PLANS to revamp China's free medical care system and to introduce user-pay charges to curb costs, are expected to be approved by the State Council. It is the first overhaul of free medical care since it was introduced in 1952, when four million people were covered. Now, 170 million people benefit. Last year, they cost the State 27 billion yuan (US$4.5 billion), almost a third of China's medical bill. The government has said such spending cannot be sustained without reform. The deal worked out by a special task force calls for a social medical insurance fund with contributions from the central government and government institutions, state-run enterprises and individuals who were covered by the free medical care system. Initially, the aim is to reduce current wastage and to guarantee medical care. The ultimate goal is to provide medical insurance for all Chinese. Heading the reform programming is 43-year-old Liu Xiufeng of the National Centre of Administration for Government Medical Insurance under the Ministry of Public Health. ''The reforms will eventually lead China to a perfect social medical insurance system benefiting all Chinese,'' Mr Liu said. Health Ministry statistics show the average life expectancy in China has increased from 35 years before 1949 to 68.9 years. The death rate has dropped from 17 per 1,000 people in 1952 to 6.7. The incidence of infectious diseases fell from 8.97 per 1,000 in 1950 to 2.87 in 1991. The yearly cost of free medical care went up from 2.7 billion yuan in 1978 to 18 billion yuan in 1989, but the nation's gross national product only doubled in the same period. An investigation identifies waste, mainly of medicine, as the biggest factor. It cost three billion yuan. Some experts have calculated about 40 per cent of medicine prescribed is wasted or improperly used each year. About 60 to 70 per cent of hospital income came from the sale of medicines. Outpatient services, surgery and other service charges were low. Early in 1988, analysts warned that soaring costs would become a heavy burden on the state, and urged the central government to curb costs as quickly as possible. That year, Mr Liu, who had worked for the national medical care system since 1978, was appointed head of the National Reform Office for Free Medical Care. As a think tank of the central government, Mr Liu's office has worked out a general plan for reform, including policies and guidelines. In March 1989, the medium-sized cities of Siping, in Jilin province, Dandong, in Liaoning province, Huangshi, in Hubei province, and Zhuzhou, in Hunan province, were chosen to pave the way for nationwide reforms. Beijing, Shanghai and Tainjin had alreadybegun the process much earlier. In 1982, wage staff and workers in Beijing began sharing health care costs with their employers by paying about five per cent of expenses. Strict rules were set for reimbursement. This resulted in a sharp fall in free medical care expenditure. Last year, the Beijing municipal government spent 287 million yuan on free medical care for 1.02 million people. Mr Liu said he believed the reform should be conducted systematically in all hospitals. Under the guidelines of the general plan drawn up by his office, China will establish its own form of social medical insurance system. The reform will enable China to achieve the goal set by the World Health Organisation that everywhere should enjoy health care by the year 2000. To succeed, the new social medical insurance system needs wide support and understanding. Mr Liu's office will train professionals to promote the reform and tell people it will not affect their living standard - only reduce the waste to a minimum and promote the development of medical and health care services. ''We'll emphasise the benefits - let them all know that they contribute money to the system which will benefit them if the worst happens. Under the system, people can help each other,'' Mr Liu said. The system will not establish a single pattern medical insurance. In urban areas the basis will be the former free medical care system, while rural areas the co-operative medical care system will remain the core. Next year, the pilot scheme will extend to more cities that face different problems: Shanghai, with a huge population; Chongquing, with many senior citizens; rapidly growing Hainan and densely populated Jinan. The detailed rules, regulations and softwaredesigned to drive the reform ahead will be tested in these four cities. ''I still think China should establish its social medical insurance system through legislation,'' Mr Liu said. ''Otherwise, the reform lacks a driving force. Besides, we need to set up an arbitration body to guarantee the implementation of the general plan. We should have a consulting group to suggest ways and means to solve [problems] emerging from the reform.'' Mr Liu is confident that, in the years to come, the free medical care system will continue to act as a social stabiliser. However, much effort will be needed to perfect the system devised by his administration centre.