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Yueran Zhang senior contributor

For China’s Healthcare System, One Small Step Forward

At the end of August—a month filled with miserable, bloody accidents in China–finally came a piece of good news.

On August 30, the Chinese Ministry of Health, together with five other bureaus, launched a new healthcare insurance program, referred to by Chinese media as “Severe-disease Insurance” (大病医保). The new program would reimburse at least 50% of the expenses of severe disease treatment, not counting that portion already covered by basic healthcare insurance. Those who participate in China’s basic medical insurance program are automatically enrolled in the new program, without paying any extra fees. “Severe diseases” are regionally defined as conditions for which the cost of medical treatment exceeds the average annual income of residents in a given region. The higher the expense, the larger proportion that will be reimbursed.

Chinese citizens lining up to pay for medical care

On Sina Weibo, China’s Twitter, netizens cheered in relief. @赤图十戒 exclaims: ”The country is making progress quietly. Cheers!” The program also helps bolster the image of China’s government, which, despite prevalent online censorship, remains a favorite target for netizen complaints. @Julius1985’s comment is illustrative. “Finally, [the government] did something that a human being would do.”

But the reform is not a surprise gift from the Chinese government, but rather the result of a continuous push by citizens and netizens alike. Cases of desperately ill rural children have been widely shared on social media. Chinese netizens and Chinese media recently called on the government to cover a large portion of expenses for a young girl, Bi Xin (碧心), who suffered from leukemia. While their efforts at getting government assistance were successful, Bi Xin recently passed away

Months before the launch of the official program, NGOs created a public welfare foundation (@大病医保) to help rural children in desperate need for medical care. These privately-organized charitable activities appear to have persuaded the government to follow in step. As Hu Xijin (@胡锡进), chief editor of the conservative Global Times, opined, “The program is not bestowed by the government, but attained through the struggle of all Chinese. The public should keep in mind that more welfare is to be fought for by society. It will never be granted by God.”{{1}}[[1]]它不是政府的赐予,是全体中国人干出来的。公众应当清楚,今后的更多福利还得要靠全社会继续干出来,天上掉不下来.[[1]]

Another highlight of the program is that private enterprises, for the first time, are being officially encouraged to enter the arena of public welfare. Private insurance companies are to be the providers of severe-disease insurance, paid for by the government via money from the basic medical insurance fund (基本医疗保险基金). The government hopes that private companies can use the funds efficiently so that the initiative creates no extra burden on citizens. Also, it is expected that hospitals under the supervision of insurance companies can provide better service. 

A number of China's "severe disease" sufferers in need of the most care. Via Weibo

But netizens question whether private companies would actually perform those hoped-for functions. After all, as @活着就快乐着 points out, private companies are meant to make profit. “To insurance companies, the severe-disease insurance is nearly a public undertaking with no room for profit, challenging the management skills of the companies.”{{2}}[[2]]大病医保对保险公司而言差不多是公益事业了,这很考究保险公司的运营能力.[[2]]

While details about the policy’s implementation are yet to be announced, some concerns have emerged on social media, calling for government to be cautious and deliberate when crafting detailed guidelines for execution. Some are aware that even with the reimbursement, the poor would still be unable to shoulder their portion of expenses for treating a “severe disease,” which effectively means that only China’s rich and middle class have access to the benefits of the new program. In other words, because the program is funded by China’s basic medical insurance fund, which is funded by all Chinese taxpayers, the poor will effectively be paying medical bills for the rich. The program also has risks. If not carefully designed, it may incentivize the rich to spend more money on medical treatment, making medical services more expensive, further disadvantaging China’s poor.

Others worry that if the government squeezes too much money from the basic insurance fund to pay for severe-disease insurance, the standard reimbursement issued via basic insurance may be negatively affected. Shortfalls in the basic insurance fund and the social security fund arising from government mismanagement have already been reported in many provinces. These trends cast a shadow on government’s ability to sustain both the severe-disease insurance and the basic insurance plans while hewing to its promise that citizens need not pay extra fees.

Although it remains unclear whether the execution of the policy will realize its apparently good intention, one conclusion can already be reached: China’s healthcare system is still backward when compared to its fast-moving economic development. At the end of the day, a good healthcare system is not about paying for severe disease treatment, but preventing severe diseases. To achieve a comprehensive reform of the healthcare system, China has a long way to go.

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Yueran Zhang

Yueran Zhang is a student at Duke University, class of 2015, currently majoring in sociology and math. He spent all of his life before college in Beijing.
  • Fleur

    This is great news indeed!

  • Guest

    This is great news indeed!