Factors Contributing to High Costs andInequality in China’s Health Care System
Houli Wang, MDTengda Xu, MDJin Xu, MD
THE LARGEST DEVELOPING COUNTRY IN THE
world, has experienced great economic devel-opment in recent years. Since reform and theopening-up policy were implemented in 1978,the national economy has grown at an average rate of 9.6% each year, and in 2005 China’s gross domestic prod-uct (GDP) per capita reached US $1698.
Along with eco-nomic development have come social challenges. The gapbetween rich and poor has widened. In 2005, China’sGini coefficient, an indicator of income distribution dif-ference, was estimated
at more than 0.48 (for compari-son, the US Gini coefficient was 0.45 in 2004).
Althoughthe proportion of the population with incomes below thepoverty level has decreased dramatically over the past 3decades, about 21.5 million individuals are absolutelypoor (annual income
US $85) and another 35.5 millionare underprivileged (annual income US $85-$115) inChina.
More than half of the poor reside in remote west-ern counties.
One result of economic inequality is widedisparity in access to many social programs, especially inthe health care system.The first widespread health care reforms in Chinabegan in 1985, and since that time a market-driveneconomy has operated in the health care sector. Duringthe past 2 decades, China has made great strides inimproving the health status of its population.
In 1978,there were 1.08 physicians and 1.93 hospital beds perthousand population compared with 1.51 and 2.57 in2005, respectively.
In 2004, the neonatal death rate was1.54%, the maternal mortality rate was 48.3 per 100000,and the life expectancy at birth was 71.8 years.
In devel-oped nations, these figures are on the order of 0.5% (neo-natal death rate), 20 per 100000 (maternal mortalityrate), and approximately 80 years (life expectancy).
According to the World Health Organization (WHO),“Overall, people in China are living longer and healthierlives. . . . The disease profile resembles that of the devel-oped countries: 85%-90% of deaths are due to non-communicable diseases and injuries.”
Along with this progress has come an increasing burdenofmedicalexpenseanddifficultywithaccesstomedicalser-vices.
Low-income families find it difficult if not impossible to affordthe expensive medical costs. Prior to the 1985 reforms, thepatient-physician relationship was generally consideredstrong and trusting, but since 1985, this relationship ap-pears to be under increasing strain.
The high cost of health care, health care inequality,and the tension in the patient-physician relationship aredue to multiple factors. First, the allocation of health careresources between urban and rural China is uneven. Thepopulation of China reached 1.3 billion at the end of 2005 and accounted for 22% of the world’s population,while its total health care expenditures account for only2% of the total medical expenditures of the world.
About 800 million individuals live in rural areas, but 80%of the medical institutions are concentrated in cities. Fur-thermore, high-quality medical resources tend to be con-gregated in large-capacity hospitals.
This uneven distri-bution of medical resources has worsened significantlyduring the last 2 decades. In the 1970s, approximately3.5 million medical personnel were working in ruralareas but this has declined to about 500000 in the lastdecade.
Patients in rural areas have a difficult timereceiving timely medical assessment and care, leading tomore advanced disease at diagnosis and subsequenthigher medical care costs.
A second major factor is that government investmentin the health care sector has been inadequate during thepast 2 decades. National Health Accounts data show thattotal health expenditure has increased more than 40-foldover 2 decades
to US $91.8 billion in 2005, accountingfor 5.55% of China’s GDP.
However, while governmen-tal investment in the health care sector has increasedannually, its share of total health expenditure hasdeclined from 36% in 1980 to 17% in 2004.
The govern-ment’s underfunding of the public health system has had
Department of Emergency Medicine, Peking Union MedicalCollege Hospital, Chinese Academy of Medical Sciences, Peking Union MedicalCollege, Beijing, PR China.
Houli Wang, MD, Department of Emergency Medicine,Peking Union Medical College Hospital, Chinese Academy of Medical Sciences,Peking Union Medical College, Beijing, 100730, PR China (firstname.lastname@example.org).
October 24/31, 2007—Vol 298, No. 16
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