'World News' Gets Answers on China: Health Care

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China has stunned the world with its rapid economic growth in recent years, showcased through the glittering skyline of Shanghai and the global events like the 2008 Olympics. But while the country has amassed tremendous wealth, China still trails the developed world in its ability to provide even basic health care for its people.

With its massive 1.3 billion population, China's health care expenditures are miniscule compared to Western nations.

China spent less than 5 percent of its GDP on health care in 2005, compared to roughly 16 percent spent in the United States and 10 percent in Canada, according to the World Health Organization.

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"The amount of government spending on health care is really low. It's less than $10 per person, per year," said Drew Thompson, director of China studies and Starr senior fellow at the Nixon Center.

Per person expenditures in the U.S. have topped $6,000 in recent years.

Despite China's Communist government, health care remains largely the responsibility of individuals. Out-of-pocket expenses are extremely high in comparison to average earnings. A single hospital visit nearly matches China's annual income per capita.

Health Insurance Not Mandated

Health insurance is not mandated, though the government does have health insurance programs that provide coverage to some 90 percent of the population. The programs include an employer-based system, a program for urban residents, and another program covering the rural population. For the most part, the programs do not cover the basic care.

"At the moment, most programs in the provinces across China provide primarily in-patient care service," said Dr. Gordon Liu, professor of economics at Peking University. "Basically, the goal is to protect you from having catastrophic problems."

As a result, much of the Chinese population doesn't even receive basic medical care.

"They're still paying largely out of pocket, which causes them to delay going to the doctor," Thompson said. "People don't go to the hospital until they're really sick. There's no preventative services."

But even with the financial disincentive, there still is a shortage of care.

"Usually, Chinese people would have to wait many days to get registered, or you have to know someone ... to get registered before you are diagnosed and treated," said Liu. "We have a supply shortage ... meaning beds, the doctors, good hospital facilities are not enough to meet the demand by people."

Health Care in China: Doctors Rarely Have PhD

For those who do seek care, treatment rarely approaches anything close to a western standard of care.

Though quality medicine is available for China's wealthiest people, most residents receive treatment from physicians who have received little medical training. Just one percent of Chinese doctors have actually received a PhD, while many have only basic training, similar to pre-med classes in the U.S.

"The quality of education, experience and technology, by and large, is not up to world standards," Thompson said.

Part of the reason for the shortage of well-trained doctors is that there's little financial incentive for China's best and brightest to go into the field. While much of China's economy has become market-based in recent years, medicine has not made the same transition and doctors' salaries are tightly controlled by the state.

"Doctors in China are way underpaid for medical services they provide," Liu said.

Doctors Make Money Off Prescriptions

In fact, medical school graduates often end up working for drug companies instead of becoming physicians, and even medical doctors boost their pay through pharmaceuticals. Drugs are sold through doctors in hospitals instead of pharmacies, so physicians have a financial incentive to overprescribe drugs.

"Out of every $100 [spent on medicine] in the U.S., people spend about $10 to $12 on drugs," Liu said. "In China, for every $100, we would usually spend $40 to $45."

The Chinese government is working to reform the health care system with a goal of providing basic care to all its people by the year 2020, but the ambitious goals also come with new health challenges.

As the country's population has urbanized and grown wealthier, health problems like obesity, diabetes and heart disease are occurring more frequently. The population also is aging, with a U.N. estimate suggesting that almost a quarter of the population will be 65 or older by 2050, far larger than the global average.

Just as in the U.S., health care reform is an urgent problem for China, but with a far different set of complications.

"I don't think there's a whole lot of lessons that we can learn from one another," said Thompson.

ABC's Sarah Amos contributed to this report.

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