Can China's Health Care System be Mended?

Chinese hospital

by Marty Poehler

China's phenomenal economic growth over the last 30 years is well documented. What most people know little or nothing about is the extreme tension and struggle that's going on in China while its economy is booming.

One cause of this tension is unequal provision of medical care across China. Another is huge differences in the quality of education throughout the country. A third cause of unrest in rural China is the grabbing of farmland from peasants by local government officials. In this article we'll examine the first of these three problems — the underfunding of medical care for China's villagers — and look at the dramatic effect this is producing throughout China.

Over the last two decades Chinese local governments have lowered local taxes, and have received little money from the central government for health services. So local governments today can no longer pay for basic health services.1 Millions who can't afford basic health care are living in misery. This contrasts dramatically with the government-financed medical system that from 1949 to 1980 provided a role model for the world's developing countries. How did this reversal come about?

The "Barefoot Doctor" Program & Commune Health Clinics

We can see how China first marched forward, then retreated in the area of universal health care if we start in the Mao era. Chairman Mao tse Dung was well known for expressing government initiatives in catchy, memorable phrases. In 1965 he ordered, "In health and medical work, put the stress on rural areas." Soon a program known as "the barefoot doctors" took form. Thousands of farmers in their 20's were given intensive training in basic hygiene and in both Chinese and Western medicine.

The barefoot doctors farmed in the commune fields alongside their comrades. So these farmer-doctors were close by their fellow farmers to help them with their medical needs. The barefoot doctors taught basic hygiene. They also provided rudimentary health care, such as first aid, and gave immunizations against diphtheria, whooping cough and measles. They referred more complex illnesses to physicians at commune health centers. In this way the "barefoot doctor" program brought basic healthcare to the masses. 2

This was the era of the collective farming system. A township clinic was located in every commune. Healthcare, though basic, was affordable to even the poorest peasants.3

The "barefoot doctor" program and township clinics brought about a marked improvement in the health of China's population. From 1952 to 1982 infant mortality fell from 200 per 1,000 live births to 34, and life expectancy increased from about 35 years to 68, according to a study published by The New England Journal of Medicine. 4

Socialism to Capitalism: A Reversal of Health Care Policy

However, in the 1980's and 90's, as China's economy started to boom, the "barefoot doctor" program lost its funding and disintegrated. And in the early 1980's, when the rural commune system was abolished, funding ceased for the township clinics. For the first time, doctors and hospitals had to support themselves. At the same time all ceilings were removed on fees they could charge, and fees rose sharply.

Because of these changes, many expectant mothers in rural areas could no longer afford to give birth in hospitals under the care of professional healthcare workers. Not surprisingly, infant mortality increased, rising in some rural areas to six times the national average — to 200 deaths before the age of five per 1,000 births. 5

Widespread Suffering Under the New System

With the switch to the market system in health care, thousands of doctors and well-trained health workers left the countryside for more lucrative careers in the cities. Today, peasants in rural areas routinely encounter unqualified caregivers and outright fakes who sell expensive, wrongly prescribed, or counterfeit medicines. 6 Not surprisingly, these villagers often see their health get worse. If they have communicable diseases they often pass them on to others. If a peasant's illness becomes debilitating, his relatives can face the double catastrophe of losing their breadwinner, and incurring medical bills that can bankrupt the family. 7

The official Chinese news media is filled with accounts of brothers who must draw lots to see which one of their serious diseases will be treated, since the family can't afford to treat both of them. Family members often choose to sell kidneys or other organs on the black market, to raise money for medical care for their son or daughter. 8

To summarize the enormity of the change that has occurred: A rural population that once enjoyed universal if rudimentary health care has changed, in less than a generation, to one where 90 percent of the people lack medical insurance of any kind. 9

Humanity's Largest Migration

While these changes occurred in the health care system, a human migration of seismic proportions was taking place that would change China forever. From the late1970's to today, between 150 and 200 million people have moved from the countryside to find work in factories in the cities. This is the largest migration in human history. 10 At the same time the government poured huge amounts of money into cities for medical care, education, and job creation. The political future of China lies in maintaining stability in the cities. 11

A Better Life in the Cities

The health care scenario is much rosier for the growing population of China's cities than for those living in the countryside. A study found that 55 percent of the urban population had medical insurance in 2003. Of those who had this insurance, two-thirds received it from the government, with the rest paying for their own coverage or having it provided by their employers. 12 In addition to health care insurance being more widespread in the cities, the overall economic situation is better for people in cities than in the countryside. Incomes are higher in cities, and income growth is higher there too, with real urban income growth of 9.6 percent in 2005, compared to 6.2 percent real rural growth that year.13

Two Different China's: Urban and Rural

These factors reinforce the idea that China is two separate nations: one urban and increasingly comfortable, the other rural and increasingly miserable. 14 This is causing deep resentment among the peasantry. People are increasingly taking the law into their own hands — expressing their anger and trying to persuade the government to bring about change. In one instance, 2,000 people ransacked a hospital in southwest Sichuan province and battled police after a toddler died there. Doctors had told the boy's grandfather they needed more money before they could treat him after he accidentally swallowed chemicals. 15 The breakdown of rural healthcare was one contributor to the 74,000 officially recorded incidents of mass unrest in China in 2004. 16

As we have seen, Chinese people in rural areas used to receive the benefits of state subsidized, basic medical coverage. But now these people have watched helplessly as these benefits have vanished. This loss of health care coverage has made life increasingly miserable for them. Will things get better for these people?

