The state of universal health cares coverage in China. “The state of universal health care coverage in China.” Yanyang Jiang 1 The state of universal health cares coverage in China. 1. Introduction. The World Health Organization refers to health as a state of complete physical, social and psychological or mental wellbeing of an individual but not merely the absence of disease or infirmity (Callahan, 1973). Therefore the notion that when someone is free from the disease, he/she is healthy is surpassed with time. Health is a fundamental right of each and every individual living in any given country. Therefore, each and every human being staying on this planet has a right to the highest possible level of health. This right is the most important worldwide social goal whose realization requires the action of many other social and economic sectors other than the health sector. Each and every government should be committed towards the achievement of universal health care to its citizens. It has long been well known that a healthy nation is a wealthy nation. It is because a healthy population can effectively take part in different economic activities that lead to the growth of a given country. Universal health care is the provision of healthcare services that are of high quality, are accessible by all both poor and rich and that does not cause financial ruin to the people being served (Hall and Taylor, 2003). Therefore, to provide an efficient universal health care system, there need to be a balance between the cost of the service, quality of the service and accessibility of the service. The services should be readily accessible and of high quality but low cost. Therefore according to WHO, Universal health coverage refers to the process of ensuring that all people get access to required promotive, curative, preventive, and rehabilitative health services, of high quality to be effective. It also ensures that people do not suffer financial hardship when paying for these services. It can be achieved using various methods such as making the health insurance services available to everyone, subsidizing the cost of health care and restructuring the health delivery systems through formulating and implementation of legislations that will ensure 2 The state of universal health cares coverage in China. that every citizen is entitled to quality healthcare services including emergency services without discrimination. Before the introduction of the universal health coverage by the World Health Organization, health care services used to be very expensive such that only those who were rich could afford better health care services. The situation was further made worse by the deplorable state of the public health institutions as they lacked adequate government funding with no enough doctors to attend to the poor patients who were flocking the government hospitals. Quality services were only available in the private hospitals that used to be very expensive and only accessible to the wealthy. Therefore, the WHO came up with the concept of universal health coverage to bridge this gap especially the developing countries of which China is one of them, and various governments were obliged to implement it. Michael Grossman (1972) in his health production model argued that health is both consumption and investment tool. It is a consumption device because of the level of utility or satisfaction increases with the individual's health. It is an investment because it exhibits two characteristics i.e. it has a high aspect and it depreciates over time, and it provides a return over time since fewer days are lost due to illness and in turn results in more productivity and higher incomes. The higher income generating capacity due to more available time is the return to investing in health. Therefore, a sound investment in the health sector in any given country implies real economy. In this paper, I would discuss the various steps the Chinese government has made towards achieving universal health coverage to its citizens paying much emphasis on the 3 The state of universal health cares coverage in China. opportunities available for the universal health coverage and various challenges the Chinese government is facing towards implementation of the program. 2. Background and literature review. In the year 2009 April, China's government with the aim of providing a safe, convenient, affordable, primary and efficient healthcare to its citizens living in both urban and rural areas, launched a blueprint that would help improve the healthcare system in China in an official policy document titled "Guidelines for Deepening Health Systems Reform." The health care system of China used to provide basic health care to almost all its citizens through the public health network and urban and rural health insurance schemes between the years 1950-1980. Around the late 1970s, various economic reforms required the readjustment on the way the health care system was run. At this time there was a global economic downfall and various governments were forced to abandon the provision of free health care services. It, therefore, required the market forces to dictate the price of health care. The cost of health care, therefore, kept on rising despite the government promising to implement the World Health Organization's primary health care strategies that were meant to