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China: China Health Profile 2012






China Health Profile 2012

Ministry of Health's mission, vision and objectives

China's political commitment to health system reform was declared at the highest level when President Hu Jintao stated in October 2006 that all Chinese people should have access to affordable essential health services. The Health Care Reform Leading Group was established the same year, composed of 16 ministries and chaired by Vice Premier Li Keqiang of the State Council, with the Ministers of Health and the National Development and Reform Commission (NDRC) as Vice-Chairpersons.

After three years of deliberation, in 2009, the Group announced their national health reform blueprint. The plan's main objective is to provide universal coverage of basic health care by the end of 2020. Reforms are proposed in five areas: the public health system, the medical care delivery system, the health security system, the pharmaceutical system, and pilot hospital reform. The initial three-year implementation plan for 2009-2011 emphasizes several programmes, including improving the social health security system (urban employees, urban residents, rural CMS, and medical assistance programmes); establishing an essential medicines system; strengthening primary-level health care facilities; reducing disparities in public health care between regions; and piloting reforms in public hospital financing by reducing the reliance on drug sales for operational costs and salaries. The Government has committed to spending 850 billion Yuan (US$ 124 billion) on fulfilling the three-year plan (est 0.8% annual increase in [2008] GDP), 39% from Central Government. The Central Government allocation to implementing health reform in 2009 amounted to 118 billion Yuan, including 30.4 billion Yuan (US$ 4.4 billion) dedicated to insurance, 24.6 billion Yuan (US$ 3.6 billion) for public health and disease control, and 6.5 billion Yuan (US$ 2.4 billion) for construction.

Specific targets for 2009 included: (1) 29 000 township health centres built; (2) revised essential medicines list published; and (3) a 15 Yuan government subsidy for public health. Targets for 2011 include: (1) 90% health insurance coverage for both urban and rural areas; (2) a 120 Yuan government subsidy to urban residents’ basic medical insurance and the new rural coooperative health insurance; and (3) 2000 new county hospitals, 3700 urban community health centres and 11 000 community health stations built or renovated. After one year of implementation, the Government has announced a series of achievements, including 94% of the rural population (833 million people) covered by health insurance, 36% of counties adopting the essential medicines list, 32 million people receiving hepatitis B vaccine, 1.49 million women screened for breast cancer, 6.27 million women subsidized for hospital delivery, and clinical pathways for 112 diseases formulated.

Organization of health services and delivery systems
Since 2003, dramatic increases in insurance coverage have been accompanied by increased service utilization, particularly in rural areas. Between 2003 and 2008, national insurance coverage increased from 23.1% to 87.4% [1], while hospital admission rates nearly doubled to 6.8% [1] National Health Services Survey 2003 and 2008. Center for Health Statistics and Information, Ministry of Health.

Changes in health financing have led to other changes in utilization patterns. Increasing rates of Caesarean section, particularly in urban areas, and frequent use of injections and infusions in primary care settings illustrate the unnecessary use of certain treatment measures. Cesarean section rates have increased from 16.3% to 26.8%, and urban rates were 50.9% in 2008. An assessment of 121 471 prescriptions for patients with the diagnosis of a noncommunicable condition in 218 primary care facilities was conducted as part of the National Health Services Survey (NHSS) 2008.[1] In village clinics and township health centres, 66% and 61% of patients were prescribed antibiotics, respectively. Intramuscular and intravenous injection rates were also very high: 30% and 35%, respectively, of rural prescriptions and 13% and 32%, respectively, of urban prescriptions. These high figures correspond to other smaller-scale studies conducted in China. Such treatment patterns are striking given the prevalance of noncommunicable disease treatment

[1] Center for Health Statistics and Information, Ministry of Health.

While health insurance coverage is increasing, especially in rural areas, many people are underinsured and continue to face high out-of-pocket costs. Households continue to face financial barriers in accessing health care, and household health expenditures remain high: 17.4% of patients failed to be hospitalized after referral for financial reasons in 2008, a decline from 21.8% in 2003. An increase was seen in the percentage of households with catastrophic expenses (5.0% to 5.6%), although fewer households became impoverished because of medical care (6.1% to 4.8%), between 2003 and 2008. Inpatient medical services frequently require pre-payment. For the rural health insurance schemes, reimbursement rates have increased to about 40% of total charges. Benefits are also not portable across localities, which is a major concern for migrant workers.

While major progress has been observed in expansion of rural insurance schemes and in some indicators of service use and expenditures, gaps remain between the poorest and better-off and, for some indicators, between eastern, central and western China. National Health Services Survey data show the need for policies to promote equitable access and risk protection, particularly for the urban and rural poor. The current health reform investments should be monitored closely to determine their impact on trends in service utilization, health-seeking behavior, the quality of care, risk protection and, ultimately, health.

