Flexibility, training recommended
Liu Yuanli

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 to use.

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 services)?

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)

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