蝎子的含义:Emerging issues in public health: A perspective on China’s healthcare system

Article Outline

• Summary
• Introduction
• Health outcomes in China following economic liberalization
• The role of China’s public health system and primary care in China’s health
• Policy responses
• Conclusion
• Ethical approval
• Funding
• Competing interests
• References
• Copyright

Summary 

China’s expenditure on healthcare has increased dramatically over the last 20 years, and three broad trends are seen in the associated health outcomes. First, limited improvements have been achieved to aggregate high-level health outcomes, e.g. infant mortality. Second, development of large and widening health inequalities associated with disparate wealth between provinces and a rural–urban divide. Finally, the burden of disease is shifting from predominantly communicable diseases to chronic diseases. Reasons for the limited gains from investment in healthcare are identified as: (1) increased out-of-pocket expenditure including a high proportion of catastrophic expenditure; (2) a geographical imbalance in healthcare spending, focusing on secondary and tertiary hospital care and greater expenditure on urban centres compared with rural centres; and (3) the commercialization of healthcare without adequate attention to cost control, which has led to escalation of prices and decreased efficiency. Recently, the Chinese Government has initiated widespread reform. Three key policy responses are to establish rural health insurance, partly funded by the Government (the New Rural Co-operative Medical Care System); to develop community health centres; and to aspire to universal basic healthcare coverage by 2020 (Healthy China 2020).

Keywords: China, Healthcare systems, Healthcare reform

Back to Article Outline

Introduction 

China’s economy has experienced unprecedented growth over the last 30 years. These vast increases in wealth have allowed expenditure on healthcare to rise at even faster rates. Total health expenditure increased from 1.1 billion Yuan in 1978 to 1128.9 billion Yuan in 2007, equating to approximately a 75-fold increase in health expenditure per head.¹ It is likely that this represents the biggest single increase in per capita health expenditure at any point in history. It is therefore of interest to consider what benefits such investment has delivered, why this is the case, and what could and should be done differently.

Over the last 20 years, China’s health outcomes have exhibited three broad features: relatively small improvements in aggregate outcomes, large inequalities and a changing burden of disease.², ³, ⁴ In the last 5 years, the Chinese Government has launched a number of major new policy initiatives.⁴, ⁵

This paper describes the patterns of health outcomes in China, and summarizes the extent to which policies within China’s health system and broader society have been responsible for this pattern of disease. In particular, the effects of healthcare expenses born by households, the geographical imbalance of healthcare spending and the commercialization of healthcare will be considered. The paper also outlines the Government’s current approach to healthcare reform, and considers how far these new policies are likely to address existing and future challenges.

Back to Article Outline

Health outcomes in China following economic liberalization 

In the period prior to economic liberalization, China had unusually good health outcomes for its level of economic development (as measured by income level). For example, in 1972, China’s life expectancy for gross domestic product (GDP) was significantly better than the global trend, but in 2002, it was in line with its peers (Fig. 1).⁶, ⁷ Furthermore, China’s infant mortality rates fell massively from 250 deaths per 1000 births in 1952 to 40 deaths per 1000 births in 1980; a period corresponding to only 3% growth in per capita income.

• 
  • View Large Image
  • Download to PowerPoint

• Fig. 1 

  Trends in life expectancy by gross domestic product (GDP) per head for selected countries in 1972 (top) and 2002 (bottom).

Data from the United Nations (http://data.un.org).

China is faced by large and, in some instances, widening health inequities. Examples can be found in healthcare coverage and life expectancy, where affluent provinces enjoy greater life expectancy than their poorer counterparts (Fig. 2).⁷, ⁸, ⁹

• 
  • View Large Image
  • Download to PowerPoint

• Fig. 2 

  Life expectancy by gross domestic product (GDP) per capita of 30 Chinese provinces in 2000.⁸, ⁹

China’s health outcomes and coverage are also characterized by an urban–rural divide. In rural areas, healthcare coverage is lower yet more expensive relative to average income. The distribution of spending on healthcare is skewed toward urban hospitals. In 1990, urban spending was 158.8 Yuan per capita compared with 38.8 Yuan per capita in rural areas. In 2006, the trend continued with urban spending of 2668.61 Yuan per capita and rural spending of 748.8 per capita.¹⁰

