Unequal, corrupt and expensive: signs of an ailing system
Government revenues on the mainland are rising yet the country's medical system is marked by inequality, corruption and high charges for treatment.
In a major report in 2005, the Development Research Centre of the State Council concluded that the market-driven medical reforms of the previous 10 years had failed.
And the public is increasingly disgruntled. The average household on the mainland devotes 12 per cent of its spending to health care, a high proportion even compared to developed countries.
Ministry of Health statistics show that one-third of rural patients do not go to hospital because they cannot afford to pay, and 45 per cent of those who go discharge themselves early for the same reason.
In villages in western China, the proportion of sick people who cannot afford to see a doctor is 62 per cent, and 75 per cent of patients leave hospital early.
More than 400 million people have no medical insurance of any kind.
With insufficient money from the state (which provides just 17 per cent of spending in the health sector), hospitals have to make profits from selling drugs and medical services. Few are run by charities or non-profit organisations and corruption is widespread.
From the middle of 2006, 16 government ministries and commissions began to prepare wide-ranging changes, aided by the World Health Organisation, consultants McKinsey and the World Bank. By last August, the outline of the policy had been agreed and it is now before the State Council.
On December 26, Health Minister Chen Zhu told members of the National People's Congress that the policy would aim to provide universal basic services at reasonable prices, with significantly higher input from the local and national governments.
It calls from better care in rural areas and for an independent system for the production, procurement and distribution of basic drugs.
Mr Chen said the profit-driven system had imposed heavy burdens on patients and led to a waste of resources. 'We will gradually reduce the involvement of hospitals in drug sales in order to cut prices.'
Qiu Renzong, of the China Academy of Social Sciences, said: 'Patients cover 60-70 per cent of medical costs, which is unreasonable. The government coffers are full and it should contribute more.'
The greatest difficulty will be in areas with a large number of poor, unemployed and retired people, where local governments do not have the money to offer better benefits. It is they, and not the central government, that will have to find the funds.