Introduction

China’s accession to the World Trade Organization (WTO) in 2001 helped the country strengthen its ability to maintain strong economic growth rates, as well as generating tremendous benefits, with expanding trade spearheading further economic reform, attracting even higher levels of foreign investment, and fostering the rule of law. The Chinese Government now faces major challenges in developing a healthcare system to meet the diverse needs of the world’s most populous country.

One of the most fascinating aspects of China’s recent history has been the evolution of its healthcare system. While the economy has boomed over the past 20 years, China’s healthcare system has nearly imploded, partly because of strategies adopted from some US proponents of radical healthcare privatisation. Further stress is placed on the system by the increased demand caused by the extended mortality of an ageing population in a rapidly urbanising society.

Modernisation

Though still administratively hierarchical and bifurcated, the healthcare system has undergone a process of restructuring and modernisation aimed at improving standards. The Chinese Government is spending millions of dollars on developing and advancing its healthcare system. In 2004, the Chinese Ministry of Health (MoH) announced a $460m budget for healthcare expansion. With the market growing annually, the supply of healthcare professionals and the total number of hospital beds almost doubled between 1985 and 2001, according to a 2004 World Health Organization bulletin. This is largely due to China’s health system moving to a free-market system.

For a population of 1.3 billion people, China has over 300,000 healthcare facilities, ranging from large hospitals through to local community clinics, which in total provide an average of close to three beds per 1000 people. Theoretically, the majority of the population has access to treatment, although, in practice, an estimated 75 percent of the population (mainly in the rural areas) are not covered by a healthcare system. These people are limited in their ability to pay for healthcare. For all practical purposes, all rural, primary health services are now provided on a fee basis. Rural doctors charge small consultation fees and earn the bulk of their income from profits on the medicines they dispense. Separate facilities are often set up within major hospitals for traditional Chinese medicine (TCM), which remains a recognised and valued source of treatment, and the Chinese government supports the development of both TCM and Western medicine.

Systemic Problems

Although the Chinese Government has continually implemented new reforms and guidelines to restructure the healthcare sector, the current system has invited a number of criticisms: uncoordinated financing, organisational policies and pricing, to name a few. Irrational pricing has resulted in over-prescription of drugs, and a push to allocate resources towards expensive medical technology rather than public health has resulted in an imbalance of healthcare treatment and service quality. This has led to unmet medical needs with unequal access between the rich and poor, and between urban and rural areas. The emergence of new health problems reflecting a more affluent society – for example, chronic and degenerative diseases – highlights the need for major infrastructure improvements to ensure these challenges are tackled effectively.

The Chinese healthcare system offers a number of lessons, as radical privatisation of healthcare can carry enormous risks for the health of citizens and for the stability of governments. China’s leaders have begun to tackle the enormous social engineering challenge of repairing past damage and shaping a new healthcare system that fits their unique social system and culture.