Chinese Healthcare System

In this article, I introduce the Chinese Healthcare System. From establishment of the People’s Republic of China till now, the Chinese healthcare have a lot of changes and revolutions. Due to the special social and economic structure, Chinese healthcare system is different from other countries healthcare system. This article will explain how dose Chinese healthcare system work? What problems dose it have? How can we manage those problems?

Background After the establishment of the People’s Republic of China in 1949, the country was recovering from the chaos of long conflicts both internally and with Japan. As a result, Chinese health conditions had declined, with health indicators at the lowest level compared with other countries at a comparable level of development (World Bank, 2004). In this period, communist party who have the whip hand support the model of the 20th century communism ideology, and trust people should to be represented by the government, should have all production together: without the private department. Formation of the Chinese healthcare system.

Therefore, since 1949, the Chinese government has gradually established a free medical care, labor insurance and cooperative medical care system as the main content of the health care system, and initially formed a socialist country’s health care system. The government owned, funded, and ran all health care facilities, including large hospitals in urban areas and small township clinics in the countryside. All providers were employees of the state. Meanwhile, private health practice and private ownership of health facilities disappeared along with other private business.

Development of Chinese healthcare system In 1950, at the First National Health Work Conference, the central government announced four fundamental principles for medical and health work: service for workers, peasants, and soldiers; prevention first; combining Chinese medicine and Western medicine; and integrating “mass campaign” into health care work as a core mechanism (Project Team of the Development Research Center of the State Council of China, 2005). Although the achievement in improving health and expanding health care infrastructure during the planned-economy period is certainly indisputable, the merits of this health system may have been overestimated.

First, as noted, health in China was extremely poor when the country gained independence. It might have been easy to improve health starting from this low point, since several urgent needs could have been easily addressed. Second, health care is not the only factor that influences health. Between approximately 1950 and 1990, nutrition, hygiene, education, living standards, and even culture changed dramatically in China (Hsiao,1995). These changes could have greatly affected improvements in health. Since the early 1980s, China has experienced fundamental economic reform and societal transformation.

In this context, the health care system—and many other public services— have undergone changes that are often characterized as privatization. As early as 1980, the Chinese Ministry of Health reviewed the situation and recommended legalizing private medical practice under strict regulation. In 1985 the State Council, the Chinese equivalent of the U. S. cabinet, directed that private medical practice be encouraged (Lim, Yang, Zhang, Feng, et al. , 2004). Urban healthcare and rural healthcare Due to the unique dual social and economic structure, health care was delivered very differently in China’s urban and rural areas.

In the cities, all revenues and expenditures were planned and controlled by the government, health services were directly organized and almost completely funded by the government, and urban residents only paid a small registration fee to receive treatment. In the rural areas, the commune was the keystone of all aspects of life. Communes, the critical institutes that represented the peasants, owned the land and organized every activity, including farming, distributing products, and supplying social services such as health care and education.

Health care was provided in the Cooperative Medical System (CMS), which was mostly financed through a commune’s collective revenue and was minimally supported by the central government in the form of low-priced medicine and equipment. The CMS operated village and township health clinics that were staffed mostly by practitioners who had only basic health care training. These so-called barefoot doctors received much publicity and praise in the West for their supposed effectiveness in meeting the needs of rural populations (Lim, M. K. , H. Yang, T. Zhang, W. Feng, Z. Zhou, 2004).

There were also dramatic changes in the rural health care system. After 1982 the rural economic system changed from the collective economy under the communes to one based on individual household decisions. As a result of this change, the CMS collapsed rapidly as it lost its institutional base for fund-raising (Project Team of the Development Research Center of the State Council of China, 2005). Financing Chinese healthcare system Financing refers to the mechanisms by which resources are mobilized to fund health sector activities. Financing has the most important and direct impact on the performance of a health system (Eggleston, K. W. Yip, 2004).

Except for external aid and donations, which constitute about 0. 1 percent of 2003 total health expenditures in China (WHO, 2006), all the money raised domestically through any kind of direct or indirect financing mechanism comes from citizens of the country. Payment Payment describes how the money, once raised, is spent: who to pay, what to pay for, and how much to pay. Payment is an essential component of any health system because payment decisions create powerful incentives that influence the actions of all the organizations and individuals in the health care system. Lipson R. , 2004).

