China translated
Does China have universal health care? A long (and better) answer
Oct 10, 2018
Photo: Reuters/China Daily
by
Viola Zhou

The short answer is “no.” China says it’s a socialist country, but a large part of its population struggles to afford medical services. Providing quality health care to a rapidly aging society is now a key challenge faced by the ruling Communist Party.

How to provide health care for millions of people is a question that has vexed countries and governments around the world.

It’s a modern notion, but nowadays we take for granted the idea that people have the right to access health services, regardless of their wealth or social standing. We also demand that the government play some role in keeping people healthy.

Americans have been arguing about whether medical insurance should be mandatory. In the UK, people are more worried that their free-for-all health care, the National Health Service, will not survive in the face of rising costs.

All countries are urgently looking for a way to achieve so-called “universal health coverage” – a commitment all members of the World Health Organization made in 2005.

The WHO has a long definition of what exactly that means:

Universal health coverage (UHC) means that all people and communities can use the promotive, preventive, curative, rehabilitative and palliative health services they need, of sufficient quality to be effective, while also ensuring that the use of these services does not expose the user to financial hardship.

In short, it means everyone can get the medical services they need, without going bankrupt. America has not achieved this, for very complex reasons. China is also far from reaching this goal, as we’ll describe in this story.

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Setting the stage

Before drilling into China, let’s get some global perspective by looking at the four main types of health care systems that exist in the world.

Illustration: Cena Lau

“These four models are what we call ‘ideal types,’ purist versions rarely seen in the real world,” explains Lawton Burns, a professor at the University of Pennsylvania’s Wharton School. “Every country has features of more than one.”

America doesn’t have a uniform health system. Its system combines all four of these models.

US veterans are in a UK-like medical system. Working people who get insurance on the job are in a German-like system. Americans of retirement age (over 65) are closest to the Canadian system. And last year, more than 12% of the US population were completely uninsured.

Just like the US, China’s health care system does not fit into a single model, says Burns. Health care expenditures come from three major sources: government subsidies, state-run insurance and out-of-pocket payments.

China runs on a mixed health care system. Photo: AFP

The China model

In China, patients do pay their medical bills. Although public hospitals are owned by the state, only a small share of their costs are covered directly by taxes. The remainder comes from insurance payments and the patients themselves.

Similar to Canada, almost the entire Chinese population is covered by state-run health insurance. But since the coverage doesn’t extend to many essential services, people still have to pay a large share of medical expenses from their own pockets.

It’s not the socialist health care that China set out with. Under Mao Zedong, the People’s Republic was responsible for running all hospitals and clinics. Health care was paid for by the government and, in rural areas, funds pooled by farmers. Services were basic, but in the then-impoverished country, the system contributed to a remarkable increase in life expectancy. 

China’s rural ‘barefoot doctors’ still care for much of the population. Photo: Xinhua/Wang Xia

After economic reforms began in 1978, and China opened its doors to the outside world, the Communist Party reduced its spending on hospitals and allowed them to make profits by charging patients.

Some key medical services are paid for by the state, such as mandatory vaccinations and treatment for certain infectious diseases like HIV and tuberculosis. China has one of the world’s highest infant vaccination rates, an important reason why the country has kept polio and measles under control, but the vaccine system has also been hit by safety scandals, as we will explain.

For most other health care services that require additional payment by patients, market reforms have resulted in severe inequality between the rich and the poor in terms of access to treatment.

At the moment, in the big cities, you can find giant hospitals equipped with some of the world’s best doctors and medical technology, while in the countryside, many people are left without the most basic medical care.

China’s mega hospitals are huge – but so are the crowds. Photo: Xinhua/Ding Ting

Giant hospitals

For a granular look at what’s happening in China, let’s visit one of these giant hospitals.

It’s located in the city center, and usually has 12 buildings, each five stories tall. Simply by buying a $10 ticket at registration, you can have a consultation with a top cardiologist or neurologist or pediatrician (medicines and tests cost extra).  

Isn’t that great? No.

Chinese patients will tell you big hospitals are not as good as they sound.

Well-educated doctors all want to work in public hospitals, where they can move up the career ladder by earning promotions in the state-run system. Because of that, China does not have enough general practitioners or family doctors, and the private sector is poorly developed.

Patients, whether they have the common cold or a serious illness like cancer, flock to the giant hospitals for treatment.

Illustration: Cena Lau

These hospitals are always crowded and noisy. You might line up behind hundreds of others for an appointment ticket and wait for hours before seeing a doctor, who will spend just five minutes with you.

“In China, the facilities at community and village clinics are not bad, but the best doctors are concentrated in the big hospitals,” said Yanzhong Huang, an adjunct senior fellow for global health at the Council on Foreign Relations. “People only trust the doctors in the hospitals.”

Even the five-minute consultation time is becoming a luxury.

More Chinese are seeking more comprehensive treatment because many of them are aging or have chronic health problems. And these mega-hospitals are struggling to keep up.       

They’re setting up temporary beds in the corridors. Or cutting short consultation times even more to accommodate the rising number of patients. Some top-ranked specialists see more than 100 patients a day.

