A hard-hitting State Development Research Centre report on China’s ailing public health system appears set to “elevate debate over health care to a new level” according to a spokesperson from the Word Health Organisation office in Beijing.

Over the last decade, international agencies and Chinese researchers have published forthright criticisms of the erosion of public health services, but this is the first, comprehensive critique to emanate from a leading Chinese government policy unit. The report, which was two years in the preparation, was co-financed by WHO and the UK Department for International Development, but carried out by the Development Research Centre, the lead think-tank under China’s State Council.

After praising Communist China’s early health care gains, the report notes that reform-era commercialisation of state hospitals, far from achieving market efficiencies, has led to spiralling treatment costs. Government control over services has progressively diminished as user charges have displaced government funding as the hospitals’ main source of income. This has led to fragmentation of provision and unfair competition, rather than referral and cooperation, between hospitals, which prescribe drugs and surgical procedures to maximize profits rather than according to medical need. Meanwhile, says the report, only one quarter of the urban population and one tenth of the rural population has medical insurance coverage.

Moreover, the report argues, attempts since 2003 to revive cooperative medical insurance in rural areas have largely failed because of ‘obvious defects’ – notably, that the poorest and most vulnerable citizens are unable to make voluntary contributions, and that there are no checks in place to prevent hospitals from fleecing the patients.

The systemic malaise “seriously affects social and economic development” and has allowed the resurgence of communicable diseases such as tuberculosis and schistosomiasis.

“To our shame,” the report notes, WHO ranked China fourth from bottom in a health equity league table of 191 countries.

The report may signal a major re-think on public health care, prompted by a 2003 SARS epidemic that jolted government complacency. According to Roy Wadia, of WHO in Beijing, the report “shows that the government has seen for itself that steps it has taken so far have not succeeded as they were meant to.” There is, he says, a “strong internal debate as to how to move ahead . . . Basically the debate has now been narrowed down to how the government can reshape and increase its role in health care.”

NY, August 30