achieve "Health for All by the year 2000". These changes made health services inaccessible and affordable to the disadvantaged populations such as the poor and those living in rural areas (Tang et al., 2008). The various adjustments that took place in the health system lead to the collapse of the rural health insurance schemes in the late 1980's. The urban health insurance schemes were also not left behind as they also began collapsing due to the fast rise in the cost of medical care and the inefficiency of the services offered by the government-owned hospitals (Liu, 2002). It is at this time that it was identified that lack of universal health coverage insurance schemes and lack 4 The state of universal health cares coverage in China. of government's proper funding of the public health programs were the main obstacles to the universal health coverage. The rise in public dissatisfaction with the performance of the health sector together with the increase in emerging public health problems became the precipitating factors for the need of reforms in health care. Due to the economic hardship and the increase in disease burden that was affecting the citizens of China, the China's government came up with a universal coverage policy that was as a result of extensive discussions and debates concerning the major challenges that were faced by the local health system and the rapid change in the international trends in health care delivery models. There was a need to ensure that there was equity in health and health care to be paramount to every China's citizen, therefore, facilitating the creation of a harmonious society. The principles of formulating the policies have been guided by the need to improve the people's access to basic health care and payment of more attention to the vulnerable populations such as the poor, those living in rural areas, the unemployed and people living with the disability. This policy formation was also supported by various international organizations such as World Bank Health VIII Project and Department of International Development Urban Health and Poverty Project. For this system to be efficient, there was a need for strong political and financial support that the government massively received. It is evidenced by the government increasing the health funding by US$ 126 billion to fund the reforms that were to take place between the years 2009 to 2011. It was backed up by the formulation of strategies and measures popularly known as the "four beams and the eight pillars." (Si Liang Ba Zhu). The four beams consisted of medical care, health insurance, provision of essential drugs and public health care. 5 The state of universal health cares coverage in China. These four beams were to be supported by eight pillars that included: concrete strategies and policies, covering areas such as financing, information, regulation and human resources. Therefore both the demand and supply-side aspects of funding were to be funded by public financing through the payment of taxes. The cost of public health programs and primary care providers was to be subsidized, and this is what was given priority. The government also supported the insurance schemes which included the new rural cooperative medical scheme (NCMS) and the urban resident based basic health insurance scheme (URBMI). It was to be strengthened by improving management and increasing the government support. These insurance plans were put in place to be of benefit to all people especially the vulnerable. To facilitate even distribution of health care professionals, active policies were to be implemented to facilitate training and encouraging the health professionals to work in rural areas. 3. Research questions. Through this research, I would like to answer the following questions about universal health care coverage in China. • What is the various health delivery systems found in China? • What is the role of the government of China in the health sector? • What major steps have China taken toward achieving universal health coverage? • How is the financing of health care industry in China? • Who are the major players in the healthcare industry in China? 4. Universal health coverage situational analysis. In order to get a vast understanding of the universal health coverage in China's health care system, there are several factors which need to be looked into including the breath, the 6 The state of universal health cares coverage in China. width and the height of the coverage where the breath of the coverage means the total population being served, the breadth of the coverage indicates the quality and amount of services being offered and the height of the coverage indicates how much financial input is placed to ensure universal coverage. In this section, I would, therefore, analyze and describe the universal coverage in China using the parameters mentioned above. 