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Universal healthcare is not a panacea for the problems of China’s health system

To solve the problem of affordability for low-income groups, the Chinese government should increase its budget for their healthcare to guarantee basic medical services

By NewsChina Updated Jul.1

As China has largely gotten the coronavirus outbreak under control, there has been much discussion about the development of China’s healthcare system. Among the measures taken by the Chinese government to deal with the pandemic, the most effective is that the government offered free treatment to all Covid-19 patients.  

It is estimated that the Covid-19 outbreak in China incurred direct costs of 1.5 billion yuan (US$211m) for medical services. On average, each Covid-19 patient incurred a cost of 17,000 yuan (US$2,400), and each severe case cost about 150,000 yuan (US$21,200). Two-thirds of the cost was paid by public medical insurance funds, with the rest funded by specially allocated government budgets.  

Citing the success of the strategy, there are now rising calls for China to adopt a universal healthcare system that provides free medical services to all citizens for all types of treatment. Li Ling, an economics professor and director of Peking University’s China Center for Health Development Studies, argued that the free treatment the government offered to Covid-19 patients lays the groundwork for the introduction of a universal healthcare system in China. She pointed to the progress China has made in medical services and to China’s position as a global manufacturing hub of medical supplies and equipment. 

While Li paints a rosy picture and emphasizes the pros of universal health coverage, we must be aware of the cons of such a system. Chinese people are familiar with universal healthcare. Prior to the launch of reform and opening-up in the late 1970s, China had universal healthcare for several decades. While providing some basic medical care for the population, the system under a planned economy was known for its inefficiency and poor standards.  

Like all other healthcare systems, universal healthcare has disadvantages. Not only is it prone to abuse and takes up a lot of government spending, it can lead to long waiting lists for elective procedures. For example, in Canada, where per capita GDP is more than four times that of China, the average wait time for a non-emergency medical procedure is about five months. In some provinces of Canada, healthcare expenses account for 40 percent of government budgets. 

In addressing the various problems of China’s healthcare system, we should not expect a simple and miraculous system, but should take a more precise approach. A major problem with China’s healthcare system is the unbalanced distribution of medical resources. While the country’s best medical resources are concentrated in top hospitals in big cities, the people have low trust and confidence in medical institutions at the community level, which has not only led to increasing tensions between patients and medical professionals, but also resulted in overwhelming workloads at hospitals in big cities as people flock to seek better treatment.  

To solve this problem, China needs to tackle the problem of efficiency and equality at the same time. To solve the problem of affordability for low-income groups, the Chinese government should increase its budget for their healthcare to guarantee basic medical services. In the meantime, China should make efforts to boost the quality of health services at the grass-roots level by establishing a community-based general practitioner system.  

In addition, the government should encourage the development of private hospitals and the medical insurance industry to increase the efficiency and quality of health services.  

Without addressing the specific problems with China’s healthcare system, adopting universal healthcare may lead China back to the planned economy periods of pre-reform when high-quality medical services were only available through nepotism and personal connections.