Health care in China is highly inequitableBMJ 1997; 315 doi: https://doi.org/10.1136/bmj.315.7112.831i (Published 04 October 1997) Cite this as: BMJ 1997;315:831
Two decades of radical economic reform in China has had profound repercussions on access to health care, creating deep divisions between the urban and rural population, according to a new study by the World Bank.
The shift to a market economy, the collapse of rural “risk pooling” health schemes, and the predominance of fee for service treatment have led to financial access to health care becoming inequitable, says the report, Financing Health Care. China's health sector faces deep problems today, it warns.
The data are stark, especially concerning the rural population of China-around 800 million of the 1.2 billion total population. In 1975, about 85% of the rural population were covered by some form of community financed health care; now it is 10% (see figure). In 1981, 29% of the total population had no health insurance; by 1993 it was 79% (64% of the rural population and 15% of the urban population). Health spending per capita in urban areas is four times the average in rural areas. The poorest 20% of the rural population account for only about 5% of all health spending.
The lack of medical cover in rural areas results from the dismantling of the communes in the early 1980s and the collapse of the cooperative medical systems. “As a result, some 700 million rural Chinese must pay out of pocket for virtually all health services,” says the report. But these are often the people who have least money to pay. On the other hand, the 50% of urban workers who do have health insurance are much better provided for. Urban insurance schemes-government insurance for the party workers and military and university students, and state enterprise insurance for factory workers-cover just under 15% of China's population but absorb two thirds of public spending on health. Indeed, such are the benefits of health cover that labour mobility is sharply reduced because such benefits must be abandoned when moving jobs.
The World Bank's study urges the Chinese government to target the poorest villages with subsidised essential health services and to develop community financing schemes and insurance experiments. It also calls for a major study on price reform and a move away from fee for service health care, which encourages serious waste of resources.
Prices of most health services and some products are fixed below cost by the government. But healthcare providers now compensate for this by over prescribing high cost items, especially drugs and high technology diagnostic tests. Drugs accounted in 1993 for 52% of China's total health spending, compared with 15-40% in most developing countries. Unnecessary treatment is common. “Outpatients are often treated with intravenous drip solutions of glucose, vitamins, antibiotics, and other drugs-treatment that in too many cases does not constitute justified medical practice,” said the study.