The New Health Dialogue

As a student at Peking University in Beijing in 2005-06—China's version of Harvard, without the Ivy—I was honored to be amidst some of China's best and brightest minds. I often wondered whether the person I was sitting next to at the school cafeteria eating noodles and baozi would be a future finance minister or a scientist that will cure cancer. I never once thought that some of these students would be unemployed. And uninsured. But in today's economic climate, some of them are.

After China's revolution, people got a basic level of medical care for free. That system was dismantled in the 1980s amid the economic reforms. Now China has gaps between the quality and access of care in rural and urban areas. And China has uninsured people—about 200 million of them. And costs are rising, as they are here. (NEJM had a great brief history of modern China's health system called "Privatization and its Discontents.")

So when the Central Committee of the Communist Party of China and the State Council, or the Cabinet, recently announced a three-year action plan on health reform (and a longer-term plan through 2020 as well), it brought welcome relief to many college graduates and millions of migrant workers in urban areas. This means job creation. It also means affordable heath care services for 1.3 billion citizens. Health care has become a source of tension in China today and often dubbed by the Chinese as its weakest link. Now health care will be thought of as a "public service."

Xinhua News writes:

The core principle of the reform is to provide basic health care as a "public service" to the people, which requires much more government funding and supervision.

By 2020, the world's most populous country will have a basic health-care system that can provide "safe, effective, convenient and affordable" health services to urban and rural residents, according to the tone-setting document.

This will be supplemented by a more detailed implementation plan for the three years until 2011. The plan has yet to be published, but the State Council announced earlier this year an investment plan of 850 billion Yuan ($124 billion U.S.) for the reform in three years.

See details on the plan here and here.

China's health care system has been strongly critiqued in the past for its increasing costs and poor coverage, driving many citizens to ‘alternative' treatments that are often illegal. "Medical care is a huge drain on every Chinese family," Wall Street Journal Asia writes. A Gallup Poll last November showed that the Chinese worried more about being able to pay for health care than about education, retirement or maintaining living standards. With little or no social safety net coupled with a global economic crisis, many families are driven to save more rather than spend more. That's a big problem for the Chinese government.

Like many of us here in the US, the Chinese believe that reforming health care will strengthen the economy and encourage growth. (We have written about this before). Health reforms in China may well provide opportunities for health-service providers, insurers, pharmaceutical companies and the IT industry.

While many in China are happy about this reform package, some are skeptical. It remains uncertain whether this package is enough to ease the financial burdens of 1.3 billion Chinese and get people spending again. But many of my friends, who are still living in China, tell me they are optimistic. And some hope that one day health care can change from being China's weakest link to its strongest.