The fee-for-service (FFS) payment method dominates in China. Under FFS, health service providers generally are reimbursed a fee for each service provided. Therefore, providers have an incentive to promote an excessive use of services, resulting in an increase in costs (David Blumenthal, M. D. , M. P. P. , and William Hsiao, Ph. D. , 2005) Structure of healthcare system In the past, China relied solely on public health care sectors to provide health care. During economic reforms in 1982, private medical practice was once again allowed in China.

In 2000 the central government issued the first regulations concerning nonprofit and for-profit health care organizations (Lee, D. , D. Yi, 2006). Nowadays, although China’s economy is dominated by the private sector, the private sectors are still less. By 2002 there were more than 200,000 private practitioners, representing about 4 percent of the total 5. 2 million health professionals in China; most of these private practitioners were located in rural areas. In that same year, approximately 12 percent of the hospitals were private (Lee, D. , D. Yi, 2006).

In 2006 a U. S. ompany acquired a formerly state-owned hospital and turned it into a members-only health maintenance organization (HMO) akin to California’s Kaiser Permanente (Lee, D. , D. Yi, 2006). Although many public hospitals are now allowed to contract out their management services (Lipson, 2004), the government approaches the ownership of hospitals with caution because of concerns that for-profit hospitals might reduce access to and the efficiency of health care. Therefore, current Chinese policy does not subsidize private hospitals and does not exempt for-profit hospitals from taxes (Eggleston and Yip, 2004).

Under this policy, the health care market in China is in effect controlled by a government-led monopoly: Public hospitals benefit from many policy advantages, such as tax breaks and revenue subsidies, while private hospitals must compete without such benefits. As Eggleston and Yip (2004) project, unless policies otherwise subsidize access through expanded insurance or subsidize providers for serving the poor and uninsured, competition for patients under distorted FFS prices will reduce rather than increase access for those who cannot afford to pay for care.

This is because providers will intentionally drop unprofitable basic services. Hospital structures Hospital structures are vastly different from place to place in China. Large cities like Beijing are well served with both general and specialist hospitals. Specialist hospitals, which are equivalent to tertiary care referral centers in the West, have excellent equipment and technology: they routinely perform cardiac surgery, angioplasty, and transplant surgery. In many rural areas, there is a structured system of local and county hospitals with increasing levels of expertise as you go up through the system.

However, there are areas of extreme poverty where the level of care leaves much to be desired. In the provinces furthest from Beijing, hospitals have little in the way of modern equipment, or even modern plumbing. Chinese health care system performance and shortcomings Firstly, the thing which need to alarm in China is the almost total absence of primary care. Even in cities, there are no independent doctors’ offices or neighborhood clinics, so people have to go to the hospital for every healthcare need. Since there is little in the way of appointment systems, crowding and confusion occur.

In a country of 1. 3 billion people, it would require an additional half-million family doctors to provide the services that are available in many Western countries. On other hand, the shortcomings of the system might have been hidden by lack of information. For example, equity was not a big concern 40 years ago, partly because health care resources were scarce and rather homogenous in general, and partly because there was little information and transparency about disparities, such as high-level Communist Party cadres receiving preferred treatment in specialized hospitals.

On the other side, as I knew, a survey of 190,000 urban and rural residents conducted by China’s Health Ministry in late 2003 found that 36 percent of patients in cities and 39 percent in the countryside avoided seeing doctors because they were unable to afford medical treatment. According to Chinese government figures, hospital visits dropped almost 5 percent between 2000 and 2003, while hospital profits increased 70 percent over the same period (Lim, M. K. , H. Yang, T. Zhang, W. Feng, Z. Zhou, 2004)

In the meantime, although the overall incidence of contagious disease in China has continued to drop, some contagious diseases—such as hepatitis, pulmonary tuberculosis, and snail fever have revived; some endemic diseases, such as HIV, have been expanding in some areas, especially in the economically deprived rural areas (Project Team of the Development Research Center of the State Council of China, 2005). By the way, the government imposed tight price regulations on medicines and procedures to control health care costs for individuals and ensure access to basic care too.

