JINGQING YANG. China’s enduring core values.

China.  The public health care system is getting better and Australia can help.

The health care system in the People’s Republic of China (PRC) was once a grave social concern and a major reason behind public disapproval of the government, but recent policy change that emphasises fairness, efficiency and strong government involvement has significantly elevated public confidence in the system and support of the government.

Australia’s health care system is a good model in which the Chinese health authority has shown strong interest. China is also a major market for Australian pharmaceutical and health products. Cooperation between Australia and the PRC will benefit both countries and their people.

In the three decades following the launch of economic reforms, the PRC government undertook health reform that featured withdrawal of the State. Public hospitals were given less funding but more freedom to commercialise services and charge mark-ups on drug sales to compensate the loss of government funding. Hospitals became increasingly profit-driven. Medical staff were encouraged or pressured to carry out fraudulent and corrupt activities that significantly drove up health care costs.

To make things worse, the State also retreated from another front – health insurance.

At the end of the 1970s when the economic reforms had just started, ninety percent of the population in both rural and urban areas were covered by publicly funded health insurance schemes. By the end of the 1980s, less than five percent of the rural population was covered with some form of health insurance. In the urban areas, the collapse came later but was nonetheless phenomenal. In 2003, only 43 percent of urban residents were covered by some type of publicly funded health insurance, a sharp drop from seventy percent in 1993.

By the early 2000s, the corrupt, inefficient and exploitative health care system was one of the policy areas that the public was most dissatisfied with. Complaints over accessibility and affordability of medical services were loud and widespread. The Communist Party’s governing capacity was widely questioned. Its failure to meet its ideological commitment to “serve the people” was fiercely criticised. The outbreak of SARS in 2003 testified the inefficiency of the system and raised alarms for the authorities. In 2005, the health reform was declared a failure.

The year 2009 marked a watershed for health care reform. The government, after years of vacillation and trials, finally made up its mind to face public anger and place greater emphasis on solving livelihood issues. A new round of health reform was launched which aimed at constructing a system that placed the people’s interest at the centre. Following global consensus on directions for health care systems, the PRC government promised to expand and strengthen its primary care system and to provide efficient, accessible and affordable medical services to all citizens by 2020. New co-funded public health insurance schemes that had been experimented locally were promoted across the country, including the New Rural Cooperative Medicine, the Basic Medical Insurance for Urban Residents and Urban Employee Basic Medical Insurance.

The reform gathered momentum under Xi Jinping’s government. A notable achievement in recent years is the increasing coverage of health insurance and increasingly favourable benefits targeting equality in health care. A major move in this space is the combination of the Basic Health Insurance for Urban Residents and the New Rural Cooperative Medicine, which aims to remove the dual system covering the urban and the rural sectors and to improve social justice and equality. By the end of 2018, over 95 percent of citizens were covered by a public health insurance scheme.

In line with the targets set in the 13th Five-Year Plan of Medical and Health Reform, this year the government has initiated a new type of “State retreat”. Spelt out in an important policy document jointly endorsed by ten ministries or ministerial agencies is the government’s promise to strictly control the number and size of public hospitals in order to make room for the development of the private health sector. The policy also encourages local governments to purchase health and social services from both public and private providers and promises fairness in the process. This is a ground-breaking move, indicating that the health reform has truly broken away from unmanaged commercialisation as well as from the residue of planning economy. Another breakthrough in this round of reform is the unprecedented emphasis on healthy lifestyle over curative medicine and its promise of largescale investment of resources and administrative efforts in health promotion and education programs. These policies are being implemented systematically. Their outcomes may not be clear at this stage but they are on the right track.

The PRC health care system still has many problems. The quality of medical services needs to improve, and corruption is still not completely stamped out. But people in general have more confidence in and feel more satisfied with the system. And this confidence and satisfaction have fed into their confidence in government.

The improved PRC health care system means not only improved equality and life expectations for Chinese people, but also a better business environment and more opportunities for Australia. Australia not only offers China an excellent example of a mature national health system, but can also benefit greatly from bilateral cooperation. In the process of designing rules guiding and regulating government purchase, Australia’s health care system was widely studied by PRC policy advisors as a good model. GP training is another area of potential. China’s primary health care system will need about 700,000 GPs by 2030, but it now has only about 310,000, many of whom are not adequately trained. Australia could play an important role in this regard due to its established GP system. Nurse education and age care systems are other promising areas. The Australia-China Memorandum of Understanding and Plan of Action on Health Cooperation signed in 2015 also set out other areas of cooperation, such as health systems innovation, communicable disease prevention, tobacco control and medicines policy. Given China’s increasing participation in global health governance and its huge and increasingly open market, the potential for cooperation between Australia and China in health care and commercial opportunities for Australian health industries are enormous.

Jingqing Yang is Associate Professor in China Studies at UTS. His recent publications include Informal payments and regulations in China’s healthcare system and “State and the sick role.

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4 Responses to JINGQING YANG. China’s enduring core values.

  1. Kien Choong says:

    I once heard Amartya Sen comment on the collapse of health cover (during the “reform era”), followed by a dramatic restoration to universal coverage. Sen said that the key was to convince the Chinese government. Once convinced, they reset their health policy.

    China similarly changed its policies on climate change, environment, IP rights, etc. Whereas many democracies seem stuck in suboptimal policies on health (US), climate change (Australia), homelessness (Australia), indigenous health, fiscal policy (Australia stuck with surpluses, US stuck with deficits), etc.

    There are many areas China doesn’t do well in, but public reasoning is the key to change. (Whereas public reasoning seem less effective in Western democracies!)

  2. roma guerin says:

    It is good to hear a positive story about China for a change. They have exactly the same governance problems as Australia. The difference being, they are trying to fix them.

  3. R. N. England says:

    Getting rid of fraud in medicine is a problem all over the world. Fraud is inherent in the market system. Letting the patent decide, uninformed of its effectiveness, which medicine he prefers, is fundamental to the evolution of quackery. Chinese traditional medicine was full of it. Market-based medicine thrives on the exploitation of the sick, and in the case of Chinese quackery, the mindless and criminal slaughter of endangered species. Market tradition is behind China’s particular healthcare problems. There is no better example of market failure than the transactions between the desperate and those who see a chance to profit from their desperation.

    Effective medicine is science-based. Careful experiments are done to see which treatment works best. Long-term effects are investigated. Less effective, ineffective, and dangerous (e.g. blood-letting) treatments are discarded. The mechanism by which treatments work is investigated, and the results often point to new and more effective ones. Effective healthcare is the result of the Rule of Science over human transactions in relation to health. But why stop at health?

    • R. N. England says:

      The punishment for flouting the Rule of Science comes from Nature, not from the government, which makes the Rule of Science more benevolent than the Rule of Law.

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