China Readies for a Health Care Revolution

On a recent Saturday at Beijing's Peking Union Medical College Hospital, where some of the country's best doctors and specialists practice, most of the weaknesses of China's ruined health care system are on full display. Some 20-odd men and women from across the country huddle on straw mats, waiting for care. They won't get it on a Saturday. The hospital isn't open on the weekends except for a short period on Sunday morning. So the patients wait.

A woman from Sichuan complains that she has spent close to RMB10,000 seeing different specialists, none of whom are able to give her a final diagnosis after she and her sisters have spent 20 days in Beijing. They are staying at a local homeless shelter. She declines to give her name out of fear that criticizing the system might influence her chance of getting treatment.

With an economy that now ranks third in the world behind the United States and Japan, China has a health care system that can only be described as atrocious, far down in the third-world scale with medical personnel that often simply ignore their patients, with doctors calculating their incomes on how much drugs they can pump into paying customers, an almost total lack of primary care, facilities that are unhygienic and physicians who often simply don't know what they are doing. A third of rural farmers receive no healthcare at all and fewer than half of urban residents were receiving medical care as of 2006.

China now has committed to spending a massive US$123 billion over the next three years to reform its entire health care system in one of the biggest overhauls the world has seen. But putting the resources in place to do it will put strains on the system that make it questionable what the result will be. An Asia Sentinel investigation in March found that a Taiwanese hospital group with considerable government support was failing to bring adequate medical care to its projected patient population because it couldn't hire doctors and nurses, buy needed equipment or strike a balanced payment system that charges patients reasonably but still brings in a profit.

This is in a China that is undergoing wrenching change, and medical care is one of the pressure points in the system. Urban per capita disposable income rose to Rmb15,781 in 2008, according to the National Statistical Bureau, an 8.4 percent rise in real terms over 2007. With increasing incomes, China's urban dwellers in particular are demanding more quality care. They are starting to develop so-called "developed country diseases" that the poor don't have the luxury to be afflicted by. They are also angry over massive scandals such as the tainted milk last year that led to the hospitalization of tens of thousands of babies.

The pharmaceutical system is a mess. In 2007, the government executed Zheng Xiaoyu, the former head of the State Food and Drug Administration, for taking Rmb6.5 million in bribes to let drug companies deliver substandard or fake medicines onto the market. Zheng, the highest-ranking public official to be executed since 2000, was convicted of allowing at least six fake drugs to be approved during the years he headed the food and drugs agency. He was put to death just weeks after he was arrested as China sought to clean up an industry riddled with fraud and corruption and to salvage its reputation after horrific reports of deaths from fake products sold internationally, including antibiotics. In 2006, in an all-too-typical raid, officials seized more than a ton of fake impotence and other drugs including at least 18,000 fake Viagra tablets, for instance.

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It wasn't always this way. From the 1960s through the 1980s, the communist government achieved almost universal coverage, with state-owned enterprises and rural collectives covering an estimated 90 percent of the population. That isn't to say health care coverage was very good. For much of the huge country, medical care was as much art as science, depending as much on folk remedies as trained medical personnel. But the country's famed "barefoot doctors" – peasants who were given rudimentary medical and paramedical training – promoted hygiene and treated common illnesses. Between 1949 and the 1970s, they nearly doubled China's life expectancy, from 35 years to 65. Ultimately, in an action that was as political as it was humanitarian, they were integrated into rural cooperative medical systems, which also radically diminished the influence of the western-trained doctors of China's health ministry.

But with the destruction of the command economy, China's medical system was put on its own, with orders to their medical personnel make it pay if they wanted to continue to exist. The system largely collapsed. By 2000, China was ranked 144th in the world for health care quality. By 2006, according to the World Health Organization, the government was spending only 4.7 percent of its GDP on health care, ranking 136th of 193 countries and grouped with countries like Eritrea and Turkemenistan. Medical facilities are often filthy and untended.

Now, however, as just one ingredient in the vast number of stimulus packages the government is putting in place to attempt to resuscitate the flagging economy, China could be getting one of the most comprehensive health care systems on the planet. The five-point reform plan, to be implemented in just three years, is intended to scale up the basic health protection system, create a national essential drug system, improve basic medical service delivery and equal basic public health services and reform its wrecked public hospital systems.

Every village in the country is to get a medical clinic and every county is expected to have a hospital by 2011 to ensure universal coverage of basic health services, according to the World Health Organization, which participated in the two year process of writing the massive plan.

"This process in preparing the health reform plan has set an unprecedented model in China in the formulation of major national reform policy," the WHO said. The omnibus plan includes not only the public health system but a basic medical service delivery system, a system to provide essential drug supplies and a health protection system to consist of basic medical insurance for the urban formal sector, a rebuilt rural cooperative medical system and a medical assistance program to subsidize premium and costs for the very poor. The government intends to finance or subsidize facility construction, equipment, staff salaries and the recurrent costs of the system itself.

The profit markup of selling drugs has resulted in almost universal abuse by doctors who overprescribe to supplement their incomes. It is a problem the government has long been aware of. Far too often, hospitals regard pharmacies as profit centers, with drug sales in some hospitals sometimes reaching as much as 70 percent of revenue.

As with anything in China, it remains to be seen how much of the enormous expenditure will be effective. Corruption and fraud have been endemic for decades. It is unrealistic to expect that cleaning up the system is going to happen any time soon. The patients waiting outside the Peking Union Medical College Hospital are fatalistic. Tea thermoses, bags and random items like a broom lie on the ground, marking people's spaces in line.

A man standing outside studies the wall-sized white boards displaying what doctors are available each day of the week. The table details a complicated system of added fees depending on the time of day and type of consultation. A star by a doctor's name means an added RMB300, an empty circle means RMB200 and a filled in circle is an extra RMB100. Registering for an appointment costs RMB14, but a wheeling and dealing man who calls himself Mr. Wang will wait in line and register for patients for RMB300.

The sick woman from Sichuan knits and waits. "To get a chance, you have to be here early," she said. "Tomorrow will already be too late." She knows about the healthcare reform plans to but says any change will take too long to implement. "The reforms won't help us," she said.