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Health care reform in China, one small step at a time

As the U.S. continues to grapple with what the Supreme Court decision last week will mean for their health care coverage, China has begun to experiment with their own reforms. In the U.S. our policies left millions without health insurance, and individuals struggled with bankruptcy and chronic illnesses. In China, the situation has deteriorated to a point where patients stab their doctors, hospitals have police stations, and demonstrations are held several times a month in front of the public hospital where I work.

I’ve written about China’s hospitals before in Storming the hospital and Chinese doctors speak out about China’s health

The reforms being tried in all of Shenzhen’s public hospitals and one of Beijing’s look to address one of the key underlying issues – over prescription. When China’s health care system began to fall apart in the 1980’s, hospital’s turned to selling drugs to make up for their losses in gov’t funding and drug sales came to make up over half of hospitals’ revenues. This in turn has almost completely destroyed the trust between patients and doctors, with patients assuming that any medication suggested by their doctor might just be a scam and doctors fearing retribution from patients and their families. This reform looks to remove the profit from selling prescription drugs and makes up for the losses with higher consulting fees (which I have long argued are too low; you can see two doctors at my hospital for the cost of taking a taxi, or three doctors for the cost of a double cheeseburger meal at McDonalds).

This I believe is exactly the direction Chinese health care should be moving in, as it  should help restore the trust between doctor and patient (collecting cash filled envelopes from patients and drug companies are two other factors that will need to be addressed). As the People’s Daily story reports, Beijing residents’ health insurance will cover the bulk of the consultation fees, and the cost of medicines have dropped roughly 7 yuan per inpatient, and 235 yuan per outpatient according to Shenzhen’s committee for health, population and family planning (my hospital sees over 2 million outpatients a year, so this is a substantial savings for the public). Patients interviewed for the story reported a savings on medicines from 40-80 yuan, this should be a great financial relief for those suffering from chronic diseases. This will also hopefully reduce the abuse of antibiotics that have been creating increasingly drug resistant illnesses.

An all too common site at Chinese hospitals.

This step though, is really only beneficial to the people who live in Shenzhen and Beijing, as everyone else is excluded from their local insurance systems. This is an especially large concern in Beijing because many people from other provinces journey to the capital for health care. For them the cost remains roughly unchanged, which was already considered too expensive*, and means that they will either rely on what is largely substandard healthcare in their hometowns or go untreated (which create greater social costs if it is a communicable disease).

Further more migrant workers who lack a hukou will be greatly affected, since it is impractical to return home for health care and too costly to see a doctor, and the result will likely be an increase in illegal clinics. These clinics feature unknown drugs, poor hygiene and staff without medical training; these are the kinds of places that reuse needles and spread disease. Just yesterday People’s Daily reported that a 2-year-old child died in an illegal clinic in Beijing over the weekend. The clinic where the child died was known to the police, the owner had been previously punished for illegally practicing medicine, but they failed to close the facilities. PD also reported that Beijing had an estimated 1,200 illegal clinics as of 2009. A migrant worker interviewed for that story said, “Medicine is relatively cheap at illegal clinics. Public hospitals are expensive for us and it’s not easy to get registered in the hospitals.”

So while this reform is one step that needs to be taken to restore trust in the system, without further reforms it places additional pressure on rural residents and migrant workers increasing the already gaping chasm between the social benefits these groups receive. To paraphrase what an administrator told me, “it is ridiculous to try and create a modern health care system without a modern, national insurance system.” She hopes China will expand insurance options and open up private health insurance systems, even after seeing the mess they created in the U.S. In her view, they would spark the competition needed to cause the bigger reforms in the system. She added that China is a developing country and that it will take time to change the health care system, China’s patients though have already run out of patience.

*My OTC allergy medication costs more in China ($.33 per pill) than in the U.S. ($.04 per pill)

We should be worried about China’s health – Chinese doctors speak out

After reading an article about the myriad problems facing China’s health system, I asked the doctors in my medical English class to briefly reflect on the system based on their own ideas and opinions. Of the 17, 15 doctors wrote that China’s system faced serious challenges. The following are excerpts from their papers that I think accurately reflect the challenges currently facing China’s health. I have not fact checked them, and in some cases I’m fairly certain they aren’t accurate, but that the doctors believe these statistics is revealing.

This one echoed many of the main points of the other doctors.

“For patients, medical services are too expensive. It is said that the average cost is about 500 yuan for a common cold in a mid-level hospital (the average income per day is about 80RMB in Beijing). About 70% of people living in the city get social insurance, which could cover 60% of the cost. For chronic diseases, the cost is even more. So people with diabetes or cerebral vascular disease, do not go to see the doctor and do not take the medicine regularly because they cannot afford the cost. What is worse, some people living in rural areas do not go to the village hospital when they are ill because they have to sell their house and go into debt to treat the disease. In order to raise China’s health level, the cost of medicine should be lowered.

