problem.

Governments of many countries have tried to develop a balanced public health system but, so far, have failed to agree on a perfect model.

In China's wealthier eastern areas, village health stations were restored in some places, with some adopting a cooperative medical service system and some promoting a social medical insurance system.

All these experiments involve input by governments at all levels.

And they indicate that more government funding is needed to tackle the challenges facing rural public health services, regardless of the health care model adopted.

The author is a researcher with the Economics Institute of the Chinese Academy of Social Sciences.

(China Daily June 10, 2003)

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