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Last Updated: Tuesday, 7 December 2004, 01:26 GMT
China's ailing health care
By Francis Markus
BBC, Shanghai

The results of a survey recently released by China's Health Ministry underline the problems facing the country's healthcare system and what many see as a pressing need for reform.

The investigation found that 36% of patients in cities and 39% in the countryside did not go to see the doctor because they were unable to afford medical treatment. Nearly 28% of those admitted to hospital left because of economic difficulties.

"There used to be an unwritten contract between the government and the people," said Wang Liang, vice president of the Shanghai Current Economics Research Institute, which advises the city government on health care reform.

Wang Qi
It's really too much for me - I might have to stop seeing the doctor next year
Wang Qi, cancer patient
"The government gave people low incomes but it looked after them from the cradle to the grave."

But more than a decade down the road of market reform, "the rich aren't satisfied with the medical care offered by the government because it's too inefficient, while the poor can't even afford it," he said.

Chinese state media said the study was conducted in late 2003 among more than 190,000 urban and rural residents. It found that the cost of medical treatment increased by 14% annually between 1993 and 2003, a rate far faster than the rise in people's incomes.

Health officials quoted in the media said a major factor was the practice by doctors of unnecessarily prescribing expensive medicines in order to increase hospital revenues.

"I think it's true that doctors take 'red envelopes' [bribes] or they prescribe expensive medicines because their incomes are so low," admitted Yu Qiusheng, a doctor at a Shanghai hospital which combines Chinese and Western medicine.

She said a doctor's average basic salary was about $360 a month.

But she said the pharmaceutical companies were also to blame because "they corrupt the doctors, and the doctors on low incomes can't resist the temptation".

Economist Wang Liang
Wang Liang said health care is now satisfying neither rich nor poor
All this adds up to the fact that even among urban Chinese who benefit from government-run medical insurance schemes, the cost of medical care is a critical issue.

"I am having Chinese medicinal treatment because the Western medicine is too expensive for me," said Shanghai cancer patient Wang Qi,

That is despite having 85% of her medical costs covered by the insurance for 18 months as a cancer sufferer.

"From next year, I will have to pay 100% of the medical costs myself up to a certain amount and then above that, the insurance will cover half the cost," said Ms Wang, 40.

"It's really too much for me. I might have to stop seeing the doctor next year."

Pilot reforms

These problems mean China is being forced to experiment with various reform schemes.

One such is in Shanghai, where two hospitals are being established with foreign ventures taking a majority shareholding, and 200 out of the city's 600 hospitals are reported to have entered into co-operation arrangements with foreign hospitals or foreign investment capital.

Faced with what they call an increasingly "bipolar society," economists such as Wang Liang advocate a course of healthcare reform, including concentrating government spending on fewer hospitals, which should be run as public services, not for profit, and contracting out the administration of hospitals, while retaining the government's supervisory role.

Chinese hospital pharmacy
Health care costs have gone up 14% a year for the last decade
But the biggest problem is that most rural Chinese have no access to medical facilities and health insurance.

State media reports say that in the countryside, the cost of an average in-patient treatment is about $270, compared with the average rural income of $315.

In poorer inland areas of central and north-western China, that ratio is even more extreme. Many families are plunged into poverty by illness.

China is currently experimenting with pilot rural health insurance schemes under which farmers pay in an annual $1.20, which is then matched by local and central governments.

Out of it they get reimbursed on a sliding scale, increasing the proportion according to the seriousness of the illness.

In one pilot area in eastern China's Anhui province, health officials told the BBC more than 90% of local farmers had signed up to the scheme.

The government says it plans to extend the scheme nationwide by 2010.

But among the problems raised by analysts are the problems with revenue.

Economists say that in many inland districts, local governments are having problems even meeting the cost of teachers' salaries, the major expense on their budgets.

There is also rural people's lack of trust in the authorities, and their unwillingness to spend even a limited amount of cash without the certainty that they will get something back for it.

"Most farmers will have to cope with the costs of medical care themselves for the foreseeable future," said an academic who closely studies the rural economy.


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