For doctors, this job is no longer a good choice. 90% of doctors said that they are extremely tired. Most doctors have to work 60 hours per week (the average work week is 48). Additionally, being a doctor is a high pressure job which means that they have to focus almost every minute. 30% of doctors admit that they are depressed. In these years even the doctor’s personal safety is threatened. Several doctors were killed by their patients or their family members because of the unexpected therapeutic effects. However, the income for the doctor is low, which is not enough to raise a family. In this situation, some doctors choose to quit for an easier life and fewer students want to go to medical school.”

Red Envelopes and unnecessary prescriptions appeared in more than half of the papers –

“Although most doctors do their best to help patients, there are a few doctors who did some ugly behaviors such as accepting red envelopes, lacking responsibility, and so on.”

“The government does not pay enough money for the health-care system, so the hospital and doctors want patients to buy more drugs to get more money. Even some drugs are unnecessary. 75% of hospital’s income is from drug sales. World bank’s report on China’s health system found that less than 1% of drug prescriptions were reasonable in 2005.”

Concerns for safety came up in nearly half of the papers, this was partially because of the murder of a doctor in Harbin around the time of the assignment.

“…Under these circumstances doctors are worried about troublesome patients and their families. They only dare to make secure diagnosis and operations that insure success. If the risk of the operation reaches a certain degree, some doctors may avoid it. Therefore many patients who have difficult or rare diseases can’t get treatment.”

Government waste was also a major concern, and it surprised me that they were so forward with their discontent.

“The rich and officials waste medical resources. VIPs are very common in many large hospitals. They always do many unnecessary tests and waste the expert’s time.”

“Currently, China is an extremely unfair society. The possession of medical resources is extremely unfair too. It seems the Chinese government only serve themselves. It is reported that about 80% of the health care costs were consumed by 8.5 million governmental officers of the Chinese Communist Party. Despite a loud voice demanding an increase in spending on public health care, the government never wants to spend too much on medical care. It is not difficult to understand. The Chinese Government has a huge budget for spending on cars, banquets, travel, and economic development, but it cannot afford the health care of the large population.

Chinese health is a big problem, and I do not believe that the Chinese gov’t will change its policy on public health care in the near future.”

“Huge gaps in medical resources make many people prefer to seek treatment at prestigious hospitals, instead of at local health centers, for even minor complaints such as headaches and colds. In many large- and medium-scale cities of China, doctors see at least 50 patients a day. Emergency services are so overcrowded that the staff has set up beds in the corridor. People start lining up early in the morning to obtain appointments the following day.”

“Production and circulation of drugs in China is in full accordance with the operation of the market – to pursue profit maximization. This is a serious departure from the public welfare and health services. As of the end of 2005, China has more than 4,000 certified pharmaceutical manufacturing enterprises, as well as 120,000 of the pharmaceutical retail enterprises. In 2005, China’s State Food and Drug Administration approved 1,113 new drugs, while the U.S. FDA approved less than 100.” (This author later wondered whether the oversight was really sufficient).

China should be aiming lower, not higher

Recently I had the chance to discuss the fascinating article, “The Sick Man of Asia” with the doctors at my hospital. The author, Huang Yanzhong, argues that despite China’s seemingly impressive gains in health over the past 60 years, they are lagging behind its economic growth. Furthermore, the author seems to argue that the average Chinese person (as far as health is concerned) saw greater benefits from Mao’s time in power than during Deng, Jiang, and Hu.

The author argues that Mao’s regime was able to make large gains because they focused on bringing medicine to rural populations. Huang also shows that the chaos of the Cultural Revolution caused the bureaucratic powers of the Ministry of Health to retreat, while millions of doctors were sent to the countryside.

Opening up and reform in the 80’s though focused resources into a few urban hospitals, which by 2004 were receiving 80% of all gov’t health spending. This problem was compounded by the new choices brought to rural residents with opening up, and people from the countryside bypassed the local clinics in favor of the bigger and better equipped urban hospitals. While I would not want to deny villagers the option of coming to the cities for treatment, it has exacerbated the issue and removes some of the pressure to reform smaller clinics.

Additionally, funding from the central gov’t for health was reduced during this time, making hospitals increasingly dependent on prescriptions, surgeries, and additional testing for income. This caused a rapid increase in the cost of treatment, and as a study from 2004 showed, nearly 41% of farmers living below the poverty line reported falling ill or being injured as a cause of their poverty.

Even more troubling is the fact that 60-80% of farmers died at home because they could not afford hospital costs. The author cites the fact that surgery for stomach cancer costs nearly 12,000 RMB, which is far more than an average farmer makes. A friend told me that farmers use the expression “得了阑尾炎,白种一年田” (appendicitis costs a year in the field) to complain about the high cost of medicine.

