Health Care System in China - Essay Example

HEALTH CARE SYSTEM IN CHINA The way a country's health-care system develops over time depends on economic, political, social as well as cultural factors and background. Ever since the Communist revolution and the creation of People's Republic of China, the aim of healthcare programs has been to offer proper care to all parts of the Chinese population and to maximize the productivity and use of health-care staff, financial resources as well as health care organization. The priority has been on preventive and not curative medicine, this on the basis and idea that preventive medicine is active where as curative medicine is only passive. The public health system is primarily overseen and also regulated by the Ministry of Health as mentioned before. The turn to market economy and the rapid growth of the country has seen an end to the socialist approach and witnessed the rise of privatization of medicine and health care services in a poorly regulated way that has lead to the rise of made corruption as well as inefficiency in health services delivery. China is passing through a period of dramatic economic and cultural change. It is moving from being an underdeveloped country to being a global economic powerhouse, with many health care institutions now equal in quality to the best in North America and Western Europe. However, regional differences in quality and the availability of health care are significant. China also faces the challenge of moving from a dominant ideological and cultural understanding that was antithetical to the market and profit, to one that supports the market and profit. This change will require an ideological and cultural understanding that 1. can support the transformation of China through a market economy that can significantly raise the standard of living for all its citizens, while 2. preserving the structures of trust and virtue. As with all periods of cultural transition, there are conflicting moral messages derived from the non-market culture of the recent past and the emerging ethos that is now defining China's transition. The challenges facing the Chinese health care system are enormous. Conflicts engender inappropriate economic incentives for health care personnel due to lingering inappropriate structures from the recent past, for instance. As a result of China's transformation in the last two decades from a strictly socialist economy to a full market based economy, the country's health-care services have been also transformed from social as well as public goods to market goods that are not subject to direct government planning and intervention. Liu (2004) for one contends that there has been transformation as well as enormous consequences of the transformation for urban as well as rural health-care systems. Great disparity exists in the growth in prosperity and economic well-being as well as in financing, organization as well as resources when we compare the urban and rural areas of China. This has effectively made the “China a country with two health-care systems” (Liu 2004). The health care system in urban areas is equipped with more resources and is also much better organized. Even so it suffers from financing as well as organization problems and is focused on concerns regarding cost-containment. On the other hand, the rural health care system suffers from the lack of resources, not being sufficiently organized and issues with access to basic care. The two most important control factors that come to mind, organization and financing are related to each other in a significant way and therefore any attempts to reform a health-care system needs coordinated responses to have the system to work efficiently as well as equitably. The case with China is that financing as well as administration vis-à-vis organization of the health-care system and the services it includes suffer from segmentation. To give an example, health-care system and regulation are undertaken by the Ministry of Labor and Social Security which is designated to deal with the urban health insurance sector while another ministry, this time Ministry of Health looks over for the rural sector along with the Ministry of Civic Affairs oversees for the poor urban. As such, the Health ministry is in a frail position to be able to lead any reforms in the system at the central level. In towns and cities, decentralized health insurance companies as well as organizations dominate health-care financing for the majority of people. This could be taken forward to reinforce the financing as well as delivery of health related services at the basic level. Such services are non-existent in the rural, economically less-developed area of China. Companies that offer health insurance, although largely operated by a government agency, only give cover to those in formal employment. People who find themselves outside of this system are unprotected. At the same time, drug companies and distributors are also pursuing a get rich first strategy. Various illegitimate measures, such as bribing health-care providers and tax dodging, have been used by some drug companies and distributors to reduce product cost, promote their drugs, and maximise their profits. Another key feature of China's socioeconomic transition is fiscal decentralisation. This process has had a profound effect on the way the health-care system is developing. Since governments in rich areas have more resources to invest in health than those in poorer regions, the health institutes in deprived areas have become increasingly reliant on self-financing mechanisms, which leads to increased costs for patients. With fiscal decentralisation, the government's capacity to transfer payments from rich to poor