Introduction to Health Sector Reform in China - Term Paper Example

? INTRODUCTION Changing realities at the local level of governance in China appear to be altering the foundations of financial access to the resources of healthcare. In systems with a minimal, or rudimentary financing apparatus for the health system, there is a direct correlation between immediate financial resources and access to care. Healthcare inequality translates directly into financial inequality. These challenges have never been fully redressed since the rise to power of the Communist party, but the difficulties have shifted over time. In the last quarter century; China has made great strides economically, and socially, with a gross domestic product that has increased over five-fold in the past 30 years. (IBM, 2006) But healthcare for the population at large has lagged behind other markers of success. During the first few decades of the current Chinese regime the resources of the local principality had much to do with access to resources. In rural areas, regional organization at the local level attempted to meet the medical needs of those in the district. In urban areas, the work unit was the most important unit of local governance in terms of health-care access. THE RURAL SYSTEM With the end of the pure socialism of communal living, and the financial erosion of the work-unit system in urban areas, it is more standard for individual inequalities to be the determining factor for healthcare access.(Duckett, 2007) Low-income individuals without health-insurance may be able to cover a few minor medical incidents, but income inequities are likely to bring on financial insolvency, even when patients are able to pay. Where these financial inequities persist in a market with little viable insurance; the legitimate need for healthcare then becomes one more cause of poverty. (Mackintosh 2001: 175). Though efforts are underway to re-establish a cooperative system of health financing. By the late 1970s, The medical system in China was wedded to the over-arching government bureaucracy. Health services were just one more facet of the apparatus of administration and social control in a command economy. A World Bank study has observed that by 1975 ‘almost all the urban population and 85 per cent of the rural’ had a form of insurance that was at least able to provide the most basic of medical services, as well as cost-effective preventives, and sometimes curative treatments. This also entailed financial risks that to some extent, the population shared, in addition to the benefits in life expectancy. (World Bank 1997: 2), (World Bank 1992). In Rural regions the 1960's and 70's saw many of these benefits in the form of vaccines and contraceptives; under the auspices of local control based upon the older system of rural communities funding the majority of their own health services. (Huang 1988; Kan 1990:42). Under the older system, rural areas typically had a three-tiered system of regional organization was responsible for the administration of health-services. There were hospitals at the county level, Health centers for communes that could provide referral services and the supervision of preventative treatments; and the communes. Individual village/communes had health stations staffed by rural practitioners sometimes known as ‘barefoot doctors’ (Bloom & Gu 1997). These local-level commune health centers would report to the district commune-management communist party committee. The next step above them in medical matters was the county-level general hospital, for a higher level of technological support and supervision. But all of these institutions were under the auspices of a county health bureau, for the purpose of administration, rather than actual treatment. The intent was to bring new dimensions of health-care to rural areas previously bereft of them in years before. Attempts where made in the late 60's and 70's, what might be termed the late Mao era, to introduce an apparatus of collective funding, similar to health insurance programs to better assist the rural health-system for most villages. And for many rural residents, this at least improved physical access to health services. For jurisdictional purposes the insurance-like policies were integrated into the bureaucracy of agricultural production and social services. (Liu et al. 1999: 1354). In rare cases, similar to the SARS phenomenon of 2003, doses of Central funding was injected into the rural system, for the purpose of wide-spread vaccination. Typically, under the older structure, the smaller, rural systems were funded by local commune welfare funds that often tapped household donations. The county and communist party commune-leadership (the highest two of the three-tiers) benefited from state financing, but the lowest levels of local control typically could not cash in on the largess of the Central coffers. The village/communes were mostly responsible for funding their own needs. (Huang, 1988) Essentially, each villager was very likely, under the Late Maoist system to have equivalent physical and financial access, the actual quality and effectiveness of those treatments was sharply limited by whatever funds the villagers could scrape together; and it is not difficult to imagine complex surgeries with extensive convalescence being out of reach under these circumstances. Under this attempt at pure socialism, the affluence of your