4.1.Health insurance schemes coverage. At around mid- 1950s there was an introduction of various medical insurance schemes in both the rural and urban areas. The health insurance coverage in the cities and towns majorly covered the government employed individuals and those working in their private enterprises. It implies that majority of the people who were unemployed were no covered by this scheme. It is the government's realization of this discrepancy that the rural insurance health protection systems were introduced which were cheaper, therefore, raising the total insurance cover to 90% by the year 1970. As usual with the introduction of a new concept of insurance cover for everyone, these insurance schemes faced a lot of challenges since there was disorganization in the country's economy, especially in the rural areas. These insurance plans underwent a lot of transformation with the government coming in to subsidize the cost of insurance cover, increasing the premium levels of the employee based insurance covers, and establishing an insurance scheme that would cater for the unemployed people such as children and the old. It further caused the coverage to increase, and for the first time, the people of China started enjoying a more quality readily available health care. In the year 2003, there was the introduction of social health insurance schemes and medically-assisted programs that were fully supported by China's government. 7 The state of universal health cares coverage in China. 4.1.1 Total population coverage of the insurance plans. By the year 2008, a total of 87% of the people of China were already covered by various insurance schemes with the new rural cooperative medical scheme (NCMS) covering 68% of the total population, the urban employee-based basic health insurance scheme (UEBMI) covering 15 % of the total people and the urban resident-based primary medical insurance plan (URBMI) covering 4% of the total population. It has been shown through research and statistics that the rural health insurance cover increased rapidly with the majority of the rural residents (90%) being covered by NCMS compared by the urban coverage of 65% by the urban health insurance schemes by the year 2008 as shown in Table 1 below. Table 1: Population coverage of health insurance plans by urban and rural area Schemes 1998 2003 2008 Urban health insurance plans (%) 52.5 49.6 64.8 Rural health insurance system (%) 4.7 3.1 89.4 Data source: National Health Services Survey in 1998, 2003, and 2008. 4.1.2. Health care benefits coverage. Depending on which insurance cover someone is enrolled to, there are differences regarding health care benefits coverage. The NCMS in about 70 % of the counties, encompasses both inpatient and outpatient services. In the remaining 30%, it covers only inpatient services. The UEBMI includes 100% inpatient and outpatient health care services. The URBMI covers only inpatient services. Since the UEBMI has a free source of financing that is the employer/ employer's contribution, it has a more generous coverage as compared to the other two schemes. The URBMI and NCMS schemes majorly rely on government subsidy which might not be that 8 The state of universal health cares coverage in China. efficient and adequate. Regarding drug coverage of different systems, there exists a big gap in coverage with the urban insurance plans covering about 2,000 drugs and the rural protection schemes such as the NCMS scheme covering only about an average of 400 drugs. Such a big discrepancy! 4.1.3. The health insurance plans' financial protection. Since the inception of the various health insurance schemes in China, they have experienced rapid growth in their premiums over time. The NCMS scheme experienced a rapid increase from an average per capita premium rate of about 30 CNY between the year 2003 and 2005 to 50 CNY in 2006 and 100 CNY in the year 2008. Since this scheme heavily relies on the government subsidy, the government subsidizes 80% of the premiums paid with 40% from the national government and the other half from the county governments. The per capita premium level of the UEBMI scheme is found to be about ten times higher than NCMS scheme in the rural areas hence very expensive as shown in Table 2 below. The URBMI scheme per capita premium levels falls between NCMS and UEBMI levels with an average of about CNY 350. Due to difference rates of per capita premium levels charged by the three different insurance schemes, the reimbursement levels also differ with clients who subscribe to the UEBMI scheme claiming higher compensation since they pay higher premiums to cater for their medical expenses. 9 The state of universal health cares coverage in China. Table 2: Arrangements of health insurance schemes in 2008. Schemes UEBMI URBMI NCMS Premium per capita (CNY). 1,400 350 100 Ceiling (CNY). 100,000 80,000 20,000 Reimbursement rate (%) 72 50 40 The source of data: based on reports from the National Health Services Survey in 2008 and Ministry of Human Resources and Social Security. Since the introduction of health insurance schemes, the utilization rates of health facilities increased a great deal in particular among the poor and the low income earning citizens. It increased patient satisfaction and the rate of unmet needs reduced from 34.7% in the year 2003 to 27.9 % in the year 2008 (CHSI, 2009). From a study that was conducted using the data from the National Health Services Survey reports, it was found out that the NCMS insurance scheme significantly reduced the households suffering financial strain due to medical expenses by about 50 % in the year 2008 (Zhang Yh, 2009). Another study conducted by Wu (2009) found out that the UEBMI scheme significantly reduced the out of pocket expenditure payment for medical bills among the older adults. 