Since medicine expenditure remains an important component of out-of-pocket expenditure, increasing the availability and affordability of generic essential medicines is an important policy. The Government is in the process of outlining reforms to improve access to quality, safe essential medicines, modify the pricing system and strengthen medicine production and distribution systems.

Health policy, planning and regulatory framework
A major component of the health reforms aims to better define government roles in the health sector. Important efforts have been made to reduce ambiguity and redundancy in responsibilities, as well as the competing interests among departments and in government roles in health across agencies.

Regulations relating to public health and health care delivery systems are underdeveloped and poorly enforced, and monitoring capacity is weak. Most health facilities lack clinical governance systems, and important gaps exist in the regulatory system to ensure the quality of care. Deficiencies in clinical quality have resulted from financial incentives in the delivery system, combined with difficulties in: posting qualified human resources to peripheral facilities, gaining suffiient government resource allocation, and the supervision and regulatory systems for the delivery systems. Safety standards and health regulations, as well as their enforcement, could be strengthened, particularly in rural areas.

The overwhelming majority of the Chinese population seek out traditional Chinese medicine (TCM) to address their health problems. The Government promotes the development of a modern TCM industry, as well as the integration of TCM into the national health care system and integrated training of health care practitioners. In 2008, the Minister of Health identified several key priorities for TCM development, including increasing policy support for TCM; strengthening research on key TCM issues and building capacity for TCM research; training prominent TCM doctors and establishing well-known TCM hospitals and departments; improving and adapting TCM services to meet public need; increasing access to and the quality of TCM services in rural and urban communities; and strengthening international cooperation and communication on TCM.[1]

[1] Report by Minister Chen Zhu at the Annual Health Conference, 2008.

However, a number of challenges to further development of TCM remain. There is a lack of unified, systematic regulations for assessing the safety and efficacy and ensuring the quality of TCM products. In addition, there are no national TCM standards or guidelines for TCM clinical trials, and evidenced-based TCM product testing and research are still needed. In view of the vast differences in the qualifications of TCM practitioners, the quality of TCM education needs to be strengthened, and the management and supervision of TCM institutions need to be regulated.

Health care financing
Total health expenditures rose from 3% of GDP in 1978 to 4.8% of GDP, or US$ 157.6 per person in 2008.[1] Of that total, the Government contributed 49.9% and private expenditure amounted to 50.0%. Contributions from both the Government and social health expenditure have declined as a proportion of total health expenditure. The decline in the Government's contribution and the increase in individual out-of-pocket payments is due in part to rapidly escalating health care costs and the lack of incentives for cost or quality control in the health delivery system.

Public resource allocation is highly decentralized.[1],[2] Under the current health system, local health departments and other health care providers are expected to generate a significant share of their own operating budgets.[3] Township, county, prefecture and provincial governments administer about 90% of all government spending on health. While localities are given the responsibility to finance health care, however, local governments are unable to raise revenue through taxes to finance basic public services, especially in resource-poor communities. This provides an incentive to focus on more profitable curative care and medicines to generate larger profit margins.[4] Government spending on health tends to be lower in provinces with higher numbers of rural poor. Thus, poor localities have access to fewer and lower quality services for public health. The health reform plan aims to resolve the problem by increasing public spending on basic health services, as well as reducing the reliance on medicines and service sales to fund facility operational costs. The Government has committed to spending 15 Yuan per person on a basic public health package, to be increased to 20 Yuan per person over time. Central government allocation of resources for the public health package varies according to local economic development capacity.

[1] In China, subnational governments are responsible for 70% of government expenditures. In contrast, in most industrialized countries, subnational governments are responsible for less than 30% of the government budget.
[2] National development and sub-national finance:review of provincial expenditures. Washington DC, World Bank, 2002.
[3] Liu XZ, Xu LZ. Evaluation of the reform of public health financing in China. Chinese health resource, 1998,1(4):151-154.
[4] Liu XZ, Liu YL, Chen NS. Chinese experience of hospital price regulation. Health policy and planning, 2003,15:157-63.

Human resources for health
Key challenges in improving human resources for health include: improving the human resource strategy for health development; increasing capacity and technical qualifications; distributing staff more evenly nationwide; and creating a more rational balance among the different health care professions.

Over the last several decades, the Government has prioritized increasing the quality and technical capacity of health personnel with two to six years of professional training. However, capacity issues remain: in 2005, 72.9% of health professionals had only technical secondary school diplomas and only 17.1% of health professionals had bachelor degrees or above.[1]

[1] Zhang JH, Situation and development of the health workforce in China. Beijing, Health Human Resources Development Center (HHRDC) Ministry of Health, China, 2007.