Data from 2003 to 2004 reflect worse rural healthcare service performance over a wide range of variables, including maternal care, vaccination programmes, tuberculosis testing, effective antihypertensive treatment, smoking cessation, clean water and sanitation.⁵ Regarding the prevalence of childhood malnutrition, stunting (a measure for chronic malnutrition) is 5.3 times higher in rural areas than urban areas, and being underweight (a measure of acute malnutrition) is 4.6 times more prevalent in rural areas than urban areas.⁷ It is possible that such figures underestimate the true extent of the difference, as migrant workers are included in the urban population in these analyses.

Changes in both the aggregate level and the distribution of health outcomes have been accompanied by very substantial changes in the underlying patterns of disease. Communicable disease accounted for 27.8% of deaths in 1973, compared with 5.3% of deaths in 2005. However, increases in life expectancy reached a plateau from around 1990, as the improvements from tackling communicable diseases have been outweighed by the so-called ‘diseases of affluence’.⁵, ¹¹ At present, the leading causes of death in China are cancer, heart disease, strokes and accidents. These accounted for 41.7% of deaths in 1973 and 74.1% of deaths in 2005.¹²

The leading modifiable risk factors of hypertension, cigarette smoking, physical inactivity and obesity are incompletely addressed.¹³ It is estimated that only 30% of hypertensive people are aware of their condition, and of these, only 6% receive effective treatment.¹² China accounts for one-third of the world’s smokers, yet there are limited smoking cessation programmes and only 6.1% of smokers have attempted cessation.⁵, ¹⁴, ¹⁵ Obesity, particularly in childhood, has increased from 0.9% in 1986 to 2.0% in 1996 and 7.2% in 2006, reflecting the transition to urban lifestyles, dietary changes and lack of health education.¹², ¹⁶

Back to Article Outline

The role of China’s public health system and primary care in China’s health 

The impressive health outcomes of the pre-liberalization period have been attributed to the earlier emphasis on strong preventative and public health initiatives and basic healthcare services, reaching 90% of the population.¹⁴ As outlined above, between 1978 and 2003, total spending on health increased by 11.5%, compared with the already substantial 9.6% increase in GDP.⁵ On the face of it, it seems surprising that health outcomes have exhibited such limited gains following massive increases in wealth and health expenditure.

It is likely that changes in income distribution, social structures and employment patterns have contributed to the emerging patterns of health outcomes.¹⁷ In 1990, there was a seven-fold difference between the GDPs of the richest and poorest provinces. By 2002, this had grown to a 13-fold difference.⁷ These direct differences in individual wealth are likely to have led to widening differences in health outcomes. In addition, it is argued that increased relative differences in GDP will have a detrimental impact on health.¹⁴, ¹⁸

However, to recognize the impact of these broad social changes is not to deny the importance of changes to the health system itself, particularly the effect of public health. Despite the increased resources, three key policy flaws appear to have severely limited any benefits that China’s healthcare system may have delivered through this increased investment. First, there has been growth in the proportion of healthcare costs covered directly by the household, so-called ‘out-of-pocket’ expenses. Second, while overall investment has increased, increases have been unequally distributed, both across the country and between urban and rural areas. Third, commercialization of the healthcare sector without adequate attention to cost control has led to rising prices and, therefore, decreased efficiency.

Out-of-pocket expenditure has risen most sharply since the decline of China’s communally funded basic healthcare network (Fig. 3).¹⁵ In the international arena, China’s out-of-pocket payments are much higher than those of other countries with similar or higher GDPs.⁵, ¹⁴, ¹⁵, ¹⁹

• 
  • View Large Image
  • Download to PowerPoint

• Fig. 3 

  Division of health expenditure between 1978 and 2007.¹⁰

These high levels of out-of-pocket expenditure can have devastating effects. According to the Chinese National Health Survey (CNHS), 7% of the rural population fell below the Government’s poverty line in 1998; however, if out-of-pocket medical expenditure is included, this figure rises to 10%.⁷ Catastrophic spending on healthcare (i.e. more than 30% of household income) disproportionately and increasingly impacts on the poorest rural residents (Table 1).⁵

Table 1. Population (%) with catastrophic expenditure.

