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China wants to establish a basic health system to provide effective, low-cost health services to its more than 1.3 billion citizens. Can it succeed at this ambitious goal?
China’s macroeconomic growth has enabled it to make significant progress in many aspects of public health. Over the past 20 years, life expectancy has risen significantly, and childhood mortality rates have plummeted by more than half. The country also has markedly more hospital beds than it did only a decade ago. Nevertheless, China still faces a number of challenges. Health care resources are unequally distributed across the country— wealthier cities tend to have good hospitals, but many other cities and most rural areas lack them. The country also lacks an effective primary care system. As a result, patients often find it difficult to get access to care. Among those who can get treatment, dissatisfaction is high. Patients frequently complain that health care is too expensive, that most health facilities are in bad condition, and that the services delivered are poor. Furthermore, the population is aging, and the prevalence of “modern” chronic diseases is rising.
In response to growing social pressures, China’s central government announced a series of health care reforms last year. Its goals are ambitious: it wants to establish a basic, universal health system that can provide safe, effective, convenient, and low-cost health services to all of China’s more than 1.3 billion citizens. The reforms therefore affect most facets of health care delivery, including health insurance, primary care, hospital management, medications, and public health.
To support the reforms, the government has promised 850 billion renminbi—about $125 billion—in incremental spending by 2011, a substantial increase. (In 2008, it spent approximately $52 billion on health care, about one quarter of the country’s total health care costs that year.) While the government is focusing its efforts on ensuring that all citizens gain access to basic health care services, it is also permitting private payors and providers to play a role in health care delivery, especially by addressing the additional needs of higher-income patients.
The reforms will greatly expand access to health services in China. Many of them will also improve quality of care and encourage the delivery of more cost-effective care. However, it remains unclear how quickly the reforms can be implemented and how effective they will be in improving health outcomes. We believe that there will be dramatic differences in the reforms’ pace and impact, largely because of funding availability (which varies significantly among China’s regions and cities, the entities responsible for implementing many of the reforms) and the institutional capability of various stakeholders to execute the needed changes.
About the Authors
Claudia Süssmuth-Dyckerhoff, a director in McKinsey’s Shanghai office, leads the Firm’s health systems work in Asia. Jin Wang, a principal in the Shanghai office, focuses on health care delivery in China.