I would like to point out at the outset that judging health sector
performance is inherently a very difficult and complicated business.
You cannot as easily say that a country's health sector has done
extremely well or has totally failed, because one can use different
performance criteria such as equity, efficiency, and quality,
which can be defined and measured in different ways. There is
no international consensus on what would be the best measurement
Even though one may take issue with the rate of improvement and
inequality in benefit distribution, there is no doubt that the
general population health status has continuously improved in
China over the past 20 years or so.
However, China has done not so well with regard to public health
intervention. The principle of Prevention First has been by and
large neglected. Focusing on revenue generation and economic growth,
China's economic policy makers rarely take into account health
implications when they develop industrial policies. For example,
thus far, no major policy intervention has been put in place to
seriously curb the supply of, and demand for, tobacco products.
Undoubtedly, the availability of modern medicines and services
has improved remarkably over the past two decades.
However, while the availability of medical products and services
has increased significantly, affordability has become a major
issue due to a combination of price and insurance coverage effects.
First, medical costs outgrow income. From 1990 to 2000, the average
income increased five-fold in urban and three-fold in rural areas.
But the average medical charges increased nine-fold, doubling
or tripling the rate of income growth.
Second, insurance coverage is vastly inadequate.
Lack of affordability blocks many people's access to essential
medical care and causes financial hardship for those who utilize
services. Despite the increasing availability of medical services,
the utilization rate actually declined between 1993 and 2003,
according to the Ministry of Health national surveys. In 2003,
among those people who were ill but did not go to a doctor, about
40 per cent reported that they did not seek medical services because
of inability to pay.
There are three major strategies to increase affordability of
medical services: increasing people's income, increasing insurance
coverage and controlling medical costs.
To be fair, China has been trying on all three fronts, with obviously
much more success on the income side than on the insurance and
cost-control sides. Expanding insurance coverage has to be accompanied
by effective cost-control, in order to improve the efficiency
and sustainability of the system.
Fortunately, China's leaders are keenly aware of some of the
major issues and are re-doubling their efforts to reform and strengthen
the health system. China is a big country with significant regional
differences in geographic, socio-economic and cultural conditions.
The Chinese Government might want to consider adopting different
policies in different regions (the poor, middle-income and high-income
regions) with different levels and forms of support from the central
and local governments.
A critical value judgment as well as an operational question
for health system reform is: what should be the proper role of
the government and the market in different sub-systems (resource
supply, provision, financing, regulation) for different services
(public health, community health, primary care and tertiary care
For building a better health system, China not only needs to
develop sound policies, but also develop a critical mass of well-informed,
open-minded, and highly-responsible leaders and executives at
all levels, who can effectively implement good policies.
Through the China Initiative, my colleagues and I at Harvard
University intend to work with the Ministry of Health, Tsinghua
University and other partners to study major public health issues
in China, to conduct regular health and social development policy
dialogue, and to train senior health executives.
(August 31, 2005)