Fair care for all: reforming healthcare in China

Until recently the ideal of universal, affordable healthcare was very far from a reality in China. People paid a high cost for access to medical treatment. If they could not afford the costs, they went without and suffered the consequences. Understandably, they were not happy.

‘There were a lot of demonstrations in rural areas’, says Professor Winnie Yip of the Health Economics Research Centre in Oxford’s Department of Public Health. ‘It was becoming a serious social problem.’ By the mid-2000s, the government of the People’s Republic had realised that it needed to balance its drive for economic growth with a matching emphasis on social development. It doubled its spending on health, from 1 per cent to 2 per cent of GDP, and introduced a national insurance scheme for treatment in hospitals and later in local clinics that within eight years had covered more than 90 per cent of the population.  

Professor Yip has been studying healthcare systems in China since 1995. She is well placed to observe the impact of the reforms. ‘There is more money available, and people are using services more’, she says. ‘But they are not getting effective care, because hospitals and doctors are providing unnecessary services.’

One of the main problems is the ‘fee for service’ model, according to which doctors are paid for every examination and every drug they prescribe. When Professor Yip analysed the access to care of 7,000 households she surveyed in 2009 in the rural province of Ningxia in northern China, she found that over 60 per cent of patients who saw a doctor because they had a cold were given antibiotics. ‘This over-prescribing is not only unnecessary, it is dangerous’, she says: it aids the development of antibiotic resistance. ‘China has the fastest-growing rate in the world of multi-drug-resistant TB.’

She has set up a ‘social experiment’ in the same province to investigate whether a different design for the insurance package would lead to better services for patients. ‘We are trying to shift the money from hospitals to primary health care’, she says. ‘We find that people use the village care service much more if they can be reimbursed for the costs.’

In her pilot study she is also changing the incentive system for doctors to a ‘capitation plus pay-for-performance’ system, in which they are given a fixed budget based on the number of people on their list. Further money is available to those who score highly on an annual assessment of performance, including factors such as whether patients with hypertension are appropriately followed-up and their high blood pressure controlled, or whether TB suspects are referred and followed-up for diagnosis and treatment with no delay. ‘We are telling doctors that they are responsible for the health of the population’, she says.

The study, funded by the Bill and Melinda Gates Foundation, is a partnership with Harvard University, the local Ningxia Medical University as well as Fudan University in Shanghai. It includes a strong training component that reaches all the way from county hospitals to village clinics. Policymakers at national level are watching with interest. ‘That’s the excitement of working in China’, says Professor Yip. ‘There’s a strong political willingness and determination to advance healthcare reform.’