While China has continued to increase medical spending, especially after the outbreak of SARS, there is still a strong urban bias. In the two groups I discussed this article with, virtually none of the sixty doctors agreed with the author that healthcare had not improved much (which wouldn’t have surprised Huang; they work in a well funded urban hospital), but when asked if healthcare was unequal, they agreed unanimously. When asked “Who benefits from China’s health care spending?” The first answer was gov’t officials, followed by the rich, and finally people in cities. Nothing shows this more clearly than the fact that Shanghai’s life expectancy is now over 82.5 years, while the average for the rest of China is only 73 years.

Instead of focusing on improving healthcare across all segments of the population, the Party’s policies (and in some cases inaction) have reduced the possible gains that could have been made.

The priority given to the urban population after reform and opening up is something we’ve discussed before in relation to Hukou issues, and the state of rural education. China’s obsession with creating institutions for the elite, means that the masses are excluded from fully participating in the benefits of China’s growth.  

I think that many would agree that it was the push by the Party in the early days of Mao’s leadership for literacy and expanded access to education (for women and the poor) that have allowed China to become such a powerhouse in low-end manufacturing. The Party has also stated that for the economy to continue to grow, the country needs to move towards more skilled manufacturing, but they didn’t start taking steps to promote vocational education until a few years ago. Instead, for years the focus had been on creating “world class” universities and pushing more students through graduate programs. A Chinese friend told me that he had always opposed this because there were so few jobs requiring such degrees, other masters students I have met have agreed.

The gov’t has also allowed the collapse of social security programs which in the past would have encouraged families to keep their children in school; some of China’s poorest counties have dropout rates of over 50%. These children are pulled out of school to try to support their family, frequently when a working family member falls ill or dies. Meanwhile urban children who fall behind their classmates are pushed out of schools by teachers who fear losing the bonuses that come with good exam scores.

With increasingly out of reach premiums for decent healthcare and schools that focus only on the most talented students in urban areas, it’s easy to see why some argue that China’s growth is unsustainable.These gaps in basic services between rural and urban citizens are a major cause of the gap between rich and poor; which consequently, drives a wedge between the people and the Party. The key then to stability is aiming lower, not higher.

Leaving China

Today my co-worker informed me that she would be sending her 14 year-old son to study in New Zealand, and she was understandably sad about it. For the last year he has struggled to meet the school’s standards, but has been left behind by teachers who care more about their own performance bonuses than helping him reach his potential. He is a good kid, who simply does not fit the model of Chinese education. His family feels like there are no decent choices for educating him in China, but hate to be separated.

My co-worker revealed part of the problem when she explained that every night he’s given hours of homework focused on memorizing answers. He doesn’t see the point, and she doesn’t either. After all even with her help, his English grades are only mediocre, and she has been handling English communications for the hospital for 2 decades (not error free, but certainly good enough). “Their grammar points aren’t practical, and none of them learn how to actually speak” she said, and from what I’ve seen, it seems to be a fair assertion.

Part of the problem is that China has attempted to develop faster than any other nation in the history of the world, which has provided many benefits, but seems now to be the source of many problems as well. Problems like: excess infrastructure, poor construction, rural protests, and a myriad of other concerns. While it’s clear that it is possible to build at record speeds, it’s not really possible to gain experience at the same speed.

This problem can be seen quite clearly in education. It’s an undisputed fact that there are thousands of English teachers, Chinese and foreign alike, that are not able to speak English fluently and clearly. So these teachers focus instead on text based activities that help cover their own deficiencies. Of the universities I have worked for, there have always been several teachers who have exclaimed that I was the first foreigner they had ever spoken to.

The problem is that China continues building (and expanding English programs) regardless of the ability to staff these projects. In education we can see that between 1978 and 2011, China established over 1,900 universities, and expanded enrollment from 850,000 students to over 22 million. If you do the math, you would see that schools have gone from an average of 850 students per campus, to over 11,000 in just 30 years. The lack of qualified professors seems to have been of little concern, as China heralded the success of expanding education.

In the effort to improve health care, China built nearly 20,000 clinics, hospitals, and health centers over the last few years, but only trained 60,000 new general practitioners. Of the health professionals I’ve talked with, experience is far more important than med-school itself, so these new graduates barely make a dent in the need for qualified medical staff. While the effort to expand health care should be applauded, it is not enough to simply build clinics, it will be years before these facilities are actually staffed with experienced practitioners.

