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China's Healthcare Reforms Progress

Posted on Mar 11, 2011 by Sergio Ulloa ()

In the latest developments in the People's Republic of China, the government has pledged to invest in improving the standards of public hospitals as part of its continuing reform programme of the state healthcare system. The overhaul of the healthcare system is being overseen by the National Development and Reform Mission of China and the State Council Medical System Reform Office who have outlined plans to increase the number of public hospitals and the quality of healthcare services. A key part of the reforms will see Chinese hospitals reduce dependency on sales of medications, which has been a major issue in creating exorbitant healthcare costs. The sale of prescription drugs within China's state hospitals has been a fundamental problem, making public healthcare unaffordable for the poorer element of Chinese society. In the latest announcement by Chinese government ministers, the state has said it will extend measures to reform the current system with the objective of ensuring public healthcare services are accessible to the nation's population of 1.3 billion people. Under the current public healthcare system, China operates on a 'fee-for-service' policy which has reached a point where spiraling healthcare costs for medication, doctors appointments and medical procedures are becoming unaffordable increasing inaccessibility for millions of people in the country. At present the cost of running the state funded Chinese healthcare system is impacted by the high proportion of expenditure on the procurement of medicines. Calls are being made for this aspect to be tackled before the Chinese government pumps significant sums of money into the public healthcare system, with the target of bringing the overall costs of running public hospitals and general healthcare more in line comparative systems in other major countries. In a key initiative, the Chinese government is embarking on a national reform of the public healthcare system, which will target the pricing of medications and an increase in the coverage of the state health insurance scheme. A major aim of the planned reforms is to increase the number of citizens covered by the government run China health insurance scheme, which will enable up to 90 percent of healthcare costs to be recovered. In addition to the reforms covering the structure of the national health insurance scheme and imposition of better cost controls, the Chinese government plans to fund the building of 300 public hospitals in the country. The flaws within the Chinese healthcare system have persisted for years resulting from basic underfunding of services and high out-of-pocket costs putting access to adequate care out of reach for a substantial number of people. As the Chinese economy has grown stronger, the government is able to take the significant steps proposed to drastically increase funding to improve the state healthcare system. China put forward plans in 2010 for US$124 billion to be invested in the healthcare reform programme over a three year period until 2012 in its bid to ensure basic medical coverage was accessible for the 1.3 billion people living in the country. The overhaul of the healthcare system is expected to have general economic benefits by promoting domestic consumption within China. The rationale is that people will become more confident with the state provision of healthcare and consequently will not have to save so much money in order to provide for potentially exorbitant medical costs. The long term goal for the Chinese government is that increase domestic spending will boost the local economy thus placing less reliance on exports. As China has become the second largest economy in the world - over taking Japan in early 2011 - the middle class population has rapidly grown and is the foundation of the economic success of the country. However, the concern is that the poorer element of society is being left behind; the healthcare reforms are, therefore, focused on ensuring access to affordable healthcare services is available to all including the more vulnerable elements of society. The government has increased the level of funding for the insurance scheme for urban workers to US$30 and the rural co-operative to US$18 per person in 2011. The improvement in healthcare funding, with better procedures and infrastructure, will include investment in modern medical equipment and the education of medical professionals as part of the government's complete overhaul of the Chinese healthcare system. The augmenting of the network of public hospitals and the expansion of the state insurance scheme is fundamental to the overall improvements to the Chinese healthcare system, which is planned to be fully implemented by 2020. The key task of the healthcare reforms in China is to ensure funds earmarked achieve value for money improvements to a system, which has been severely underfunded for many years, in order to meet the health needs of the vast population including those people living in remote areas of this massive country. In addition to the state provided healthcare facilities, the economic success and emerging wealth creation has increased the demand for private healthcare services. This has led the Chinese government to ease previous restrictions on privately run foreign hospitals in the country. By opening the door for foreign investment in the private health market, the Chinese authorities are optimistic that the growing middle class population will seek medical care from private hospitals in China, thus easing the burden on the public healthcare system.
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