China health care reform aims to help rural areas

Li Xiufen, whose family tills rice fields high in the terraced-carved hills of southwest China, had to borrow $730 from other villagers when she needed stomach surgery two years ago — a debt that remains unpaid.

When her husband, Zhang Wenkai, 54, contracted meningitis last year, she begged him to go to the hospital, but he refused.

"We didn't have enough money for the hospital fees," says Li, 56. "So he died at home."

Li's loss highlights how China's market-oriented system in the past few decades has priced health care beyond the budget of many Chinese in rural areas. That is about to change.

The Chinese government announced a $124 billion, three-year overhaul of its health care system that calls for building a clinic in each of the country's 700,000 villages, expanding medical insurance and capping the cost of hundreds of prescription drugs.

The ambitious package, announced last month, will provide "safe, effective, convenient and affordable health services" to all of China's 1.3 billion people by 2020, the government said. And its impact will extend far beyond China's borders as a way to stimulate the economy and better handle a medical crisis, such as an outbreak of SARS, bird flu or the new strain of swine flu sweeping the globe.

The plan reverses years of unstitching the Maoist-era social safety net that used to send "barefoot doctors" across rural areas of China to provide free or nearly free basic care. People who now live in the countryside — the bulk of China's population — stash away savings to cover the cost of a doctor visit or hospital stay in case they get sick. The new health care system could free the Chinese to spend more on goods instead of saving for future medical care.

China's health care changes are aimed at making coverage affordable, not free. More than 200 million Chinese lack any health insurance, the government says, and the new plan could cover 90% of the population with some sort of basic medical insurance by 2011. The insurance coverage will reimburse a significant percentage of patient costs, but not all. In 2010, the government will increase its health insurance subsidy for farmers and unemployed urban residents from $11.73 to $17.59 a person.

Promises, promises

Here in Yunnan province, close to the Vietnamese border, health coverage is threadbare at best. And the priority is growing food, not buying consumer goods.

The area is named Tiger Mouth for the view of mountains across a spectacular valley where over 1,200 years every inch has been carved into rice terraces. Tourists are drawn by the panoramic vistas of the land tilled by the local Hani ethnic group, among China's poorest people. They have little cash left after a hard year's planting.

The challenges facing China's health planners are as spectacular as the scenery. "Shanghai and Beijing are moving ahead very quickly" with the announced changes, says Sarah Barber, a health policy expert at the World Health Organization in Beijing. "But the poorer regions will struggle to come up with the funds" to cover their share. The central government will pay 40% of the promised $124 billion program, while local governments must come up with the rest.

Yunnan province — 1,300 miles southwest of Beijing — ranks among China's least-developed regions. Local authorities will invest $6.6 billion in health reform over the next three years, says health chief Chen Juemin, who is lobbying Beijing to make Yunnan a pilot project.

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