Posted on Feb 18, 2011 by Sergio Ulloa
The State Council of China has announced plans to expand medical insurance coverage for workers and residents within the country's urban centers. The reform will see 90 percent of the costs associated with medical treatment covered by insurance for 440 million individuals throughout the People's Republic of China.
The plans were outlined in a document released on the State Council's official website on the 17th February 2011. The plans also cover the intention to increase the level of reimbursement of inpatient fees for China's urban retirees, the unemployed, and farmers, with the ultimate aim of covering 70 percent of medical costs as part of the latest steps in China's pursuit of health reform.
The increase in the levels of coverage offered through the central government, and provision of subsidies to cover at-risk individuals, is being taken in recognition of the current inadequacies existing in China's public healthcare system and the detrimental impact this has on the Chinese economy. Currently a majority of Chinese nationals are forced to pay for healthcare treatment out-of-pocket prior to admission to a hospital or medical facility, causing severe hardships in a country where the average urban worker's wage is estimated to be US$ 4,397 annually. The latest plans follow reforms introduced in 2009 primarily covering people working or living in cities or in rural areas.
As China's State Council announces the latest plans for expanding medical insurance coverage across urban areas of China - where approximately a third of the country's population is domiciled - the economy in China recently became the second largest in the world. As the results of economic success in trading activity and wealth creation emerge, the government is set to focus on reforming a fragile public healthcare system, which has been underfunded for many years.
China's leaders now want to ensure that there is adequate basic medical insurance in place to cover both urban and rural
residents - in addition to city dwellers where benefits were introduced as part of a reform process introduced in 2009 - by raising the level of insurance protection for this element of Chinese society in later stages of the ongoing health reform. The State Council has declared that there will be an increase in the level of government funded health subsidies involving the country's two public health insurance schemes; the scheme for urban workers will be increased to 200 yuan (US$30) and the rural co-operative to 120 yuan (US$18) per person.
The cost of healthcare in China has placed tremendous financial burdens on China's poorer rural population, with payments for treatment of a serious illness potentially wiping out a family's life savings. There have been calls to address this major weakness currently blighting the Chinese healthcare system. The measures now proposed, with an increase in insurance cover for a substantial part of medical costs, should eliminate the impact of high out-of-pocket payments.
Earlier reform measures in rural areas have been fairly successful, with medical insurance coverage expanding on arrangements introduced in China's cities and towns, resulting in an improvement in primary healthcare. However, steps taken to provide better state hospital care in rural areas have been criticized for not being adequate to meet patient needs.
Currently Chinese state hospitals rely on profits generated from the sale of drugs to patients, which has caused a problem with doctors taking advantage of the population by over prescribing unnecessary medications in order to increase profitability. Issues have also arisen in respect of the relatively high cost for medical treatment in state hospitals causing people to avoid seeking vital treatment.
China is working towards a landmark healthcare reform program, which is planned to be fully implemented by 2020
. As the country progresses the reforms, its main aim is to make healthcare in China affordable and modern for a population which exceeds 1.3 billion people.
The initial steps for implementation in 2011 are expected to cost the state 850 billion yuan (US$128 billion) which will expand medical coverage across the vast country from the cities to rural villages. It is estimated that 90 percent of China's rural population is currently covered by a public health insurance scheme.
In 2009 China's state council released plans for a three year program, which involved the government investing 200 billion yuan (US$30 billion) into the nation's healthcare system as part of a reform package. As China takes steps to expand the medical insurance programme, the country's huge and diverse population presents the Beijing central government with major tasks.
Part of China's overall reform program is to improve the supply of healthcare in the country by the easing of government regulations for foreign investment in private hospitals
. This move was made to relieve some of the burden on state funding, with the private health sector catering for the more affluent element of the country's population.
As China advances, the country is faced with an increasing aging
and consequently ailing population. This places extra strains on the Chinese healthcare system. As life expectancy increases across China, the reform of the health sector needs to take into account the specific issues involved with a population including 167 million people over the age of 60.
Despite China's rise as a leading economic power, the poor and high numbers of migrants have been impacted the most by failings in the state healthcare system, with some hospitals changing exorbitant prices thus making healthcare inaccessible to huge waves of society. The migrant work force has played a pivotal role in China's economic success and is expected to continue to do so in the future. However, current flaws in the medical insurance scheme often means treatment is beyond the reach of millions of Chinese migrant workers.
While China's State Council is working towards establishing an efficient and affordable healthcare system, with the expansion of medical insurance schemes, which meets the needs of patients, the country's huge population, vast geographical area and migrant population means completion of healthcare reforms will be a long process which can only be implemented in stages.
The Chinese government is hoping that the knock-on effect of expanding medical insurance coverage will be the positive impact that can bring China's economy sustainable growth in the long term. By establishing a comprehensive and reliable medical insurance scheme, it is hoped that the population will spend more money in the local economy rather than retaining savings to cover possible healthcare costs.
The wealth gap between China's rich and poor communities has grown over the last decade, with millions still struggling with rising healthcare costs. The reforms to the funding of healthcare now planned are seen as an essential step towards the country establishing an equitable healthcare system available to its 1.3 billion population.
In December 2010, over 45 million migrant workers joined China's urban workers' medical insurance system, increasing coverage to approximately 424 million Chinese residents. The medical insurance scheme for China's migrant workers is vital as it is their main source of healthcare cover. The urban workers' medical insurance system allows workers to seek treatment in Chinese cities and towns and is considered essential for the huge workforce population in China; were the employment of the migrant population is key to the Chinese economy.
Urban workers' health insurance covers residents of China in employment with medical coverage, while those unemployed are covered by resident's health insurance. In addition to these two forms of state provided health insurance, there is urban civil servants and retired workers insurance cover enabling free medical care in China. Apart from the state provide medical insurance, there is also private health insurance with has grown in popularity as the economy has become more buoyant.