4.1.4. Results of the analysis. From the results of the above analysis of various health insurance schemes in China, I came up with the following observations: • For various health insurance plans to be useful to the subscribers, there need to be the improvement in the health care delivery resources and increase in some the human resource. It can be achieved by the provision of adequate incentives to make sure the 10 The state of universal health cares coverage in China. health care providers supply health care services of high quality but of low cost to the patients. • As the insurance coverage increase, the should be policies that set priorities for the coverage of depth and height to make sure a cost effective health care service is chosen to form part of the benefits package. • There has been a fast development in China's both urban and rural insurance schemes that ensures the government creates an equitable financial model to make sure that the citizens do not suffer financial ruin due to their illnesses. • It would be difficult to integrate both the urban and rural insurance schemes till the significant differences that exist in their premium levels are sorted to make the margin that exists is narrowed which might be too difficult to achieve. 4.2. Essential public health programs coverage. It has been shown that there has been a great decrease in maternal and infant mortality and morbidity rates hence an increase in the life expectancy rate due to various strategies and interventions that have been put in place to improve the public health sector. However Tang et al. (2008) observed that there still exist disparities in the health status of the citizens among the populations and between regions that are urban and rural areas. The various public health programs that I would analyze in this section include management of non-communicable diseases, immunization rates, and maternal health care (antenatal and post-natal care). 11 The state of universal health cares coverage in China. 4.2.1. The population coverage of various identified public health services. The childhood vaccination rates approach over 90%, but the richer regions such as East coastal provinces have higher coverage rates than in the two other areas as shown in Table 3 below. The poor areas i.e. the Western provinces have the coverage of DAT, pertussis, and tetanus lower than 90%. Table 3: Population coverage immunization programs in 2008(%). Vaccines Total East Middle West BCG 98.8 99.3 98.7 98.4 DAT, Pertussis, and Tetanus. 90.7 93.2 91.2 88.5 Polio 92.4 94.5 90.6 92.3 Measles 92.1 91.5 93.8 91.4 Hepatitis B 93.3 95.6 93.7 91.5 The source of data: CHSI 2009. There has been an improvement in maternal health care services due to various critical interventions that have been put in place. The data obtained indicated that the proportion of women who never attended antenatal clinic visits reduced from 25.3% in the year 2003 to about 5.6 % in the year 2008. The poor provinces got lower coverage compared to the rich areas (CHSI, 2009). The post-natal care is, however, less as compared to the antenatal care are the middle provinces reporting the lowest rates. 12 The state of universal health cares coverage in China. Table 4: Maternal health care population coverage in the year 2008 (%). Healthcare Total East Middle West Antenatal 94.4 97.6 94.9 91.5 Post-natal 56.9 62.7 43.0 61.2 The source of data: CHSI 2009. Recent data suggests that there have been a rise in non- communicable diseases in China in both rural and urban areas. In the year 2008, 80% of the reported deaths were due to noncommunicable diseases with the incidence of hypertension and diabetes increasing two-fold. Yang et al. (2010) report that the prevalence of diabetes has become higher among the urban population as compared to the rural population i.e. 11.4% and 8.2% respectively. The urban areas have higher population burden of non-communicable diseases compared to the countryside evidenced by Table 5 below. Table 5: Population coverage of management of diabetes and hypertension in 2008 (%). Non-communicable diseases Total Urban Rural Hypertension 43.8 57.5 28.1 Diabetes 46.3 61.9 21.1 The source of data: CHSI 2009. 4.2.2. Dosage levels in the public health programs. The fact that China has a high population doesn't mean that they have high dosage coverage of the essential public health services. For example, the WHO recommends five dosages of vaccination for Pertussis, Tetanus, and DAT but it was found that in the year 2008, 13 The state of universal health cares coverage in China. there was average dosage coverage of about 3.37 doses per immunized child which is below the recommended dosage (CHSI, 2009). According to the Ministry of Health guidelines sin China, a mother should attend a minimum of 5 antenatal clinic visits and have examinations done but data shows that only 78.5% of the women in urban areas and 43.9% of the pregnant women in the countryside had the recommended 5 or more antenatal examinations in the year 2008 (CHSI, 2009). 4.2.3. Financing of the public health programs. Since public health deals with the prevention of occurrence and controlling of a disease, it helps cut cost on the medical expenditure in a treatment of both communicable and noncommunicable diseases. Since most of the disadvantaged people benefit from these public health interventions, the government should invest heavily regarding finances on public health programs. Just as Sturm (2002) observed, there has been a positive impact of various public health programs such as immunizations, control of non-communicable diseases and improvement of maternal health care on medical expenditures on both the health care providers and users. 