These price caps, however, had numerous unintended consequences. Problems included the emergence of a black market (where patients were charged a fee that exceeded the regulated price), overprovision of profitable high-tech services, and overuse of prescription drugs (Eggleston and Yip, 2004). An estimated 52 percent of China’s health care spending now goes to drugs, compared with the worldwide average of 15 percent (World Bank, 2004). The coverage of urban and rural community health care is too narrow, and could be worse and worse.

The result of “The Third National Health Services Survey,” told us: the urban workers who have the basic health insurance was just 30. 12 % of the population, 4. 10 % for health services at state expense, 4. 16 % for health and employee insurance, 5. 16% for buy health insurance business, 44. 18 % peple without any health insurance; rural cooperative medical care to participate in is 9. 15% of the proportion, 3. 11% all kinds of social health insurance; 8. 13% of purchase commercial health insurance, and no medical insurance accounts for 79. 11 %. ( Lee, D. D. Yi, 2006)

There is a serious shortage of primary healthcare workforce. Although doctors and nurses have social status similar to their counterparts in the West, many of the younger doctors are discontented. Promotion in the system is very slow. Moving from city to city, or even from hospital to hospital, is rarely an option, in part because it has never been a feature of Chinese life. Many former doctors who have given up medicine for better paying jobs. They may want to find a job that financial and personal rewards are much greater in healthcare areas.

On the other hand, the shortage of the attention of government also lead learning and training lag and poor primary health care infrastructure, or even difficult to carry out the basic health services. All those will cause great loss of healthcare workforce. Meanwhile, grassroots health workers lack the necessary training, business technology. The social responsibilities of health insurance are always ignored. The restrictive of commercial insurance is in a narrow range, sense of service is poor, it does not solve the problem of the health protection. Strategies and Solutions

Health care system is an important and essential system which supporting the development of society, and keeping people’s lives and health. I think the current system should be improved as follows: 1. Relieving the pressure of hospital system, increasing the investment of hospital, especially the small hospital. The structure of healthcare is more perfect system, but the pressure and burden of hospitals are still big in reality. The mainly reason that cause this situation is the serious shortage of national government investment and increasing of hospital operations costs.

That will inevitably shift the burden to patients, formed a “health treatment is difficult and expensive,” the grim situation. 2. Creating community, village-level healthcare institutions. From the establishment of China until now, village, community, medical institutions can supply the appropriate service to patients. However, the majority of towns and villages used to meet the needs of rural health care. So, as China’s health needs, establishing and improving the community, village-level medical institutions is an essential and important component.

Establishing the community, village-level healthcare institutions which have routine treatment conditions of the health care, sufficient healthcare information and efficient management. 3. Integration of the whole society resources. The key economic policy must make a lot of adjustments to establish scientific and reasonable healthcare funding to integrate all social resources. Government undertake the main part of the burden, and individual bear the rest few parts. Otherwise, contributions by the community, charity and other ways to raise funding are available.

The profit hospital can also be set up by private capital. 4. Establishing a scientific and efficient management. It is important to achieve “separate management,” Government must avoid the healthcare sector manage both the personnel and the reform of healthcare. Healthcare sector should be have the specific purpose and target to complete the reform of healthcare which is the main responsibility of health sector. The health sector need to manage all the construction and maintenance, and in particular the management of the hospital.

And the key point of improving health services of hospital should make sure the hospital far from the complex affairs and focus on improving medical technology wholeheartedly. 5. Expanding health insurance and social insurance coverage. Insurance coverage is now too narrow to improve the current situation. China general minority groups have safeguarded low or have not safeguarded, one of its primary causes is specified amount and the coverage fraction of the health insurance and the social security is excessively low. The populace lacked the safeguard, will cause the society not to be unstable inevitably, initiates the latent contradiction.

Therefore, system of safeguards’s reform also potential in must line. People lack of the security, will inevitably cause social instability, cause the potential conflicts. Therefore, the security system reform is imperative. Conclusions China who is a developing country has a largest population in the world. It is difficult for China to reform the healthcare because Chinese’s income level, social and economic structure and so on. Recognizing those unintended consequences and public discontent, China’s leaders are considering yet another round of health care reform.

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