China's health care reform: A tentative assessment

China has recently unveiled an ambitious new health-care reform plan, entailing a doubling of government health spending as well as a number of concrete reforms. While the details of the plan have not yet been completely announced, we offer a preliminary assessment of how well the reform is likely t...

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Bibliographic Details
Published inChina economic review Vol. 20; no. 4; pp. 613 - 619
Main Authors Yip, Winnie, Hsiao, William
Format Journal Article
LanguageEnglish
Published Elsevier Inc 01.12.2009
Elsevier
SeriesChina Economic Review
Subjects
Asymmetric information
China (People's Republic)
Health Care
Health Care Health insurance Income distribution Asymmetric information Incentive compatibility
Health insurance
Health policy
Incentive compatibility
Income distribution
Markets
Public health
Subsidies
Asymmetric information
I18
Health insurance
Income distribution
Health Care
Incentive compatibility
I11
I38
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Summary:China has recently unveiled an ambitious new health-care reform plan, entailing a doubling of government health spending as well as a number of concrete reforms. While the details of the plan have not yet been completely announced, we offer a preliminary assessment of how well the reform is likely to achieve its stated goal of assuring every citizen equal access to affordable basic health care. The reform is based on three fundamental tenets: strong role of government in health, commitment to equity, and willingness to experiment with regulated market approaches. Within this framework, the reform offers a number of laudable changes to the health system, including an increase in public health financing, an expansion of primary health facilities and an increase in subsidies to achieve universal insurance coverage. However, it fails to address the root causes of the wastes and inefficiencies plaguing China's health care system, such as a fragmented delivery system and provider incentives to over-provide expensive tests and services. We conclude that China should consider changing the provider payment method from fee-for-service to a prospective payment method such as DRG or capitation with pay-for-performance, and to develop purchasing agencies that represent the interests of the population so as to enhance competition.
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ISSN:1043-951X
1873-7781
DOI:10.1016/j.chieco.2009.08.003