Major changes in Chinese society are transforming the population’s healthcare needs and expectations. How can the government meet current entitlements whilst creating a system to cater for future needs? Researchers at the Institute of Development Studies analyse recent reforms and potential new strategies.

Chinese society is going through several transitions:

• population ageing
• shift from infectious to non-communicable diseases
• transition to a market economy
• urbanisation and industrialisation
• social segmentation

These changes have affected urban health services in a number of ways:

• Urban residents, particularly older employees of government and state-owned enterprises, have a strong sense of entitlement to social security and services.
• A shift towards a more expensive, hospital-based style of medical care has altered the expectations of providers and users of health services.
• Funding of basic public health services has not expanded to cope with increasing numbers of poor and vulnerable people, especially migrants.

Rapid growth in claims on health insurance schemes creates difficulties for employers. State-owned enterprises are finding it increasingly hard to fund claims. The proportion of urban residents covered by health insurance has fallen. In addition, members of the large migrant groups in the cities have particular health-related needs and most are not insured. Decision-makers have to balance claims by those with insurance against pressures to meet the needs of the uninsured.

The government has to finance current claims whilst switching from a system of ill-defined entitlements to a rules-based health insurance scheme. Current plans combine a basic benefit for urban residents, contributory insurance and a voluntary private top-up. Policy-makers need to decide which health services will be available under the scheme and to convince young people that they will eventually benefit from it. The researchers suggest several strategies to smooth this transition and generate public trust in the scheme. These include:

• providing effective public health programmes with enough funds to meet growing needs and flexibility to respond to changing demands
• creating alternatives to costly hospital care for the growing numbers of elderly and finding ways to finance these services
• phasing in health insurance and subsidising membership for low-income earners –
• creating a health safety net for the poor and vulnerable
• improving rural public health systems
• developing regional plans with inter-ministerial strategies for meeting the most pressing health needs.

Source(s):
‘Financing health care in China’s cities: balancing needs and entitlements during rapid change’, Institute of Development Studies Working Paper 176, by G. Bloom, Y. Lu and J. Chen, 2002 Full document.

Funded by: UK Department for International Development; European Union

id21 Research Highlight: 10 February 2003

Further Information:
Gerry Bloom
Institute of Development Studies
University of Sussex
Brighton
BN1 9RE
UK

Tel: +44 (0) 1273 878733
Contact the contributor: G.Bloom@ids.ac.uk

Institute of Development Studies (IDS), UK

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