Thematic Areas: Health

Health

Overview

In the first four decades after 1949 China made significant progress towards improving the health status of its population. Between 1970 and 1998 China’s under-five mortality rate declined from 120/1,000 live births to 38/1,000. During the same period life expectancy at birth rose from 61 to 71 years. These improvements were the direct product of the government’s political resolve in the early 1970’s when the proliferation of public financed community and preventive health programmes provided access to basic health care throughout the country.

China has also participated in all the major international conferences and conventions that are linked to health issues and has followed up with related programmes such as the National Programme of Action (NPA) for women and children. A major goal was primary health care for all in rural areas by the year 2000.

Despite the overall positive aspect of some key health indicators, some worrying recent trends are emerging. Since the early 1990s, mortality rates have increased in some very poor areas. It is also significant that the rate of improvement in health-related indicators during the 1990s has been slower than similar advances made in the 1980’s. This slowdown in health status can be attributed to several major factors though, fundamentally, it has to do with a substantial shift of health financing from a collective or socialized system to that of a market-oriented system. The transition has not benefited from a complementary up-to-date policy to guide and regulate the operation of the evolving health system. As a result, there have been substantial erosions in the quality and efficiency of the health care system with rapid cost escalation and reduced access to care and preventive services for the poor.

Another area of concern has to do with the changing epidemiology of disease pattern related to economic development and the aging population. To a large extent, the burden of disease has changed from childhood disorders and infectious disease to chronic or non-communicable disease,plus accidents and injury.

Assessment

Based on global indicators such as infant/under five mortality, life expectancy, and nutritional status based on children’s height or weight, China, as a whole, has made good progress in the past three decades. Certain goals were reached in the 1990s such as the eradication of the wild polio virus and reduction of infant mortality by a third and measles mortality by 95%. But, even though key mortality-based indicators have generally continued to decline, some are not declining as quickly as they were and some are even showing signs of creeping up again.

Regional variations
Across China, general health status varies a great deal. The infant mortality rate among the poorest 25% of the rural population is three times higher than among city dwellers. In the western region, especially in more remote areas, infectious diseases, malnutrition, and conditions affecting infants such as diarrhoea are still leading causes of death. The urban poor, especially the migrant population, also face serious health problems and lack of access to care. Women and children are especially vulnerable to the decline in the health care system and social safety nets.

Disease
Hepatitis B has become a hyper-epidemic disease in China with a prevalence of 60% hepatitis B virus infection, compared to 1% in the US and Japan. Chronic hepatitis B infection is the direct cause of most liver cancer, the number one cause of cancer in China.

Tuberculosis has made a powerful reappearance. The number of all reported cases increased 4.2 times from 1982 to 1997, while reported new smear-positive cases increased 32.5 times. The resurgence of this killer disease is an indication that the function of the public health system is declining. China had made much progress in controlling TB during the 1960s and 1970s using standard antibiotic treatment that was essentially free of charge. Reduced health financing in the 1980s diminished the TB programme’s effectiveness as public facilities recouped their expenses from service fees, causing low-income TB patients not to enter treatment or to drop out early. As a result, many cases of TB remained infectious thereby causing drug-resistant strains and the disease has spread.

Chronic diseases such as cardiovascular disease (including stroke) and cancer now make up two-thirds of all mortality. Both diseases are strongly associated with smoking tobacco. China has more than 320 million smokers consuming 30% of the world’s cigarette production. If current trends prevail, by the year 2025, there will be 2 million tobacco-related deaths per year and 900,000 deaths per year from lung cancer in China.

A serious threat is the spread of HIV/AIDS in China, which has been accelerating since 1994. Although the reported prevalence is still low, 18,143 cases of HIV by June 2000, it is estimated that at least 600,000 persons in China are infected. As infections increase, so do the costs to the health care system. STDs are also increasing and are inadequately addressed. Reproductive health as a whole does not receive sufficient attention, partly due to the lack of cooperation between the State Planning Commission and the Ministry of Health. Although there is a strong link between known HIV/AIDS prevalence and drug abuse and the increase in prostitution, proper surveillance of HIV pattern in the general population is still lacking.

Prevention
Preventative and primary services such as immunizations and prenatal care have become increasingly weakened, as health providers tend to cut down on services that do not produce income. Among mothers in poor counties, only 29% can afford prenatal exams, and only 6% can afford hospital delivery. Financial concerns often lead to people not seeking or receiving care when they need it. A 1992-93 survey found that of those who had been referred to a hospital for care, over 40% did not seek hospitalization on grounds of excessive cost or inability to pay. Other reports indicate that 38% of peasants receive no medical treatment whatsoever when they fall ill.

