China

Recent History of Health Care in China

Following the communist party gaining power in China in 1949, health care was nationalised. There were moves to ensure people acquired basic knowledge surrounding health through education. Basic primary care was also provided to rural areas.

These initial developments preceded further measures to nationalise private hospitals during the cultural revolution (1966-1976). At one point, during the cultural revolution public hospitals vastly dominated, with health care in China being provided entirely by state funded and run health care services.

However this changed later in the 1980s when the government introduced economic reforms, opening the market for private companies. Consequently, private health providers became more prevalent and thus by the 1999, only 7% of the rural population in China had health insurance.

This caused problems for many households in China. In 2008, 12.1% of a households expenditure was made up of out-of-pocket payments for health care services. This led the government to promise to provide affordable health care for all. Healthy China 2030 hopes to reduce the percentage of out-of-pocket payments as a proportion of total health care expenditure to 25% by 2030.

Public Health Insurance

By 2012, 95% of the population had health insurance. This health insurance cover basic health care and can be obtained through three insurance schemes:

• As an urban employee, through their employer, where monthly payments are deducted from their salary, essentially as a tax (payroll taxes)
• As an urban resident, covering the non-working population through subsidies provided by the government
• Through the new cooperative medical scheme which covers non-urban (rural) residents financed on the whole by government subsidies

The effect of these public health insurance schemes suggests that they have a positive impact in financially shielding Chinese households and bringing the country closer to providing universally affordable health care for its population.

Private Health Insurance

However there are significant gaps in public health insurance. This has meant that there is still definitely a market for private insurers in China, especially with the middle and upper class, with approximately 30% of the urban population in China having private health insurance and proportion increasing when comparing different stratum determined by financial status.

At the most basic level, public health insurance can reimburse expenses as a result of catastrophic illness. Inflexible plans means individuals frequently seek ways to more extensively cover themselves and avoid out-of-pocket payments should they need access to health care services not covered under public schemes.

Out-of-Pocket Payments

As public health insurance cannot cover everything, in China out-of-pocket payments inevitably are still significant in terms of total health expenditure. Due to limitations on how much of inpatient and outpatient expenses can be reimbursed, out-of-pocket payments are necessary when paying for prescription drugs, most of out-of pocket payments are made for this very reason.

Despite this, with the government pushing strategies laid out in Healthy China 2030 to reduce the percentage of total health expenditure from out-of-pocket payments, the effect they have in forcing inequality between urban and rural households with differing economic statuses is hoped to be reduced.

References:

• Goats and Soda, What China Can Teach The World About Successful Health Care (https://www.npr.org/sections/goatsandsoda/2015/04/03/397158218/what-china-can-teach-the-world-about-successful-health-care?t=1537295354317)
• BMJ, Research in health policy making in China: out-of-pocket payments in Healthy China 2030 (https://www.bmj.com/content/360/bmj.k234)
• Research Methodology, Historical Evolution of Chinese Healthcare System: a brief overview (https://research-methodology.net/historical-evolution-of-chinese-healthcare-system-a-brief-overview/)
• The Commonwealth Fund, The Chinese Health Care System (https://international.commonwealthfund.org/countries/china/)
• Inter Nations, Public Healthcare in China (https://www.internations.org/china-expats/guide/29459-health-insurance/public-healthcare-in-china-17739)
• BMJ, Social health insurance coverage and financial protection among rural-to-urban internal migrants in China: evidence from a nationally representative cross-sectional study (https://gh.bmj.com/content/2/4/e000477)
• World Health Organization, China’s new health plan targets vulnerable (http://www.who.int/bulletin/volumes/88/1/10-010110/en/)
• McKinsey and Company, Private health insurance in China: Finding the winning formula (https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/healthcare%20systems%20and%20services/health%20international/issue%2012%20pdfs/hi12_74-84%20chinaprivatehealthcare_r5.ashx)

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Emilia Chen, Oxford