Friday, 28 December 2012

There can be no real health reform without political reform

by Yanzhong Huang, Senior Fellow for Global Health
In April 2012, the director of the State Council Health Care Reform Office announced that targets set in the three-year plan for China's health-care reform had been accomplished on schedule.
There is no denying that the reform has led to expanded health insurance coverage and increased provision of public health services—it has also contributed to the strengthening of grassroots healthcare institutions. However, there has been at best mixed success in reforming the essential drug system. The past year was supposed to be a year of deepening health-care reform. The government selected about 300 pilot counties and cities for reforming public hospitals, which is considered the most important component of healthcare reform. It also announced plans to raise the reimbursement level for catastrophic illness to more than 50 percent, which is an important step toward reducing the share of out-of-pocket payments to 30 percent by 2015. Despite this, the reform has not fundamentally solved the problem of access and affordability. The officially stated 95 percent coverage rate contradicts the fact that more than 200 million migrant workers are actually not covered in China. Meanwhile, disintegrating business ethics and lack of regulatory capabilities have made food safety an unpredicted concern in China.
Driven by the need to maintain legitimacy and to stimulate domestic consumption, the new Chinese leadership is expected to commit to the building a social safety net in the coming years. For health-care reform to succeed, the new leaders have to demonstrate significant progress in reforming the public hospitals and make health care more affordable. In the absence of fundamental changes in public hospitals' financing and management structures, health-care costs will likely continue to increase rapidly. This could be exacerbated by population aging and the growing burden of chronic noncommunicable diseases (NCDs). Today, more than 80 percent of the mortality in China is attributed to NCDs, which is significantly higher than the world average (63 percent). So far, the government has not adopted a proactive approach to addressing NCDs and their risk factors (e.g., tobacco use). Sustained government funding for the healthcare sector is also threatened by local public financing problems. Local governments, which provide the lion's share of government health spending, still do not have the incentives and capabilities to effectively implement important reform measures. A fundamental overhaul of China's health sector therefore entails reforming China's archaic political system.
Read more: Council on Foreign Relations

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