Financing Health Services
The breakdown of basic health services in the poor rural areas is the direct result of decentralization of public health funding. The most dramatic change in health financing between 1978 and 1993 was the decline of the rural cooperative medical system. At their peak in 1970, agricultural communes provided basic medical coverage for about 85% to 90% of China’s rural population. By 1981, the rural insurance coverage was about 48%, and by 1993, only about 7%. As insurance levels declined, the health system had to deal with issues of escalating costs, as well as maintaining efficiency, quality, and the provision of basic services.

Government health spending (excluding government insurance) decreased from 32% of the budget in 1986 to 14% in 1993. Payments under this system, covering 2% of the population, rose from 14% of government health spending in 1978 to 46% in 1993. State enterprise insurance, which covers 11.7% of the population, accounted for about a quarter of health spending. Risk-pooling mechanisms (government and state enterprise insurance and rural cooperative medical system) covered only 21% of the population, but accounted for 38% of health expenditures. The most significant result of these changes is that the proportion of people medically insured compared to those uninsured has, essentially, reversed .

Analysis

China’s health care system is experiencing a profound decline during the transition from a centralized planned system to a decentralised and market-based system. The changes reflect inadequate public funding and erosion in the regulation of health care providers and services. In addition, health care providers and facilities operating under the influence of a market economy have developed a tendencyto put income-generating activities as the priority leading to short-term neglect of preventive activities.

Insurance, or risk-pooling coverage
The decline of the rural cooperative medical system since the early 1980’s has spawned a significant gap between the insured and uninsured population. The 1998 government reorganization gave jurisdiction for insurance issues to the Ministry of Labour and Social Services (MOLSS). However, the MOLSS only deals with urban insurance, leaving a vacuum regarding rural areas. Only 7-10% of the rural population and about half of the urban population is covered. Increasing costs have become a heavier burden for all government and work unit sponsored insurance, and the various rural cooperative medical schemes. This translates into greater individual and family burdens for health care costs.

Even though, to a large extent, government at different levels still funds a substantial proportion of the public health and health care system, the net result, in terms of quality and efficiency, is similar to that of an unregulated privatized system. In principle, the shift to a system based on users’ fees could be made, if there were provisions to assure adequate insurance coverage, and regulations to assure the effectiveness of the public health services. In practice, regulations and coordination at all levels have not adapted to the current realities of practice and needs.

Current Trends and the lack of a solid financing system
It is reasonable to assume that by the mid 2000s current trends will lead to an even greater lack of access for basic care in most rural and poor areas and costs for inpatient care in urban areas will be too high for the average consumer to bear. Under such conditions, the overall trend for mortality will likely be reversed even in some of the better-off parts of China (today it is only reversed in the poorest areas). Failing to reduce the cost of health care and control health service practices will allow the further deterioration of public health care.

Health workers’ salaries generally are fixed low while village doctors usually receive no official salaries at all. Consultation fees are also fixed low. Therefore, medications and more expensive diagnostic tests have become the main source of income, which may result in inappropriate or over-use of medication and certain tests. The fact that medication makes up around 70% of current healthcare costs is a clear indication of this problem. (In most Western countries, medication makes up 6-12% of health care costs). The decreased utilization of health services because of prohibitive costs in turn fuels the pressures on providers to charge even more to sustain their income.

The inappropriate use of medication, especially antibiotics and injections, risks increased antibiotic resistance and blood-borne diseases. Weak management practices in the supervision and control of actual health practice and inadequate training of health care workers, especially at lower levels, may lead to unsafe practices such as: inadequate sterilization of equipment; quality problems with immunization programmes; lack of access to or utilization of important services such as maternity care; and inadequate overall quality control of pharmaceuticals, equipment and private medical practitioners.

Priority Issues

Basic services
Clearly a relatively unregulated health system based on service fees as a major source of income for health care providers will continue to erode some of the major progress gained in the past decades.The challenge is to restore broad access to health care (especially preventive care), while improving equity, efficiency, quality, and cost containment.

Capacity building
Decentralization of health funding responsibility requires central regulation and provision to assure the local allocation is adequate. The existing government fund is poorly utilized because of uneven distribution and inefficiency. The key argument, initially, is not for greater allocation for health but for better utilization through better management.

Adequate regulation and supervision of the function of health care facilities and services is necessary. This includes limiting the practice of unqualified workers, setting reasonable fees and charges, and de-linking the profit motive from medication and tests from income.

It is not clear that senior policy makers are fully aware of the state of the operation of the health system and the progress on improving health status has stalled. Awareness of the problem, and making this a national priority is an important advocacy task.

Enhancing governance
The health care system cannot be managerially based solely on free market principles, as this is the most inefficient approach. At a minimum, a market-based system requires sound monitoring and control to avoid exploitation. A large part of the public health service component must be the responsibility of the government, like other public services. A privatized fee-for-service model does not assure the proper functioning of preventive activities, though it can complement public services and should be considered as an integral part of the overall system.