An Essential Guide to Chinese Healthcare System

An Essential Guide to Chinese Healthcare System
By Leon Long
China Expert

As the most populous country in the world, China aims to establish a basic health system to provide effective, low-cost health services to its more than 1.4 billion citizens. Over the past 70 years, life expectancy has risen significantly and childhood mortality rates have plummeted by more than half. The country also has more hospital beds than it did a decade ago.

In terms of medical insurance, about 95% of the population (or 1.33 billion) were covered by public medical insurance; most of them farmers who live in the countryside and never paid premiums before.

Like many developing countries, China has an aging population, as well as a shortage of well-trained physicians. These are two major challenges the healthcare system is facing. Despite great progress in health system reform, inequity in medical resources and medical care services remains a serious concern of many people in China. Hospitals in rural areas and small cities have basic facilities. Top hospitals that provide advanced medical care are often found in larger cities like Beijing, Shanghai, and Guangzhou.

China’s Achievements in Healthcare Over the Past 70 years

The healthcare of the Chinese population has improved considerably since 1949. The average life expectancy has increased by about three decades and now ranks nearly at the level of that in advanced industrial societies. The average life expectancy was 35 before 1949 and increased to 77 in 2018. The mortality rate for births has dropped to 18 per 100,000 in 2018. Many communicable diseases, such as plague, smallpox, cholera, and typhus, have either been wiped out or brought under control. In addition, malaria and schistosomiasis have declined dramatically since 1949.

Over 95% of Chinese, most of whom have never had insurance before were covered by public medical insurance.

China has established a national immunization monitoring system across the country. The vaccination rate has been maintained at over 90 percent in recent years. The Chinese government provides every child with 14 free vaccines against 15 diseases.

The total number of hospitals in China has increased significantly over the last seven decades from around 2,600 in 1949 to about 33,000 in 2018.

The Challenges China’s Healthcare System is Facing

There are two major challenges China’s healthcare system faces: an aging population and a shortage of well-trained health professionals.

China does not have enough doctors, with 1.8 physicians for every 1,000 people. That is lower than 2.4 in the US, 2.8 in the UK, 2.4 in Japan, and 2.3 in Singapore, according to the World Bank.

The most important is: China lacks general practitioners (GP), which are the foundation for establishing a primary care system. China has only 209,000 licensed general practitioners in 2016, which account for just 6.6% of all doctors, or 1.51 GPs per 10,000 people. The Chinese Government has set the goal of 300,000 GPs by 2020—or two to three GPs per 10 000 population by 2020—and a net GP workforce of 700, 000, or five GPs per 10, 000 population by 2030.

Demographic change is a defining issue in China. As the population ages, the healthcare systems will face significant challenges to meet the needs of an aging population. The elderly and long term care is rapidly becoming one of the most daunting healthcare challenges of our day.

Aging populations pose serious challenges for health and long-term care systems in many countries around the world. The challenges are particularly acute in China, where demographic shifts are rapid, exacerbated by the one-child family policy. The country is undergoing profound socio-economic changes, and Chinese families—the traditional bedrock of old-age security—are increasingly strained as the number of older people explodes while the number of potential caregivers shrinks. No organized long-term care or home healthcare systems exist despite the increasing number of people who will need these kinds of services. According to figures from the United Nations, almost one-third of China’s population, or 438 million, will be over 60 by 2050, more than double the current number of 178 million.

Organizations of the Health System in China

Role of the Government

In China, the central government has overall responsibility for national health legislation, policy, and administration. It is guided by the principle that every citizen is entitled to receive basic healthcare services. Local governments — provinces, prefectures, cities, counties, and towns — are responsible for organizing and providing these services.

Both national and local health agencies and authorities have comprehensive responsibilities for health quality and safety, cost control, provide fee schedules, health information technology, clinical guidelines, and health equity.

In March 2018, the State Council reorganized the central government’s healthcare structure. The responsibilities of various agencies include the following:

The National People’s Congress is responsible for health legislation. However, major health policies and reforms may be initiated by the State Council and the Central Committee of the Communist Party, and these are also regarded as law.