In analysing these data, those patients who were deterred from seeking medical assistance due to expectations of prohibitive costs should be remembered. Data from the CNHS suggest that approximately 13% of urban residents and 19% of rural residents chose not to seek outpatient care due to cost in 2003. It is noteworthy that the highest incidence of catastrophic spending (27.5%) occurs in Beijing (a wealthy city), whilst Guizhou province (a relatively poor area) has lower catastrophic spending (17.0%). It is suggested that higher healthcare costs and a higher uptake of services in Beijing compared with lower costs and lower utilization of healthcare in Guizhou are responsible for the trend.⁵

As China becomes wealthier, expectations of health increase, thus creating an increased demand for healthcare. Alongside hospital commercialization, deficits in the supply of healthcare, particularly the provision of primary care, have driven up the cost of healthcare. Government contributions to healthcare payments have not risen to the same extent; the extra cost is met largely by out-of-pocket expenditure.⁴, ¹¹, ²⁰

There is a pronounced imbalance in China’s healthcare spending biased toward secondary and tertiary care; as Fig. 3 demonstrates, 50.5% of expenditure is on city hospitals and only 7.3% of expenditure is on township health centres.¹⁵ The distribution of medical professionals is also skewed to the urban regions. Poorer rural areas are found to have lower densities of healthcare professionals compared with urban areas (2.6 vs 6.2 per 1000), and the healthcare professionals in rural areas are less well-qualified than their urban counterparts.²¹ This maldistribution outweighs interprovince differences. This situation differs markedly from the period prior to economic liberalization when high levels of basic healthcare coverage were achieved by barefoot doctors who promoted basic hygiene, preventive healthcare measures and family planning, and treated common illnesses.¹, ⁵ The economic inequalities between rural and urban areas and between provinces have led to differences in healthcare provision. Further to this, policies that encourage decentralized health expenditure exacerbate the resource gap.

The Government’s current ambitious plans to expand insurance enrolment and thus healthcare coverage have achieved impressive results, discussed in detail below.¹⁵ However, there is also a need to address the imbalance of healthcare expenditure and challenges presented by sharp rises in costs due to hospital commercialization.

Hospital commercialization has evolved since hospitals were inappropriately incentivized in the mid-1980s. The background to this was a combination of declining public funding, technological advances and limited governmental stewardship. After the collapse of publicly funded healthcare, government regulation maintained the price of basic services below their average costs. Thus, hospitals began to increasingly use services with prices fixed above their real cost to maintain their incomes (e.g. high-technology diagnostic tests and drug prescribing). This loaded pricing structure has sometimes led to questionable diagnostic and treatment regimes.²⁰ Due to the imbalance in knowledge between healthcare professionals and the public, this largely goes unchallenged. Common examples include the over-use of diagnostics (e.g. computer tomographic scans; cost around 110 Yuan and had a regulated fee of 180 Yuan in 2000); a large number of internal referrals; and kickbacks from pharmaceutical companies for drug prescriptions made by hospitals. Antibiotics are prescribed for 75% of common colds and for 79% of hospital inpatients; the latter is twice the international average.⁴, ²² The emphasis placed upon profit by hospitals has, in part, contributed to low patient satisfaction levels with the medical service.²⁰

The above issues represent a situation that is suboptimal for individual patients and economically inefficient. High proportions of out-of-pocket expenditure lead to high rates of catastrophic expenditure and a significant burden from untreated diseases. The current hospital situation leads to cost inflation of the services they offer.