People rush into Peking Union Hospital in Beijing in April 2016. Photo: Reuters/Kim Kyung-Hoon

An appointment with one of these top physicians could be as popular as a Justin Bieber concert ticket. Scalpers snap up tickets online with fake identity cards and booking bots, and resell them at inflated prices.

Other patients try to pull strings, asking for help from the doctors and nurses they know, in order to snag appointments.

In August, US-based Chinese writer Jianan Qian wrote movingly about her mother’s struggles with China’s health care system in an opinion essay published in the New York Times. Jian said she could not secure her mother a specialist appointment at the prestigious Huashan Hospital in Shanghai without guanxi (personal relationships) – in other words, knowing someone on the inside.

The piece triggered a heated debate on Chinese social media. Some sympathized with her, but others argued that the family does not have to befriend a doctor to get the mother treated – the majority of Chinese patients navigate the overburdened system without such relationships.

Booking madness
Zhuang Pinghui, health reporter at the South China Morning Post, shares how she landed appointments without guanxi.
My younger daughter suffered from a serious lung disease called bronchiolitis obliterans when she was two months old. For about two years, I had to take her for regular lung check-ups. Living in the capital Beijing, we were lucky to have access to one of the best children's respiratory specialists in China.
It was always a challenge to secure an appointment. I had to set alarms for the time that the “tickets” were released online – usually, it was midnight. I would keep refreshing the ticketing app, and make sure to tap “book” as soon as the tickets were out. If I was one minute late, they would all be gone.
The Beijing Children’s Hospital was crowded and noisy at all time. I would wait for hours with families from across the country, some of whom had traveled all the way from rural southwestern China. Every time, the doctor spent 10 minutes with my daughter, but she tried to answer as many questions as possible.
I never used guanxi or bribery. One time, I paid 200 yuan ($29) to buy a ticket from a scalper. The doctor found out and told me never to do it again. Another time, I stayed on a ticketing hotline for an hour before getting a slot. It wasn’t easy, but there are ways to get things done.

Inequality in life and death

As we’ve explained, it can be quite a challenge for city dwellers to get treated, but the rural population is having an even tougher time.

Disparities between urban and rural China in infant, maternity and injury mortality rates remain wide. Differences in lifestyle, education level and health care services could all contribute to the gap.  

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In terms of medical services, one major problem is access, explains Sabrina Luk, an expert on China’s health policies at Nanyang Technological University in Singapore. Since all those giant hospitals are in the cities, those in the countryside, especially in remote and mountainous areas, have to travel far every time they feel unwell.

Another problem is affordability. Almost all Chinese are covered by insurance programs run by local governments, but people do not enjoy the same benefits.

Urban employees pay high contributions to insurance programs from their income, and enjoy more benefits in return. Rural and unemployed urban population are enrolled in a cheaper, government-subsidized program, and the coverage is more limited.

Local governments manage the insurance funds themselves, so those living in wealthier regions also tend to get more generous reimbursements.

Doctor Li Shaoyou treats a young patient at his boat clinic in a rural corner of eastern China’s Jiangsu Province. Rural patients end up paying more than their urban counterparts. Photo: Xinhua/Ji Chunpeng

Here’s an example: urban workers in Shanghai paying into the system have 85% of their medical costs covered, with an annual cap of about $740,000, while rural residents in the southwestern city of Guiyang have a reimbursement rate of about 65%, capped at $29,000.

Rural households end up paying a lot from their own pockets. Major surgeries or expensive drugs often force them into crippling debt. Official data from 2015 showed that 44% of Chinese households living below the poverty line were impoverished due to illness.  

Xia Wei, a carpenter in Xishui county in the central province of Hubei, said his family has spent almost all their savings since he was diagnosed with kidney failure six months ago.

Once a month, he takes a bus to the provincial capital of Wuhan, about 70 miles away, to see a doctor. In September, his medical bills totaled about $1,200, $500 of which was covered by the state health program.

The disease prevents him, the family’s sole breadwinner, from taking up heavy carpentry work. Now Xia, his wife and two young children are living on credit and get by with occasional help from their relatives.

“I don’t know when I will be strong enough to work,” the 37-year-old said. “If we keep spending like this, maybe my wife can go out to work. Maybe we will borrow some money. I may also stop taking some of the drugs.”

Being a doctor is a prestigious job in China – but it’s not that well paid and there are plentiful risks. Photo: Xinhua/Zhang Yuwei

Doctors killed

Patients aren’t the only ones complaining about healthcare in China. Doctors are having a hard time too.

First, they’re underpaid, relatively speaking. Even after years of market reforms, the government has kept doctors’ wages and prices of some medical services at artificially low rates, says Wharton’s Professor Burns.

In 2015, Chinese physicians earned an average $13,764 a year, or 1.6 times China’s GDP per capita, according to a study published in BMC Health Services Research this year. Physicians in the US and Canada make more than 4 times their own countries’ GDP per capita.

Paid a similar amount to other state employees, some Chinese doctors make extra cash by taking kickbacks from pharmaceutical firms or even bribes from patients.