The National Health Commission is the main national health agency. It functions as a ministerial ranked department under the State Council. NHC is primarily responsible for formulating national health strategies, policies, and laws, promoting the reform of China’s medical and health system, supervising the medical sector and public health conditions, and guiding family planning and aging population policy. The State Administration of Traditional Chinese Medicine is affiliated with the agency.

The State Medical Insurance Administration oversees the basic medical insurance programs, catastrophic medical insurance, a maternity insurance program, the pricing of pharmaceutical products and health services, and a medical financial assistance program.

The National Development and Reform Commission oversees health infrastructure plans and competition among health care providers.

The Ministry of Finance provides funding for government health subsidies, health insurance contributions, and health system infrastructure.

The State Market Regulatory Administration includes the China Drug Administration, which is responsible for drug approvals and licenses.

The China Center for Disease Control and Prevention, although not a government agency, is administrated by the National Health Commission.

The Chinese Academy of Medical Science, under the National Health Commission, is the only state-level academic center for medical sciences in China and the multi-discipline medical research institution.

Local governments (of prefectures, counties, and towns) may have their commissions, bureaus, or health departments. Centers for disease control and prevention also exist in local areas and are likewise administered by local commissions, bureaus, or health departments. At the national level, the China Center for Disease Control and Prevention provides only technical support to the local centers.

Role of Public Health Insurance

There two types of public health insurance, one is called Urban Employee Basic Medical Insurance is financed mainly from employee and employer payroll taxes, with minimal government funding.

The second one is called Urban-Rural Resident Basic Medical Insurance covers rural residents and urban, self-employed individuals, children, students, elderly adults, and others.

In 2019, China spent approximately 6.6 percent of GDP on healthcare, which amounts to CNY6,519 billion (USD 944 billion). 26.7 percent was financed by the central and local governments, 45 percent was financed by publicly funded health insurance, private health insurance, or social health donations, and 28.3 percent was paid out-of-pocket.

Role of Private Health Insurance

Purchased primarily by higher-income individuals and by employers for their workers, private insurance can be used to cover deductibles, co-payments, and other cost-sharing, as well as to provide coverage for expensive services not paid for by public insurance.

Traditional Chinese Medicine (TCM) in the Chinese Healthcare System

Traditional Chinese Medicine (TCM) has guided health maintenance and disease treatment for thousands of years in China and has been widely used in many countries around the world. TCM regards each individual as unique, so all corresponding therapeutic and preventive approaches in TCM are personalized. TCM practitioners look to treat the root cause of disease and take a holistic approach to help people experience complete healing without the use of conventional drugs.

TCM is well integrated with the Chinese healthcare system as one of the two mainstream medical practices. We have TCM hospitals and TCM departments in most hospitals. Also, the Chinese government is supportive of TCM development by increasing investment in TCM research and administration. TCM played an active role in the prevention and control of COVID-19 in China. It improved the clinical symptoms of patients, reduced the mortality rate, improved the recovery rate, and effectively relieved the operating pressure on the national medical system.

What is the Healthy China 2030 Plan?

Healthy China 2030 Plan, which was launched in October 2016 by the Chinese government, is an important national medium and long-term strategic plan for the health sector. The plan aims to promote healthy lifestyles, improve health services and the health industry, and build a sustainable health system to provide essential health services to every citizen by 2020 and reach the main health indicators of high-income countries by 2030.

The plan provides an indication of some of the issues the Chinese government will be focusing on over the next decade. One of the wide-reaching initiatives is educating the masses to improve their awareness of healthy living, with health literacy targeted to increase from 22% in 2022 to 30% in 2030. This aims to amend relatively poor health knowledge and unhealthy lifestyles, which include smoking, alcohol abuse, lack of exercise, and an unbalanced diet.

Another major focus of the health plan is physical activity. The goal is for 40% of people to exercise regularly by 2030, up from 37% in 2020 – 40 million extra people. That’s suggested to be 6,000-10,000 steps a day, 150 minutes of moderately intense exercise, and 75 minutes of high intensity a week. 60% of students should score “good” physical health, up from 50% in 2022. The plan also aims to have the exercising adult populace supported by 7-8 hours of sleep. Ultimately, as a result, men should have a sub-85cm waistline, and women sub-80cm.

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