community would become the deciding factor in terms of your quality of care. (World Bank 1983: 50, 9). THE URBAN SYSTEM Urban health services were the responsibility of clinics and hospitals under the authority of the Ministry of Health and its subsequent urban and district health bureaus. A separate, parallel system supported the military, certain large state-run enterprises, and public universities, often equipped with their own restricted clinics for the purpose of health services directly to their own personnel and familial dependents. (World Bank 1983). The Ministry of Health has authority than places urban/municipal and district hospitals under its control, as well as smaller neighborhood clinics or health ‘stations’, who experienced a degree of autonomy during the Cultural Revolution. In addition, there were health stations based upon residential committees and staffed by dedicated paramedics called ‘red medical workers’ who assisted with local preventive treatment and provided simplistic, in-the-field diagnostic and limited curative services (Sidel and Sidel 1982). Local districts were funded by Ministry of Health system hospitals, while the military and work unit hospitals were paid for out of the budgets from their own financial allocations within the wider spending and budgetary organizational structures of the centralized command economy. The late Mao Era did see improvements in terms of accessibility for many poor Chinese, in some dimensions, but even so physical access to the best available health clinics was always easier in the urban centers largely both as a simple function of proximity; compared with the mountainous, poorer regions in Central and Western China, and funding. Inevitably, the larger urban centers received greater Central funding, (World Bank 1983) for greater numbers of hospital beds, and doctors per patient, compared with the more rustic, rural commune clinics. In 1975, the number of hospital beds available to a city-dweller was approximately four-fold higher than what was available for a rural resident; with very similar figures for doctors per patient. (Ministry of Health 2000: 426). Even as the Mao-era heath system declined due to reforms, the changes in the cities were much more gradual than in rural areas; as competitive industries attempted to attract workers with increasing health-benefits, until those benefits become overly burdensome to the bottom-line. (Duckett, 2007) It may be a fait accompli that urban spending across the board for most governments will always be greater than for any rural region; simply due to the fact that critical industries, population concentrations, and seats of political power are located in urban areas. It has proven true in China, as the medical figures above indicate, and is likely to remain so in most societies. Possibilities for reasonable proposals to redress this discrepancy might include increased funding for roads, and public works projects only possible outside of urban areas. DECLINE OF MAO-ERA HEALTH SYSTEMS The end of the commune system in the late 70's in favor of household farming practices. Freed from the collectivist system, the available funds for cooperative health financing dropped by at least 85% during the 1980's. (Carrin et al. 1999); (Feng et al. 1995) China's largest urban centers, though they comprised 19% of the total population, urban health expenditures comprised 34% of the medical budget. (Hossain, 1997) Per capita, medical expenditures in urban areas averaged at three-times any particular rural area. (Liu et al. 1995) With the erosion of the district-based and work-group centered aspects of economic control, there are projections that indicate a crisis with the current system. Estimates place 500 million Chinese in financial straights where effective healthcare is - and will remain, beyond their grasp. (WMRC, 2004) The Chinese government understands and has begun moving in the direction of a resolution. The government’s stated commitment to address these salient issues within the healthcare sector has been verified through candid acknowledgment of the issue. More investments have been allocated towards improvement of the public and rural health infrastructure; with an emphasis on controlling healthcare costs. In addition, there are plans for initiatives to improve the practice of hospital management as a means to raise the quality of patient care; as well as strategies to establish these infrastructures China-wide. (IBM 2006) An example of this intent is the boost in funding during the 2003 outbreak of the Severe Acute Respiratory Virus, otherwise known as SARS. Though any responsible government with the available resources would attempt a temporary health apparatus for the distribution of vaccines and palliative aids, as well as quarantine measures; China has also attempted to improve upon a national health infrastructure cast in a similar mold to the older, socialist model in which every district will possess a local disease control center. These steps, while they do signify a willingness to advance the well-being of the citizenry, by themselves still leave the problem of care for individually-occurring illnesses as needed on demand. (Zhang, 2003) More long-term steps include measures to shore-up the medical talent-pool of Central, and Western China, further from the coastal power and population centers. Medical school graduate will receive special