In addition, qualified staff are not well distributed across the country.[1] As in many other countries, poor and rural areas have not been able to attract and retain qualified medical staff. After economic reforms were initiated, many experienced health professionals moved to hospitals in cities and areas with well-paying clinics. This poses an enormous barrier to the delivery of quality basic health services in remote and rural regions.

[1] Wu XL, Rao KQ. 2001. An analysis of health resource development in China since 1980. China health economics, 2001,11:38-41.

The Government has made many international commitments to a wide range of health targets, best exemplified by its acceptance of the Millennium Development Goals (MDGs). Supporting China's achievement of the MDGs provides an important organizational framework for donor coordination in the country, and the majority of donors have reflected this in their country assistance plans. China is ahead of schedule in achieving most of the MDGs, benefiting from the positive effects of both rapid economic growth and targeted government programmes. It may be an appropriate time to develop indicators that reflect the current health challenges, including for the control of noncommunicable diseases, and stronger health policies and systems that could address inequalities in health outcomes.

The United Nations Theme Group on Health (UNTGH) is a Government-donor forum for cooperation on health issues in China. WHO chairs and acts as Secretariat for the UNTGH, which comprises United Nations agencies, bilateral and multilateral donors, government agencies and nongovernmental organizations.

The country has been taking a leading role in improving public health in the Region and the world, and has organized several important regional and global health events, promoting both multilateral and bilateral partnerships. In 2005, China initiated a United Nations resolution on public health, recommending that public health be further integrated into national economic and social development schemes as a basis for promoting sustainable growth with equity around the world.

China also made an important commitment to better health by signing the Framework Convention on Tobacco Control in November 2003. Ratified by China’s National People’s Congress in August 2005, the convention became effective in January 2006. China’s Ministry of Health has taken further steps to improve public awareness of the health risks related to smoking and inhaling second-hand smoke, and to reduce smoking in public areas.

Challenges to health systems strengthening
It is widely recognized that increasing the level of government spending needs to be done in conjunction with reform and regulatory programmes that provide incentives for quality, performance and health outcomes. WHO provides assistance to the Government in implementing its health sector reforms and national strategies that aim to achieve universal coverage of essential health care services by 2020 and to improve quality, equity and efficiency.

Since 2006, the Government has made an enormous effort to define its role in health more clearly. As many countries around the world attest, launching comprehensive health system reforms is very difficult on political and ethical, as well as technical grounds, and such reforms are further complicated by complex governance structures. In China, as in other countries, the single biggest challenge is securing the political will to balance the influence of interest groups and promote the well-being of the entire population, regardless of political influence, socioeconomic status or cultural background. The involvement of many stakeholders in the ongoing implementation of health reform gives every hope that China will succeed and set yet another example of successful reform that can inspire other countries.


Rapid economic growth has not been reflected in increased government investment in health. Health insurance coverage at the end of 2005 was approximately 40% - including the urban basic health insurance scheme, new rural cooperative medical scheme and other health insurancesa; out-ofpocket payments constitute the majority of growing health expenditures (54%). China has a complex health financing system decentralized to the lowest administrative level; there is widespread reliance on service fees and long-standing underinvestment in public health services resulting in huge inequalities between eastern and western China, rich and poor and urban and rural populations. China faces major challenges to achieving the United Nations (UN) Millennium Development Goals (MDGs) on HIV/AIDS, gender and environmental sustainability. Targets on improving child and maternal health may be met if access to health can be improved.
More than 12 ministries or agencies administer health in China including the Ministry of Health (MoH), Ministry of Labour and Social Security and the National Development and Reform Commission.
Communicable diseases and malnutrition have major impact on health, especially in less developed areas, and particularly among young children. Lower respiratory infections, hepatitis B and tuberculosis cause significant mortality and morbidity; approximately 10% of the population are chronic carriers of hepatitis B, causing an estimated 70% of all cases of liver cancer in China. The emergence of severe acute respiratory syndrome (SARS) in southern China in 2003 demonstrated the importance of general strengthening of public health, including surveillance, hospital infection control and health information systems.
Infant and under-five mortality rates remain high where access to services is low, particularly due to communicable diseases and perinatal conditions. Despite overall improvements in child mortality, inequalities persist with higher rates in western China and in rural areas. Noncommunicable diseases and injuries account for over 80% of deaths.b Leading causes of death in China include cerebrovascular disease (including stroke), heart disease and cancer (accounting for approximately more than 50% of all deaths). Road-traffic injuries, depression and suicide are also leading causes of mortality and morbidity, especially in the young and economically active age groups. Smoking is widespread; China is the world's largest producer and consumer of cigarettes with over 1800 billion cigarettes sold each year.c There are 320 million smokers in China (30% of the total number of smokers globally) and the country accounts for approximately 30% of the global production of tobacco products