areas has also weakened. As both books delineate, greater financial autonomy in the health sector and reduced government subsidies to hospitals and health centres has led to market-oriented financing strategies for health providers that have driven up costs, reduced the provision of preventive services, and moved resources away from the poor. Such changes have contributed to the emergence of health inequalities. Since both rural and urban health insurance schemes are designed to provide cover mainly for catastrophic illness, such schemes neglect the provision of most preventive and primary services and conflict with the main goal of the health sectors-to protect population health. The community health services provided by the newly developed community health centres, as discussed by Bloom and Tang, are one of the most cost-effective ways to meet the current health needs of the urban population. However, most of these services are not covered by health insurance and the relation between community health centres and specialist hospital services is ill-defined. Village doctors now compete with township health centres, which in turn compete with county hospitals for money from patients. The referral, training, and monitoring systems have been weakened and the quality of services is not assured. Under this system, preventive services are largely being sidelined. The fractured nature of this health system is compounded by the current administration's structure. There are at least 11 ministries involved in health-system development, each with their own agenda, which makes it difficult to coordinate efforts. Regulation of the health care market has drawn the attention of health researchers and a number of studies on this topic have been undertaken in the last two decades. However, very little is known about how the Chinese government regulates health care in the current transition period. A number of institutions have been set up by the government and granted power by specific laws to manage health care and other markets or to oversee the behaviour of other organizations. In this paper these institutions are presented as the formal regulatory institutions. Examples of such institutions include the Industry and Commercial Administration and the Price System. In addition, there are institutions that despite lacking power mandated by laws to regulate others do in fact play some oversight role over health care facilities. An example is the Rectifying Incorrect Professional Ethos Office at each level of government. In this paper, these institutions are considered to be informal regulatory institutions. The following sections provide a detailed account of these institutions. All institutions in China, no matter whether old or the new, are inevitably affected by socially and culturally embedded Chinese traditional practices and values, among others, Guanxi, which is an important factor affecting regulation. One striking characteristic of Chinese society is the individual ties that people build and maintain among themselves through various connections such as family, clan, clique, friends, classmate, and colleagues, which is termed in Chinese as ‘Guanxi’. Guanxi implies a meaning of mutual bounded obligations, feelings, and mutually doing favours and exchange. The transaction of Guanxi has a long history in China and it has remained and even intensified. This also has implications for the Chinese health care system and particularly regulatory bodies. Several formal regulatory institutions exist within the structure of government administration. Some are old institutions established before the economic reform but which have been assigned new regulatory tasks in the era of the market economy. Health Bureaux at each level of the government provide an example of such institutions. Some are newly established institutions aimed at market oversight such as the Food and Drug Administration. These institutions have been established gradually during the course of the economic and institutional reforms in China. A price system is affiliated to the Price Division of the National Development and Reform Commission (NDRC) at the central level. It is responsible for overseeing the price of public service facilities and the fee charging by any government units that are authorized to charge fees. The existing price system is a relatively old institution, established at the end of 1970s. Between the end of 1970s and early 1990s, there was a National Price Bureau directly under the leadership of the State Council. During the institutional reform in 1993 the National Price Bureau was dismissed and the price administration was brought under the responsibility of the National Planning Commission, the former body of the current NDRC. The local price bureaux were at one stage combined with the local Industry and Commerce Administrations, and then were taken out from the latter to put as price bureaux under local governments. These changes reflect the exploratory nature of the Chinese reform. The Price Bureau at local level retains one of its old mandates, which is to control public service price through price setting and inspecting compliance, with the aim of making basic services affordable to the majority of people. This institution has also evolved to take on new roles in the market economy such as price monitoring and evaluation. The Price Bureau is a good example of this. It is often unaware of the extent of overcharging by hospitals. It is relatively easy for hospitals to cheat the Price Bureau by breaking down one service item into several items and by reporting more consumed medical materials and suppliers, since Price Bureau staff does not have the medical professional knowledge required to judge