funding for an agreement to work one to two years in more rural areas. (Xinhua Net, 2004) An additional challenge towards equitable care are systemic trends that encourage a form of gender discrimination. Industrial operations that may have a higher priority in terms of centralized State funding tend to hire mostly men. Administrative offices related to government in some cases receive less funding, and these sorts of secretarial jobs tend to hire women. But since office-clerk jobs can be completed with less expenditure than heavy industry before salaries are included, the system has evolved to fund certain of these jobs to a lesser degree; and that translates into less benefits available for workers; which naturally leads to lower health benefits for women more often than men on the whole. (Duckett, 2007) Post-Mao reforms ended most of these programs to allow for a modern system where individual inequalities can become significant regardless of geography. As collectivist heath financing on the local level ended, the village practices of risk-pooling fell by the wayside. In the eleven years from 1980 to 1991, individual patient fees rose by 16% . (Hossain, 1997) And later into the 90's, the so-called 'barefoot doctors had to start charging for many services that were once funded by the village, if they wished to remain in practice at all. (Feng et al. 1995) In the cities, as costs of employee health began to strain the capacities of the work-unit, employers reneged on their agreements with increasing regularity. In some cases, they would allocate a certain sum of money for the purpose of health-benefits, and this would be paid annually to employees, whether they actually had a claim or not. Arrangements for health-care became more complex, but in the end, most workers came to the realization that it would be up to them to meet the costs for their own health needs. (Duckett, 2007) For the average worker, the percentage of people without employer-assisted health-benefits associated with their work-unit increased 17% between 1993, and 1998. (Liu et al. 2002). Although, according to Tang and Parish, those workers in official offices with government connections maintained good access to quality care. (Tang and Parish 2000) CONCLUSIONS The Chinese government is historically committed to a theory of collectivism due to the heritage of communist-socialist roots, and these ideals have not been entirely abandoned, despite the realistic needs for a degree of privatization. The moderate gains made in terms of health-care under the Maoist system, while forced to change with the times, remains a benchmark for current strategies, as well as a goal to exceed. But administrative issues within the government itself can undermining their implementation of the socialist ideals that overall planners are seeking, as the options for health-financing dwindle for many citizens. Consequently, direct patient ‘out-of pocket’ payments for health care had increased to 61 per cent of spending in 2000. (Ministry of Health 2002) Inequalities in health-care become inevitable in this instance; a system where personal wealth is the key determinant of medical access is representative of exactly the sort of class inequity that pure socialism would not tolerate. This situation contributes to the findings by the World Health organization in 2000 which ranked China only 188th out of 191 countries in terms of the equality of access for its health financing system. (World Health Organization 2000). The essential disparity remains the same as what has been discussed in the preceding sections, those between countryside and city, and in within these spheres between geography and individuals. As discussed earlier, these patterns as expressed within the official institutions and disseminated towards private enterprises can continue to exacerbate the gender gap in health-care. But a simple willingness to change, even by leading party officials by itself is not sufficient. The political will must be accompanied by well-reasoned, strategically sound policy initiatives and meaningful government investment towards the enhancement of the health-infrastructure. A restructuring is necessary; because the available funding and operational authority that might allow for improvement in China's health-care are tangled within the jurisdictions of disparate, local systems with a variety of other agendas and priorities. Some of these priorities include social insurance controlled at the local-level that might interfere with a reiteration of the old three-tiered system in terms of organizational structure. In addition, incentive programs for local officials to make their regions profitable will imply official actions that may distract, or detract from a sustained, centralized mediation of health reform from Beijing. REFERENCES Bloom, Gerald, and Xingyuan Gu. 1997. Introduction to Health Sector Reform in China. IDS Bulletin 28 (1):1-11. Duckett, J. (2007) Local governance, health financing, and changing patterns of inequality in access to health care. In: Shue, V. and Wong, C. (eds.) Paying for Progress in China: Public Finance, Human Welfare and Changing Patterns of Inequality. Routledge contemporary China series (21). Routledge, London, UK, pp. 46-68. ISBN 9780415422543 Feng, Xue-Shan, Sheng-lan Tang, Gerald Bloom, Malcolm Segall, and Xingyuan Gu. 1995. 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