Health care financing in China prior to health reform 2009

Abstract

Background and Objectives: The health system of China in 1970 was an exemplary model to the world but it began deteriorating after the economic reform in 1980. In order to address the deteriorating health system, government of China implemented the ambitious health reform program in 2009, with the aim to provide “safe, effective, convenient and affordable” health service to all people by 2020. In this study we try gain more insight about the health financing system of China prior to health system reform 2009.

Methodology: Secondary data were collected from online data sets of World Health Organization (WHO), World Bank, Economic Co-operation and Development (OECD) and from publicly available reports and documents of related Ministries, and other published sources. Analysis was done with descriptive approach, focused on the three dimensions of health, namely the financing system: total health expenditure, financing source and financing scheme/agents.

Results: China’s total health expenditure (THE) from 1995 to 2008 remained below 5% of GDP. From 1995 to 2001, the Government share on health expenditure decreased continuously and reached the lowest level of 36.4 % in 2001. Private financing was the primary funding mechanism and sources of revenue for private financing were private insurance and out-of-pocket payments. Household spending on health has increased with an average growth rate of 11.5 % from 2000 to 2008. Health financing scheme was social insurance type with fragmented risk pooling.

Conclusions: Low level of public funding and heavy reliance on out-of-pocket payment were the major problem in the past decades. Hence the daunting problem of inadequate health financing ruled the last three decade of China health system.

Janaki Medical College Journal of Medical Sciences (2013) Vol. 1 (2): 46-64

DOI: http://dx.doi.org/10.3126/jmcjms.v1i2.9270