the appropriateness of consumed medical materials. The Price Bureau is under the leadership of the local government administration and it is de facto a bureaucratic department of the latter, although it has an upper level professional unit in the next level of government due to the dual leadership arrangement. This arrangement makes it hard for the Price Bureau to play its supervisory role as an independent institution and also means that hospitals take the sanctions by the Price Bureau less seriously, for they can approach local government to negotiate a slight sanction or exemption from the sanction. Despite the existence of a health care market, the government has not yet designed a systematic regulatory framework with clearly defined objectives. Many regulatory institutions described in this paper have not been specifically set up to regulate the health care market alone. In fact, they have been established by the government in a piecemeal manner to deal with emerging markets. They can be better understood as a coping strategy adopted by the Chinese Party-state to deal with various newly emerging problems in the transition to a market economy. A hybrid approach, comprising the old measures such as the political campaigns and the new institutions such as the FDA, has been employed in this strategy. The regulation exercised over the health care market by these institutions is actually part of this dynamic coping strategy. There are widespread medical-ethical problem in China, namely, that there is a tendency to over-use high-cost diagnostic and therapeutic interventions. In China this phenomenon is often explained in terms of a rise in defensive medicine due to an increased concern with malpractice risks. While not discounting the significance of concerns regarding malpractice suits in contemporary China, this essay lays equal, if not greater, blame on a policy regarding the payment of physicians that encourages physicians to over-use expensive diagnostic and therapeutic interventions. The funding that is currently given by the central as well as provincial authorities is significantly less than what is required to cover the huge portion of the population that is not insured. Neither is it good enough to offer adequate health promotion as well as disease prevention activities. The central government is limited in its ability to allocate more funding to the health care system since it has routine budgetary allocation. Among the most important and as of yet fairly limited sources for financing the system is to raise taxes on cigarettes (China Statistical Yearbook200) . At this point it is at forty percent, lot less than in other nations which is 66% (Hu 1997). Parts of an extra tobacco tax could better the health of the Chinese people by decreasing cigarette consumption and by potentially having those extra funds earmarked for health-care insurance funds as well as disease prevention for rural and also low-income families. Such taxes have successfully been applied for improving health-care financing in, countries from Australia and Thailand to the US itself. The benefits of additional funds from taxing tobacco by the central government will have huge (positive) implications for the health care system in China and greatly outweigh any negative impact on the tobacco industry as well as tobacco farmers (Hu 2002). Over the last 2 years, that is following the outbreaks of SARS as well as cases of avian influenza, the Government in China has begun to appreciate and the significance of investment in the health care system. Undertaking reforms to better the health-care services has become a top priority in the central government’s economic development plans. Over the long-term, the aim of the Government in China is to make China a moderate well-being society. By undertaking reforms to the financing as well as management and organization of health care, the country can establish a system which offers health protection (by providing better access to and also utilization of services) as well as social protection (through reduced poverty due to illness and diseases ) for the population. China initiated its market-oriented economic reform at the end of the 1970s. A health care market has gradually emerged in which public and private health facilities co-exist and people pay out of pocket for health services. In response, the government has over time changed its role from provider and manager of health services, as it did in the era of the planned economy, to take on a new regulatory role. New regulatory institutions have been set up in order to manage the emerging health care market. The present approach to reform will not be able to better the health status, decrease the financial burden on individuals as well as society, and better patients' satisfaction with the health provision in an equitable way all across the population. To achieve the above aims, health-system reform has to respond to current and expected socioeconomic changes in an innovative manner, appreciating the distinct features of China's health sector. List of References HU, T. W., & MAO, Z. (2002). Effects of cigarette tax on cigarette consumption and the Chinese economy. TOBACCO CONTROL. 11, 105-108. HU, T.-W. (1997). Cigarette taxation in China: lessons from international experiences. TOBACCO CONTROL. 6, 136-140. LIU, Y. (2004). China's public health-care system: facing the challenges. BULLETIN- WORLD HEALTH ORGANIZATION. 82, 532-538. STATE STATISTICAL BUREAU. (2000s). China statistical yearbook. Beijing, China Statistics Press. WANG, H., XU, T., & XU, J. (2007). Factors Contributing to High Costs and Inequality in China's Health Care System. JOURNAL- AMERICAN MEDICAL ASSOCIATION. 298, 1928-1930. Read More