Despite obvious differences in the context of healthcare provision, China’s recent problems are in some ways analogous to those of the US system. In both systems, high proportions of uninsured families have led to detrimentally high levels of out-of-pocket expenditure. In the USA, over 50% of bankruptcy filings relate to health-incurred expenses.¹¹, ²³ Both systems face challenges in cost control and, in particular, controlling ‘profitable services’.²³, ²⁴

Back to Article Outline

Policy responses 

Since 1997, the Chinese Government has initiated widespread reform coupled with substantial investment in the healthcare system. For the first time, basic medical services in China have been defined as one of the ‘essential rights of the people’. Most reforms to date have tended to be tested in pilot programmes prior to nationwide roll out. In line with other areas of policy, broad policy has been defined by central government, with local tiers of government responsible for the practicalities of implementation and encouraged to tailor specific programmes to local conditions.²⁵

The New Rural Co-operative Medical Care System (NRCMCS) was established in 2002 by the Chinese Government. It is a voluntary insurance system into which rural residents can voluntarily enrol, funded by private contributions (one-third), local government (one-third) and central government (one-third). A primary objective of the NRCMCS is to reduce the economic burden of disease of rural residents and to protect them from impoverishment due to illness.⁴, ²⁶ The NRCMCS aims for annual premiums of medical cover to be 50 Yuan (US$7) per farmer for the western and central provinces. Of that, 20 Yuan (US$2.50) is paid in by the central government, 20 Yuan (US$2.50) by the provincial government and 10 Yuan (US$1.25) by the patient.⁴ By 2007, there were approximately 72 million peasants (83% total rural population) covered by health insurance.²⁷ The NRCMCS policy leaves local governments with considerable discretion, as they are free to choose the benefit packages and administrative arrangements for their NRCMCS according to local need, as long as they adhere to two policy guidelines: voluntary enrolment and comprehensive coverage for serious disease.²⁸

Community health centres (CHCs) were piloted in 2005 and rolled out countrywide in 2007. This reform has produced significant changes in the urban areas, with many district and community hospitals being converted into CHCs and their specialists retraining as general practitioners (GPs).²⁹ The target is for CHCs to be set up in every urban neighbourhood and to compete with hospitals, offering a substitute for hospitals’ expensive outpatient clinical services and curbing the unnecessary use of hospitals as convalescent homes. A community healthcare team usually consists of GPs, skilled nurses and public health personnel,³⁰ usually employed by local government. Unlike hospitals, the CHCs’ revenue is disconnected from the fees charged for the services they provide. The Government will provide a fixed income for the CHCs, and all fees from the patients will go back to the Government.²⁰ In addition to providing medical treatment, the teams are involved in disease prevention, rehabilitation, health promotion, medical education and family planning. However, it remains to be seen whether or not the CHCs can adequately compete with hospitals in terms of quality of care. Evaluations of CHCs’ effectiveness and impact have been limited to date. A further question remains regarding whether there will be adequate motivation for the CHCs to change from curative practice to primary care or disease prevention models when CHC revenue and service charges are disconnected.

Early in 2009, the Government launched Healthy China 2020, setting out an aspiration to achieve basic healthcare coverage for all residents living in urban and rural areas by 2020.²⁵ Initially, the plan commits to investing 850 billion RMB (US$125 billion) in healthcare over the period 2009–2011. The reform covers four strands: medical services, public health services, medical insurance and drugs supply. The medical services strand carries on the logic of earlier urban reforms with the expectation that services will be delivered in the future by public, non-profit hospitals, alongside which there will be development of grassroots-level hospitals and clinics in both urban and rural areas. Grassroots-level hospitals and clinics will also have a role in delivering public health services. The larger, specialist hospitals in urban areas will be asked to provide more support to small, local hospitals in terms of personnel, training and equipment. The Government plans to set up diversified medical insurance systems in order to cover urban employees, unemployed or self-employed urban residents, and rural residents. The proportion of people covered by basic medical insurance is expected to exceed 90% by 2011.²⁵ Finally, the Government will regulate the prices of essential drugs.²⁵

Back to Article Outline

Conclusion 

It is clear that building a basic healthcare system to cover all Chinese residents will be a long-term task.²⁹ Many regions, especially the poorer areas, are lagging behind in terms of standards of care, training and resources. The policy adjustments that will determine the success of the healthcare reform need to address the re-alignment of financial incentives to health providers, both in terms of the role of hospital commercialization and the detrimental effects of high out-of-pocket expenditure.⁴