The Government's Responses to Calls for Change

The demonstrations in China's countryside are an embarrassment to the government. They have prompted intense discussion within the government about how it should respond. In February 2007, Prime Minister Wen made a speech on the need for social justice, making it clear to his party he did not want to see the poor trampled upon.17

In actual practice the government has taken a carrot-and-stick approach toward complaints that urge reform in medical care and other areas. It often allows or encourages public debate concerning specific social reforms. At times it even promises to bring about reforms, but routinely fails to follow through with action. At other times it suppresses — often brutally — those who call for change.

The Difficulty of Social Reform

One reason reforms promoted by the central government don't occur is because of how China's government is structured. China has one of the most decentralized governments in the world as far as paying for local services is concerned. 18 When China's central government mandates a policy, it relies on the local governments to both raise the money for the policy and carry it out. As the popular saying goes, "The central government invites the guests, the local government pays the bill." Often the local government can't afford to implement programs, or simply doesn't want to, so programs called for by the central government may just fade away.

Looking at the central government's recent health care plan, it's easy to see just how difficult it is to bring about change in this huge country. By 2010, Beijing has called for a trial program of state-subsidized medical insurance to cover all 800 million rural residents. People will have to pay $1.30 a year for this coverage. 19 However, many people are so poor they now don't go to the clinic since they can't afford the fee of 2 to 5 yuan (25 to 60 cents). 20 It seems that these same people will not be able to afford this new fee, thus excluding them from coverage. Bureaucratic inertia, this time at central government level, could also kill this program _ since there are more than 10 State Council departments involved in the program. 21

Some Benefits May Only be Enjoyed in the Next Generation

As we look at the medical insurance landscape across China, we see a paradox. The central government has focused tax money on developing China's cities. This has fueled China's economic boom. But this boom has come at the expense of not applying that tax money towards social programs for those in the countryside. While the nation has grown economically overall, in large measure the rural poor have missed out on most of the benefits enjoyed by those in cities. It seems that many rural Chinese will not be able to enjoy these benefits in their lifetimes. However, many of these people will at least live to see their children receive them, as their children migrate to the cities.

There's another strange twist: China has for decades been known as a socialist country. However, taken as a whole, China's medical care system is more capitalistic than the health care systems found in America and in the countries of western Europe — countries heralded as bastions of capitalism. This unusual situation came about as China rushed to embrace the good goal of economic progress. But while making huge strides forward toward that goal, as a nation it has become callused, and missed a different but equally worthy goal: offering help and expressing compassion to those who can't pay for medical care. The coming decade will show whether China's economic progress — shaped by its leaders' decisions — will bring economic and social benefits to a small percentage, or to all of the Chinese people.


1. Fat of the Land, The Economist, March 23, 2006

2. Health for the Masses: China's "Barefoot Doctors", Vikki Valentine,, November 4, 2005 as seen at

3. Wealth Grows, but Health Care Withers in China, Howard W. French, New York Times, January 14, 2006

4. Ibid.

5. As China Trims Health Care, the Rural Poor Suffer, Elisabeth Rosenthal, New York Times, March 14, 2001

6. Wealth Grows, but Health Care Withers in China, New York Times

7. Ibid.

8. Ibid.

9. Chinese Tycoon Offers Health Care Help, Calum MacLeod, USA Today, November 21, 2006. The United Nations is quoted in this article giving this 90% figure.

10. China Road-A Journey into the Future of a Rising Power; Rob Gifford; Random House, New York City, 2007. P. xvii

11. Op. cit., The Economist

12. Urban health insurance reform and coverage in China using data from National Health Services

Surveys in 1998 and 2003,Ling Xu, Yan Wang, Charles D. Collins, and Shenglan Tang, BMC

Health Services Research, 2007-Found at

Also see Table 3 in that article for a breakdown for people in cities-showing three sources of medical insurance for city dwellers.

13. Op. cit., The Economist

14. Wealth Grows, but Health Care Withers in China, New York Times

15. According to the Hong Kong-based Information Center for Human Rights and Democracy- Op. cit., USA Today

16. When Chinese Sue the State, Cases are Often Smothered, Joseph Kahn, New York Times, December 28, 2005

17. Caught Between Right and Left, Town and Country; The Economist, March 10, 2007, P. 23

18. Fat of the Land, The Economist

19. Op. cit., USA Today

20. Wealth Grows, but Health Care Withers in China, New York Times

21. Op. cit., USA Today The information here is taken from the state-run China Daily.

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