Content area
Full Text
China has learned that an inappropriately designed health system and unfair economic incentives for physicians can lead to major social welfare loss.
ABSTRACT:
No other country has undergone health care reforms as dramatic as China's. Starting in 1978, China reformed its health system from a governmental, centrally planned, and universal system to a heavily market-based one. Now, three decades later, the Chinese government openly acknowledges that the reforms failed and seeks new directions. This paper adds to the literature by examining China's health care from a system perspective, describing its health services delivery, access, outcomes, and population health in the post-reform era. It also identifies the main issues in the current system and highlights the key lessons learned from China's reform process. [Health Affairs 27, no. 4 (2008): 937-948; 10.1377/hlthaff.27.4.937]
SINCE 1978, CHINA HAS IMPLEMENTED an "open door policy," rapidly reforming its social-planning economy to a market-based one. This reform principle for public financing was applied not only to agricultural production, commerce, and industry, but also to the health care system. With government deregulation and decentralization, the previous centrally planned and universal health care system was reformed into a heavily market-based one, and public financing was replaced by private financing. Such dramatic reforms serve as a large-scale natural policy experiment on private financing. Now, three decades later, China provides the world with an excellent opportunity to ask a fundamental question crucial to all health care professionals and policymakers: How is China doing in terms of health services delivery, access, and population health after the reforms? China's experience may have important policy implications for market-based health care reforms in other countries.
The Chinese health care system and its reform have long been attracting international attention.1 William Hsiao examined the system before and after reform and drew lessons learned. Therese Hesketh and Wei Zhu investigated China's health care market changes. David Blumenthal and Hsiao reviewed China's health care history and examined the Chinese government's responses to existing problems. Besides these systemwide descriptions, many studies have reported the impacts of reform on rural and urban populations.2 Detailed descriptions of innovations to specific aspects of the system have also been reported, including financing, medical savings accounts (MSAs), and insurance.3
With rapid economic growth and social change, it is...