The broad direction of policy reform in China appears well placed to tackle the major challenges identified in the system. However, further work is needed to assess the likelihood of success of the reforms, and whether these will ultimately go far enough to achieve the aims of Healthy China 2020. China will need to have rigorous objective and evidence-based assessment of the reforms to ensure that the extra resources deliver to their full potential. The analytical capacity for integrating several types of data from national surveys, facility-based routine reporting and national disease surveillance needs to be strengthened to ensure the quality, reliability and validity of the data. The traditional top-down process for policy formulation needs to become increasingly evidence-based, driven by the commitment of decision makers to make use of available information.³¹

Back to Article Outline

Ethical approval 

None sought.

Back to Article Outline

Funding 

Grants from the Chinese Government. Major grants administrated under the Eleventh 5-year Plan (2008ZX100[01-003] and 2009ZX10004-903), the Innovation Research Group of Beijing Municipal Commission of Education (PHR201007112), the National Basic Research Programme-973 of China (2011CB503806) and the National Natural Science Foundation of China for Young Scholars (30901239).

Back to Article Outline

Competing interests 

None declared.

Back to Article Outline

References 

1. Chinese Ministry of Health; 4-1-1 Total health expenditure in Annual reports of Chinese health statistics 2009. Beijing: publishing house of Peking Union Medical College; 2009. p. 82. Available from: http://www.moh.gov.cn/publicfiles/business/htmlfiles/zwgkzt/ptjnj/year2009/t-4.htm; [accessed 21. 03.10].
   • View In Article
2. Chow GC. An economic analysis of health care in China. CEPS Working Paper No. 132 Princeton: Princeton University; 2006;
   • View In Article
3. Taylor S. Wealth, health and equity: convergence to divergence in late 20th century globalization. Br Med Bull. 2009;91:29–48
   • View In Article
   • CrossRef
4. Yip W, Hsiao WC. The Chinese health system at a crossroads. Health Aff. 2008;27:460–468
   • View In Article
5. Claeson M, Wang H, Hu S. A critical review of public health in China. Available from: http://siteresources.worldbank.org/INTEAPREGTOPHEANUT/Resources/publichealth,09-13-04.pdfWashington DC: The World Bank; 2004 [accessed 21. 03.10]
   • View In Article
6. Tang S, Meng Q, Chen L, Bekedam H, Evans T, Whitehead M. Tackling the challenges to health equity in China. Lancet. 2008;372:1493–1501
   • View In Article
   • Abstract
   • Full Text
   • Full-Text PDF (301 KB)
   • CrossRef
7. Liu AD, Zhao LY, Yu DM, Yu WT, Jia FM, Zhang JG, et al. Study on malnutrition status and changing trend of Chinese children less than 5 years. J Hyg Res (Chin). 2008;37:324–326
   • View In Article
8. China statistical yearbook. Available from: http://www.stats.gov.cn/tjsj/ndsj/2008/html/D0306e.htm2008;
   • View In Article
9. Annual reports of Chinese health statistics. Available from: http://www.moh.gov.cn/publicfiles/business/htmlfiles/zwgkzt/ptjnj/year2009/fl1.htm2009;[accessed 21. 03.10]
   • View In Article
10. Annual reports of Chinese health statistics. Available from: http://www.moh.gov.cn/publicfiles/business/htmlfiles/zwgkzt/ptjnj/year2009/t-4.htm2009;[accessed 21. 03.10]
    • View In Article
11. Yang GH, Kong LZ, Zhao WH, Wan X, Zhai Y, Chen LC, et al. Emergence of chronic non-communicable diseases in China. Lancet. 2008;372:1697–1705
    • View In Article
    • Abstract
    • Full Text
    • Full-Text PDF (203 KB)
    • CrossRef
12. Ma GS, Li YP, Wu YF, Wan X, Zhai Y, Chen LC, et al. The prevalence of body overweight and obesity and its changes among Chinese people during 1992 to 2002. Chin J Prev Med (Chin). 2005;39:311–315
    • View In Article
