So You Think Obamacare is Radical? Take a Look at China

Under healthcare reform in China, 95 percent of citizens are insured

Villagers have intravenous therapy in a countryside clinic in Hainan Province, China. (Photo: China Photos/Getty Images)

Nov 8, 2012· 4 MIN READ
Shari Roan is an award-winning health writer based in Southern California.

While the United States was wringing its hands over passage of the Affordable Care Act during President Barack Obama's first term, the Chinese government was plowing ahead with health reform measures of its own. Now the world's largest society is on the cusp of delivering on its promise to ensure that all of its citizens have some level of health insurance coverage and decent care, according to a new report published in the November issue of Health Affairs.

The majority of China's 1.34 billion people now have some healthcare insurance coverage, delivered through one of three major public programs. The biggest gains have been made in the country's once-neglected rural areas. Moreover, the government has invested heavily in expanding its capacity to deliver care by establishing new clinics, training healthcare personnel and investing in medical technology, says the author of the report, Tsung-Mei Cheng, a health policy research analyst at the Woodrow Wilson School of Public and International Affairs at Princeton University.

Chen conducted an in-depth interview with Chinese Health Minister Chen Zhu -- a follow-up of a 2008 meeting that took place when Chen was the newly named health minister and had just begun to draw up plans for healthcare reform.

The accomplishments overseen by Chen, a hematologist with a doctorate in systems biology, are notable, Cheng told Take Part.

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"I am really impressed by what they have been able to achieve," she says. "The government, once they put their minds to it, can do it. This, to me personally, is one of the biggest takeaway messages from watching what the Chinese did: Government can actually play a critical role in creating welfare."

Healthcare reform emerged in China as a result of the country's economic reform and growth over the last four decades. The shift to a market-based system led to a collapse in government funding of healthcare facilities and hospitals and the loss of health insurance for many Chinese. Only 10 years ago, hundreds of millions of people had forsaken health insurance and could not afford care, Cheng says.

"The market approach to healthcare got them this wholly unintended consequence," she says. "The government told hospitals to basically fend for themselves. Find your own revenue. Use market mechanisms."

But that led to soaring expenses for often unnecessary care and priced poorer people out of the system, she says. "It hurt the quality of healthcare and made it unaffordable."

The first stab at reform came with the 2002 founding of a public-sector health insurance program for rural families. But healthcare reform grew exponentially beginning in 2009 when the government launched a three-year program to revamp the entire healthcare system and modernize medical care. The effort, Cheng writes, reflected the government's desire to "recommit to the ethical principle of social solidarity, and deliver on principles of 'equalization of access to public services' so that all Chinese would have basic health care."

Cheng cites the leadership of the 17th Communist Party Congress from five years ago as the driving force behind the change. "The congress said government will focus on building a harmonious society, which includes taking care of the public's basic healthcare needs. That provided the ideological underpinning."

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The changes have been eye-popping. Today, 89 percent of urban residents and 97 percent of rural residents have health insurance compared to 55 percent and 21 percent, respectively, in 2003.

Access to care has been greatly expanded. There is now one community health services center for every street in every one of China’s cities. Some residents of rural areas are accessing primary healthcare services for the first time.

"There is now much greater utilization of basic primary health care services," Chen told Cheng in the interview.

The government issues each person a resident health card that can be used to access electronic records and immunization records, make medical appointments and pay bills. Chen predicts that by 2015, 80 percent of population will possess a card, which is good for one's lifetime.

China's health system is a far different system compared to the United States, to be sure.

The benefit packages offered to Chinese citizens "are not as fully comprehensive yet as health insurance coverage in many high-income industrialized nations. But we are steadily expanding them," Chen said in the interview.

For example, the government in 2010 began providing heavily subsidized insurance coverage for selected diseases, such as pediatric congenital heart disease and leukemia, for residents in poorer, rural areas -- who generally have less coverage and access to care than urban residents -- because those conditions have well-established treatments that can prevent a huge cost burden.

Last year, the government started pilot programs to cover breast and cervical cancer, psychotic disorders, end-stage kidney disease, drug-resistant tuberculosis and HIV/AIDS. And coverage of 20 more cancers went into effect this year.

"The benefits are expanding and the rate of expansion is rapid," Cheng says. "Rural residents before had limited or no insurance."

The government also established a "National Essential Drug List" of 205 Western drugs, 102 Chinese medicine drugs and some herbal medicine that are covered by insurance. Retailers are restrained by a zero-markup law for drugs on this list.

Despite the progress, many problems remain, Chen said. The country still lacks adequate resources to care for all of its people. There is an unequal distribution of health care resources and uneven quality among clinics and healthcare professionals in various regions. Rural areas remain in the most need of improvements.

"The major challenge we will face in public health policy is meeting the rising expectations that come with rapid economic growth," Chen said in the interview. "There is still a gap between people’s expectations and what health reform has been able to deliver. . .Realizing the vision of a unified national health system easily accessible to all citizens is still some time off."

Still, other countries that struggle with healthcare reform can learn from China's rapid progress, Cheng suggests. It's clear, she says, that having a unified, coordinated effort aimed at a well-defined goal is critical to success -- something China's one-party system can embrace easier than democratic governments.

But, she adds, it's also clear that government coverage of the poor is unavoidable.

"People need to understand that when you don't have the money, you just don't have the money," Cheng says.

A mandate to force consumers to buy insurance may not be necessary, she adds. In China, rural residents are not required to buy coverage but most do because the plans are so heavily subsidized.

Finally, she says, China's experience over the past 45 years provides a lesson on the delivery of healthcare through free markets.

"The market cannot take the place of government when it comes to providing citizens with equitable access and affordable healthcare," she says. "This is not something the market can do. Nor is it reasonable for us to expect our private health insurance system to do it. That is why you need the government to step in."

Question: Can U.S. leaders learn anything from healthcare reform in China? Tell us what you think in the comments.