4.2.4. Analysis observations. • There is a need to improve the quality of public health care services to cater for the needs of the ever growing population. • China has reached the level of universal coverage on particular public health interventions such as childhood immunizations that stand at a rate of above 90%. • Public health is very crucial in making the health of a population of people better, and it has sustainably operated in China for many decades. 14 The state of universal health cares coverage in China. • Improving public health services with proper financing is a significant step and requirement towards achieving universal health in any given country. • Non-communicable diseases whose control is low in rural areas are major causes of various health problems and financial constraints. 5. Conclusion. I would like to conclude that universal health care is very essential and the key to any country that is committed to improving the health of its citizens. A state that invests in the health of its citizens is an economically empowered state as its health citizens can take part in various economic activities in the country hence improving the economy. With well laid down policies and the government's commitment, achieving universal health coverage is possible. The noncommunicable diseases that have become prevalent in the recent decades should not be overlooked as they are becoming leading causes of morbidity and mortality. To sum all these up, I would conclude by saying, "a healthy nation is a wealthy nation." 6. Recommendations. I would wish to provide the following recommendations to the government of China: • The government should put a particular focus on the rural population as it is evident from the above study that those living in the countryside are often neglected as evidenced by low immunization rates and increased disease burden. • There should be policies put in place to minimize the discrepancy that exists among the various insurance schemes to ensure uniformity in the types of services covered by the different systems. 15 The state of universal health cares coverage in China. • There should be increased funding to the public health insurance schemes so that they can enhance the number of services that they cover. • More emphasis has to be put in place in the public health programs especially in the prevention of non-communicable diseases which are now one of the leading causes of morbidity and mortality. • There should be incentives provided to the health care providers to motivate them to continue providing quality services not only to the wealthy but also to the poor and the disadvantaged/ vulnerable groups. 7. Implications. With the improvement in health care, delivery systems in China and the achievement of universal health coverage, China's economy will significantly improve; the life expectancy will increase hence a more experienced and productive economy, and this will go a long way in reducing disease burden. There will also be some financial implications as the government of China will have to increase its budgetary allocation towards health. It might cause a financial strain to China, but the long term effects of having a healthy population are worth taking this action. With improved health care, China will become a model country with the best healthcare system and serves as an example to the developing countries. There will also be increased a rate of medical tourism to China which earns the country and the citizens more income hence improving the economy a great deal. 16 The state of universal health cares coverage in China. Bibliography. i. Callahan, D. (1973). The WHO definition of' health.' Hastings Center Studies, 77-87. ii. CHSI (Center for Health Statistics and Information, Ministry of Health). National Health Services Report. Beijing, 2009. iii. Grossman, M. (1972). On the concept of health capital and the demand for health. Journal of Political Economy, 80(2), 223-255. iv. Hall, J. J., & Taylor, R. (2003). Health for all beyond 2000: the demise of the Alma-Ata Declaration and primary health care in developing countries. Medical Journal of Australia, 178(1), 17-20. v. Liu Y. Reforming China’s urban health insurance system. Health Policy 2002; 60:133– 150. vi. Tang S, Meng Q, Chen L, Bekedam H, Evans T, Whitehead M. Tackling the challenges to health equity in China. The Lancet 2008; 372: 1493-501. vii. WHO. Sustainable health financing, universal coverage, and social health Insurance. Ninth plenary meeting 2005, Eighth report. viii. Wu J. The impact of social health insurance schemes on healthcare utilization and medical burdens. A research report from the National Health Services Survey. 2009. ix. Yang W, Lu J, Weng J, et al. Prevalence of Diabetes among Men and Women in China. The new England Journal of Medicine 2010 marches 25. x. Zhang YH. The impact of NCMS on medical expenditures of inpatient care. Beijing: the unpublished technical report from National Health Economics Institute, 2009. 17
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