13. He J, Gu DF, Wu XG, Reynolds K, Duan XF, Yao CH, et al. Major causes of death among men and women in China. N Engl J Med. 2005;353:1124–1134
    • View In Article
    • CrossRef
14. Hsiao WC, Liu Y. Economic reform and health – lessons from China. N Engl J Med. 1996;335:430–432
    • View In Article
    • MEDLINE
    • CrossRef
15. Peto R, Chen ZM, Boreham J. Tobacco: the growing epidemic in China. CVD Prev Control. 2009;4:61–70
    • View In Article
16. National Task Force on Childhood Obesity , National Center for Women’s and Children’s Health , Ding ZY. National epidemiological survey on childhood obesity, 2006. Chin J Pediatr (Chin). 2008;46:179–184
    • View In Article
17. WHO, Committee of Social Determinants of Health. Geneva; WHO Press; 2006 [accessed 21. 03.10].
    • View In Article
18. Marmot M. Social determinants of health inequalities. Lancet. 2005;365:1099–1104
    • View In Article
    • Abstract
    • Full Text
    • Full-Text PDF (80 KB)
    • CrossRef
19. Huang CR, Liang HC, Chu C, Rutherford S, Geng QS. The emerging role of private healthcare provision in China: a critical analysis of the current health system. Asia Health Policy Program Working Paper No.10. Available at SSRN: http://ssrn.com/abstract=1658564. Social Science Electronic Publishing, Inc; 2009 [accessed 21. 03.10].
    • View In Article
20. Yip W, Hsiao W, Meng QY, Chen W, Sun XM. Relignment of incentives for health-care providers in China. Lancet. 2010;375:1120–1130
    • View In Article
    • Abstract
    • Full Text
    • Full-Text PDF (242 KB)
    • CrossRef
21. Anand S, Fan VY, Zhang JH, Zhang LL, Ke Y, Dong Z, et al. China’s human resources for health: quantity, quality, and distribution. Lancet. 2008;372:1774–1781
    • View In Article
    • Abstract
    • Full Text
    • Full-Text PDF (133 KB)
    • CrossRef
22. Liu XZ, Liu YL, Chen NS. The Chinese experience of hospital price regulation. Health Policy Plan. 2000;15:157–163
    • View In Article
    • MEDLINE
    • CrossRef
23. Bennett KJ, Powell MP, Probst JC. Relative financial burden of health care expenditures. Soc Work Public Health. 2010;25:6–16
    • View In Article
24. Reinhardt UE, Hussey PS, Anderson GF. U.S. health care spending in international context. Health Aff. 2004;23:10–25
    • View In Article
25. CPC Central Committee and State Council . Opinions of the CPC Central Committee and State Council on deepening the health care system reform. Available from: http://shs.ndrc.gov.cn/ygjd/ygwj/t20090408_271138.htm2009;[accessed 21.03.10]
    • View In Article
26. Ministry of Health . Research on health services in western part of China. Beijing: MOH; 2004;
    • View In Article
27. Chen Z. The new rural cooperative medical system basically covering the whole country in 2008. Beijing: State Council Information Office of the People's Republic of China; 2007-09-05. Available from: http://www.scio.gov.cn/gzdt/ldhd/200709/t125968.htm; [accessed 21. 03.10].
    • View In Article
28. Central Committee of the Communist Party of China . Decisions of the Central Committee of the Communist Party of China and the State Council on further strengthening rural health work. Beijing: CPC; 2002;
    • View In Article
29. Liang W, Chan DKY. Community health care reform and general. Med Educ Online. 2004;9:10
    • View In Article
30. Division of Primary and Women’s Health, Ministry of Health . Opinions about development of community health services in the cities. Document No. 326 1999;[accessed 21. 03.10]
    • View In Article
31. Guo Y, Shibuya K, Cheng G, Rao K, Lee L, Tang S. Tracking China’s health reform. Lancet. 2010;375:1056–1058
    • View In Article
    • Full Text
    • Full-Text PDF (57 KB)
    • CrossRef
32. Liu Y, Rao K, Wu J, Gakidou E. China’s health system performance. Lancet. 2008;372:1914–1923
    • View In Article
    • Abstract
    • Full Text
    • Full-Text PDF (197 KB)
    • CrossRef