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How China Does Health Care

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The Chinese character for "health."

Few issues have consumed public attention in the United States over the last 18 months as much as the health care debate. While much attention was paid to how other Western nations handle health care, more focus should have been placed on how China — which recently supplanted Japan as the world’s second largest economy after the United States — handles health care for its 1.3 billion citizens.

While China struggles to erect a safety net to keep up with a growing and aging population, perhaps it is a testament to our own progress as a nation that the idea of health care as a right of all citizens even exists in our discourse. It is only recently that the Chinese state has even begun to really consider health insurance — or the lack thereof — as a major social problem. Its attention could not have come a moment too soon. The Chinese insurance system is patchwork — perhaps more so even than our much-maligned American system of employer-provided insurance.

If you are a retired person living in a large urban center, you most likely have a state-sponsored insurance plan that covers most basic and emergency-related medical needs, says a 55-year-old housekeeper in Shanghai who identified herself by her surname, Wang. Though Wang continues to work most days of the week, she is considered a retired person, having ceased her formal career five years ago. She pays no annual premium, but does have an annual deductible of 1,200 Chinese yuan (about $177), and a co-pay of 10, 15, or 20 percent for all treatments and consultations, depending on which hospital in her area she goes to. Alternative plans with annual fees will reimburse up to 60 percent of co-payments.

Wang’s is a relatively comfortable situation. For working people, however, health security is far more precarious. In some ways, it’s very similar to health care in the United States: Chinese citizens must deal with uncertainty and unstable costs for years and hope to make it to retirement before any major health problems ensue. Of course, many are not so lucky.

For example, Wang’s husband, despite the fact that he is in his 60s and on long-term medical leave for diabetes, is still considered to be employed by the van-driving company for which he has worked for years.

“His employer helps him buy insurance, but since he is technically still working, he has to pay 1,500 [Chinese yuan, about $220] in addition to his deductible, and co-pays range from 20-30 percent of charges for consultations and treatments, depending on the hospital he goes to,” she says. Sometimes she uses her own insurance to get her husband the medicine he needs.

Wang also says that those who have relationships with doctors can usually get medicines for less money outside of their insurance plans. But if you don’t know a doctor, are still working, and are seriously ill, you might just be out of luck — and that’s even in urban areas.

That, in turn, does not bode well for those living in rural areas. After dismantling the commune system of huge, collectivized farms with communal living in 1978, the state did not come up with a new scheme for ensuring the health of its poorest citizens. The government has provided meager subsidies — the equivalent of $2.50 annually — to be combined with $1.25 annually from citizens, according to an article in the New England Journal of Medicine. Since the 1970s, the number of rural doctors have plummeted, and those who remain charge fees higher than what many can afford. Even access to the most basic primary care can be difficult to attain.

Dr. Chen Lu, a heart surgeon who has operated on rural children through charity programs, understands better than most the plight of many rural residents — who, according to some, number 900 million.

“The children I have operated on come from families who otherwise have absolutely no hope,” she says. “In rural areas where we work, we are some of the very few providing care to those who cannot otherwise afford it. And there is only so much we can do.”

And no matter where you live, there are some inherent limitations to the quality of care an average person in China can receive. In particular, none of the insurance plans include coverage for imported medicine. This makes it so that relatively well-known or minor ailments can be fairly easily addressed. Only the very wealthy, for example, can afford to pay for the chemotherapy, radiation treatment, or cancer-cell-targeting drugs if a family member got cancer.

“A lot of medicines are not covered by any insurance at all,” says Wang.

Dr. Chen agrees. “People with the most serious or chronic medical conditions, even among the middle class, have very few options to pursue.”

This problem is most illustrative of the comparative wealth and benevolence of a system as disorganized and unfairly structured as the United States’. Even with annual and lifetime limits on benefits, Americans have far greater access to advanced care for serious medical problems than almost any Chinese.

And, like in the United States and much of the industrialized world, health care costs are spiraling out of control. “When I started working in the late '70s,” says Wang, “I only had to pay 1 mao, or 1.5 cents in today’s value, per visit; everything else was covered. A lot of people used to go get medicine and sell to people from villages, because only people in danwei [urban work units] get that. Now it’s harder and harder to get medicine.”

Yet Wang does not approach the subject with any ruefulness or anger; and public discontent with government has mostly centered on either a lack of political rights or on labor and economic conditions in China’s manufacturing and heavy industrial sectors.

However, the issue is becoming more important to citizens. In a paper called “Public Opinion and Health Care Policy in Authoritarian China,” professor Yu Bin of the Midwest Political Science Association, writes that the frequency with which health care is named in public surveys “shows the public’s mounting concern” about a lack of access to health insurance and other social problems.

So, in recent years, local administrations and the national government have stepped up their investment in the coverage of the Chinese people, setting up programs for working people in urban areas. These programs clearly need improvement, but are a good start given the government’s track record of the last thirty years. Speaking at the China Europe International Business School Health Care Forum in June 2006, former Vice Minister of Health Rao Conggui, explained that encouraging the best distribution of medical centers across territory would be critical to further efforts.

“It is vital,” he said at the forum, “to ensure coordination among governments at different levels, as well as among different departments within the government.” This, he adds, was "the key to the success of the reform.”

Rao’s point of view encapsulates the challenge for China going forward: Its governments are increasingly flush with the resources to provide health care for citizens. The hard part will be persuading different regions and departments to work together — a weakness of China’s going back hundreds of years. If successful, China’s efforts could be a model for nations seeking to cover growing populations in an increasingly crowded world.

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