This post in a response to China’s new Healthcare Reform Plan.
I don’t have to repeat the importance of healthcare. Now, finally we take the courage to work towards one. Hoorah!
Key Features of the Healthcare Reform
The health reform plan spans into 2011, budgeting an additional RMB 850 billion or 1% GDP annually, with a bit over 1/3 from the federal government.
It aims to cover 90% with healthcare insurance – a comprehensive landscape change from the mere 15% coverage as of today.
It establishes a nationwide procurement and distribution system on a list of basic drugs. The government would reign in drug prices, and public healthcare providers would retail drugs at purchase cost.
It would separate drug prescription and purchase – a break from the current hospital-also-sell-drugs system, presumably to avoid conflict of interest.
It will build a lot of new hospitals, with the goal to cover each and every village in the country.
It would provide training to 2 million healthcare personnel.
..and many, many other good stuff.
Overall, it is a tremendously exciting one and a courageous move of the government. Send in your thank-you note.
China Health, an International Comparison
If you have time, read WHO’s ultimate death book for a global health overview. Here’s a screenshot.
China, still a poor developing country, lags behind the developed in many aspects on healthcare.
The life expectancy is on average 7-8 years shorter in China than G7 countries. Want to live longer? Move to a developed country.
The infant mortality rate is much higher.
Infectious and parasitic diseases, perinatal conditions, and injuries caused much more death per person.
China’s Premature Healthcare Infrastructure
Healthcare service coverage is primary compared to G7.
And environmental infrastructure lacks.
The Disparity of Healthcare Expenditure
Even on PPP-based, China spends per capita 7.5% of the average of G7’s. Not 75%, but 7.5% - No kidding. Did somebody call China a threatening super-power?
GDP-wise, China spends 4.5%, while G7 countries spends about 8-10%. The exception is the U.S., who expends a 15% from an already forerunning GDP, without seeing obviously better health conditions other than occasional personal bankruptcy of the 16% uncovered (hearsay: most other developed countries have universal healthcare). Mystery.
China doesn’t have an established health insurance system, with over half health expenditures paid out of pocket. It is almost eye-popping that there would be a 90% coverage.
A Concern on Cost
It is a common knowledge that national healthcare cost usually overshoots, and sometimes explodes. So we have to worry about it, though it may not be a good time.
There are several “detonators.” One is aging.
The Chinese population is relatively young, but it is turning old.
Age drives up healthcare expenditure exponentially.
Another factor worth attention is healthcare price inflation. For example:
The situation of China doesn’t look good at all. Despite that unit cost increase may not be the only factor, the per capita inpatient and outpatient expenditure per treatment paced up much quicker than consumer price index.
Can We Afford it?
With many fickle economic, social and natural variables, it is near impossible to predict the future cost of a national healthcare system. I hate to be a fortune teller here.
The key question is: do you see healthcare a cost or a contribution to the economy?
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