In another discussion I had this week with a foreign engineer working here, I was told that crashes like the ones in Wenzhou and Shanghai were unavoidable without experienced operators. My Chinese friend quickly pointed out that this would mean that China shouldn’t be rushing ahead with new technologies, but instead be more cautious in expanding. The engineer agreed and shrugged his shoulders wondering out loud if the government would actually be willing to slow down. He said, “My company has provided many technology transfers to our Chinese partner, but simply having the hardware, and being able to build a safe and effective system requires much more than that.”

While China has seen nearly a hundred years of change in just thirty glorious years (note to self, it’s time to cut back on the People’s Daily reading), it has been largely a superficial change. Teaching methodology, medical experience, and engineering competency are still lagging behind what the infrastructure might suggest. For my co-worker’s son, it means he will be leaving behind his family and country for the next 4-5 years, and might never return, for others it has been far more costly.

Important note: I do not mean to say that all change has been pointless, simply that there are limits to how fast a country can develop. Literacy is up across the board as a result of expanded primary education, but English proficiency is still a distant dream and university education does not compare to Western universities. Life expectancy is up across the board, but this is partially a result of the civil war ending, and putting a stop to many of the Party’s early and disastrous policies. These numbers are also skewed in favor of China’s eastern cities, with life expectancy still lagging behind in the countryside. China has built thousands of miles of road and rail, which have helped improve China’s economy, but they are now crumbling under the weight of their own debt and occasionally simply crumbling from poor construction.

How China will Change

Continued from yesterday 

When life satisfaction disconnects from GDP growth, it has to be met in other ways to ensure the Party’s rule, and I believe we are approaching that moment. Today we will be looking at some of those options.

Note: while I do not have access to a crystal ball, I’m putting time frames on these issues to emphasize that these are not things that will be changed instantly, and to clarify the order in which they may happen.

Lowering Costs (The Present)

The Party knows that even though many Chinese people are far richer than their parents, many of them still cannot afford many of the basic appliances that can improve living standards. This is why the gov’t offers generous subsidies to people buying refrigerators, washing machines, and even televisions. While this was partially an effort to increase domestic consumption during the economic crisis, it has also helped maintain the Party’s popularity.

While I had read that this program was designed for China’s rural population, one of the doctors at my hospital told me that he had opted to purchase a new fridge instead of repairing the old one, because this choice was cheaper. He had a huge grin when he spoke of the savings, and the Party seems more than willing to foot the bill.

China has also been discussing further reducing taxes, even though the current rate is far below most (if not all) developed countries. As it stands , people are complaining of the 5-10% income tax they pay.

The gov’t is also scrambling to control inflation, housing prices, and even the cost of pork. Just today an article was published in the People’s Daily calling for an end to the “Cult of GDP”.

Social Programs (Next 5 years)

This is an area that I think is already undergoing major changes to help ensure the Party’s mandate to rule. In China’s most recent 5 year plan healthcare reform was one of the top concerns, and these concerns can be seen in the hospital I work in. Expanding medical coverage is just one way to improve the standard of living through social programs.

I would expect that they will also be pushing for further reforms in education and public transportation. These efforts will help to maintain favor beyond what a growing salary would maintain. At present these services are seen as inadequate, and I would expect these to be major expenditures over the next few years.

Better Environment (Next 5-10 years)

Much has been made of the recent protests in Dalian which were sparked over concerns of a PX factory (a deadly chemical). For the first time tens of thousands joined in the streets to demand action, and the gov’t did not crush them. While this protest was not about protecting the city’s green credentials, it was about citizen’s concerns about their own health (we’ll be looking at protests more tomorrow).

Beyond social programs, the Party is going to have to improve the environment if it wants to keep the people happy. This would most likely mean moving the worst factories to remote parts of China, because stability in the population centers is of the utmost importance.

When I visited Beijing in 2007 I was partnered with a local middle school student for language practice. When we visited the Temple of Heaven, the student could not walk more than 15 minutes without feeling in need of rest. Her lungs had been assaulted from birth by the capitol city’s filthy air. Citizens are just starting to demand action on air quality, and the Party will be forced to concede to maintain control (check out my review of When a billion Chinese jump, a thoughtful book on this issue).

Voice in Government (Probably 10+ years)

Once these other efforts fail to produce increasing life satisfaction (remember the Party needs improvement not just high satisfaction), and they will as there are again diminishing returns on each of these, the Party will be forced to take a final step – giving people a voice in gov’t.

Just to be clear, I don’t think that this new system will look like American democracy, but that it will be more transparent, and locally influenced than the current system. We are already starting to see the tiniest concessions in this area (which I mentioned last week in my discussion of Weibo), but the gov’t still is unwilling to make meaningful changes to the system.

At the moment the will of the people is limited to removing the most corrupt officials, but still lacks the ability to regulate gov’t much beyond the local level. This regulation is necessary to protect the other measures that were implemented to improve their life satisfaction.

Continued tomorrow when we’ll be considering how this change might come about.