Doctors have had to be on guard for violence against medical staff. Photo: AFP

Such practices upset patients who are already sick and tired of the long waits, short consultations and high treatment costs. Their frustration has led to violence.

According to a survey from the Chinese Medical Doctor Association conducted in 2016 and 2017, 66% of the 146,000 doctor respondents said they had suffered physical or verbal assault from patients.

And since 2016, a total of 7,816 people have been prosecuted for the crime of intentionally injuring medical staff or inciting crowds at hospitals. At least eight doctors have been killed by patients or relatives of patients since 2012.

When people spend all their savings just to see a good doctor, they expect the doctors to cure the disease
- Yanzhong Huang, Council on Foreign Relations

“When people spend all their savings just to see a good doctor, they expect the doctors to cure the disease,” says Huang of the Council on Foreign Relations. “If it does not happen, the high expectations transform into high frustration.”

Yes, doctoring is still a prestigious, high-status occupation in China, but fewer and fewer people want to do it.

The best performers in China’s national college entrance exams almost never opt for medical schools. If you have any doctor friends in China, they’ll probably tell you that they do not want their children to follow the same path. Who needs the low pay and high risk?

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Health care reform

No health care model can work in the long run if both doctors and patients are unhappy. The ruling Communist Party knows that as a socialist party, failure to provide a reasonable standard of affordable health care will undermine its legitimacy.

In 2006, Beijing pledged to overhaul its health care system and asked the rest of the world to contribute ideas.

Global institutions from the World Bank to the WHO to consulting firm McKinsey sent in their advice, and a series of initiatives have since been introduced:

  • Increase the number of general practitioners (family doctors) to 700,000 by 2030 from the current 200,000.
  • Reduce the financial reliance of hospitals on drug markups.
  • Raise salaries for medical workers.
  • Expand state-sponsored insurance to cover more illnesses and drugs.
  • Support the development of private hospitals and commercial insurance.

Some of the measures are working. The share of out-of-pocket payment in China declined from 60% in 2001 to 29% in 2016.

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Continuing challenges

Much has improved. But a shortage in government funding and qualified doctors, as well as severe inequality in the delivery of medical services, are still haunting the system.

A rapidly aging population and health problems caused by pollution resulting from decades of unbridled industrial growth are only adding to the mounting challenges.

The government is also grappling with a general crisis of confidence in the medical system, especially after hundreds of thousands of children were reported in July to have been injected with faulty vaccines.

A series of drug and food safety scandals over the years have caused widespread concern over the quality of domestically made medicines. In the meantime, many foreign-made medicines are hard to access due to the expense and the long drug-approval process.

Public confidence in domestically produced drugs is low. Photo: Reuters/China Daily

Following the scandals, regulators have been sacked. Tariffs on imported drugs were slashed. And big-name pharmaceuticals companies, including London-based GlaxoSmithKline, have been punished for bribing doctors and health officials.

But despite these initiatives, and repeated pledges made by the most senior government officials, drug safety is still a hot-button issue. Many insiders blame rampant corruption and vested interests for allowing companies to circumvent regulations.

Complaints from both patients and doctors have shown no sign of fading. Public hospitals remain packed. The poor are struggling with mounting debt, while the rich are flocking to places like Hong Kong, Singapore, Japan and the US for treatment.

China has not really fundamentally solved the problem of access and affordability
- Yanzhong Huang, Council on Foreign Relations

“With all the money spent, China has not really fundamentally solved the problem of access and affordability,” says Huang. “And while you are fixing the system, the demand side has become more demanding. I am not very optimistic.”

Professor Luk says a key future challenge is to ensure stable financing of medical services. Local governments have occasionally revealed deficits in their insurance funds, and have resorted to moving money from other sources to cover the shortfall. This situation is probably much more common than official media reports would suggest.

And as for private reimbursement health insurance, well, few Chinese are covered. This market is just starting to develop, according to the Boston Consulting Group, and is growing quickly: but for now, there are very few choices for consumers.  

Many countries share the problem of how to finance their health care systems, but China is facing an especially acute one. Researchers have described China’s challenge as “getting old before getting rich.” It is not a developed country yet, but a growing share of its population is starting to retire.

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The shrinking workforce will hurt productivity, while caring for the growing elderly population will need more funding and better welfare infrastructure. It will place an enormous strain not only on the health care system, but the entire Chinese economy.

So, does China, a socialist People’s Republic, have universal health care? Here’s what we know:

  • China’s entire population is now covered by basic health care insurance, a rare achievement made by a developing country.
  • The benefits are insufficient for a huge part of the population, especially rural residents.
  • Medical bills can bankrupt families. Poor patients sometimes give up seeking treatment because of the high cost.
  • China has highly qualified doctors and advanced medical technology, but they’re only available in the big cities.
  • With the population aging, the fight for these services is becoming more intense.

One thing is for sure: China still has a long way to go before all of its 1.4 billion people can access and afford the health care services they need.

Viola is a multimedia producer at Inkstone. Previously, she wrote about Chinese politics for the South China Morning Post.