Health insurance in China

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Health insurance in China is largely run by local governments. China has near universal health insurance coverage. Previously separate, health insurance for both urban and rural residents have been merged into a single system (Health Insurance for Urban and Rural Residents) since 2016.

Contents

Overview

Health insurance in China is primarily run by local governments. [1] : 267 

As of at least 2022, healthcare insurance is relatively underdeveloped in China. [1] : 268  Out-of-pocket payments are a significant proportion of total healthcare costs. [1] : 268 

Health Insurance for Urban and Rural Residents (2016-present)

In 2016, the government merged Health Insurance for Urban Residents and the New Rural Cooperative Medical System into a single system, Health Insurance for Urban and Rural Residents (HIURR). [2] [1] : 267  Under this system, the contribution rate, reimbursement rates, and government subsidies are the same for both urban and rural residents. [1] : 279 

As of at least 2022, China's health insurance coverage is near universal. [1] : 301 

In 2012, China implemented catastrophic disease insurance for urban and rural residents. [1] : 279  This insurance covers healthcare expenditures which exceed the maximum amount of reimbursement otherwise permitted under HIURR. [1] : 279  Residents do not contribute any additional fees for catastrophic disease insurance, which is funded through HIURR premiums. [1] : 279  Commercial insurers operate the catastrophic disease insurance and compete with each other to be awarded the right to do so in a particular region. [1] : 279–280 

History of rural systems

Rural Cooperative Medical System

People's communes replaced township governments in 1958. [1] : 269  Initially, healthcare stations were established as fee-for-service hospitals to cover several large production brigades (small villages were called production brigades, and several small production brigades together became large production brigades). [1] : 269–270 

During the Cultural Revolution (1966-1976), Mao Zedong emphasized the need to improve medical care in rural China. [1] : 270  The Rural Cooperative Medical System (RCMS) developed in the late 1960s. [1] : 270  In this system, each large production brigade established a medical cooperative station staffed by barefoot doctors. [1] : 270  The medical cooperative stations provided primary health care. [1] : 270  For treatment of major diseases, rural people traveled to state-owned hospitals. [1] : 270 

New Rural Co-operative Medical Scheme (2002–2016)

The system of people's communes ended in the early 1980s. [1] : 270  Farmers began to work independently on land allocated to them by their villages and production brigades were replaced by village unions. [1] : 270  Village unions did not have the financial capacity or ability to mobilize other resources the way that production brigades had. [1] : 270  Among the results of this, the RCMS dissolved and healthcare stations were privatized. [1] : 270 

As RCMS ended, 900 million rural people became uninsured. [1] : 270  The New Rural Co-operative Medical Care Scheme (NRCMS) [3] was established to overhaul the healthcare system, particularly intended to make it more affordable for the rural poor. [4] The NRCMS was initially outlined in Decisions on the strengthening of the rural health system issued in 2002 by CCP Central Committee, the highest decision-making authority in China. Pilots started in 2003, followed by fast expansion. [5] By 2008, more than 90% of total population was enrolled in NRCMS. [6]

NRCMS is a voluntary insurance scheme subsidized by local and central government. NRCMS differs from RCMS in the following perspectives: Administration and risk-pooling is set at county level, much higher than NRCMS's village level. Funds of NRCMS are provided by local and central government (for poorer regions) together, which contrasts with the old RCMS that was almost completely funded by the Chinese government and extended universally across all parts of China. [7] NRCMS covers expense in all level public healthcare facilities, though the rate varies by regions and by type of facilities, while RCMS provided access to the barefoot doctors only. [8]

The World Health Organization (WHO) summarized the success of NRCMS: the NRCMS rapidly expanded, with an increasing service bundle. It provided better access to higher quality service, and partly controlled medical costs. NRCMS is appropriate and convenient for China's enormous number of migrant workers who used to have limited access to healthcare. [5] In 2015, NRCMS spent CN¥293.34 billion (US$45 billion) on 670 million participants and 1.653 billion instances of medical service, with the average of CN¥437.8 (US$67.25) per capita. [9]

However, there are some difficulties that undermine the scheme's effectiveness in reducing out-of-pocket medical costs. To begin with, the benefit package of NRCMS is mostly limited to catastrophic and inpatient care. While these costs are covered, most outpatient visits requires substantial individual payment. [10] Secondly, the reimbursement rate varies across level of healthcare facilities, increasing the cost of high-level hospital visit. The details of the NRCMS show that patients benefit most from the NRCMS at a local level. If patients go to a small hospital or clinic in their local town, the scheme will cover from 70–80% of their bill, but if they go to a county one, the percentage of the cost being covered falls to about 60%, and if they need specialist help in a large modern city hospital, they have to bear most of the cost themselves, as the scheme would cover only about 30% of the bill. [11] Furthermore, a fee-for service structure in the healthcare system provides incentives for healthcare providers to prescribe medicine or perform treatment in excess than is necessary to treat the patient. [12] [13] In addition, NRCMS reduces the actual cost of a medical service, but patients prefer to purchase more medical services in response to the reduced cost, offsetting the benefits of NRCMS. [14] Those who are poor or in poorer regions benefit less from NRCMS, causing inequality. [15] [ dubious – discuss ]

History of urban systems

Labor Health Insurance and Government Health Insurance

In the early 1950s, China established Labor Health Insurance (LHI) to cover state-owned enterprise employees and employees of some urban collectively-owned enterprises. [1] : 274  Various labor departments managed LHI and its funding came from the enterprises. [1] : 274 

In the early 1950s, China established Government Health Insurance (GHI) for employees of government administrative units (like government agencies) and employees of operative units (like public schools, universities, and hospitals). [1] : 274  GHI was funded through taxes. [1] : 274 

Urban Employee Basic Medical Insurance (1999–present)

After then Chinese economic reforms, the cost of healthcare in China rose rapidly. Many urban employees lost their healthcare insurance due to reforms in state-owned-enterprises. As a result, urban areas saw a rising need for access to affordable healthcare. [10]

Beginning in 1995, the government began healthcare reforms and encouraged local experiments. [1] : 276  In 1996, the government stated that it would establish a new healthcare system in which each city would provide health insurance to urban workers. [1] : 276  In 1997, the CCP Central Committee and China State Council issued universal healthcare reform guidelines, an important part of which is to establish medical scheme in urban areas. [16] Urban Employee Basic Medical Insurance and Urban Residents Basic Medical Insurance was created to cover healthcare expense for urban working residents and non-working residents respectively.

In 1998, Urban Employee Basic Medical Insurance (UEBMI) was introduced to provide healthcare access to urban working and retired employees in public and private sectors as well. The UEBMI is administered at municipal level, higher than NRCMS. The UEBMI is funded by 8% deductions from employees' wages; of which 6% are paid by employers and 2% by employees, [17] however these rates can vary by municipality. It differs from other types of insurance schemes in that UEBMI is mandatory. In 2014, roughly 283 million were enrolled, contributing CN¥80.3 billion, CN¥283.74 per capita (US$12.97 billion in total, US$45.83 per capita), with an expenditure of CN¥66.9 billion, CN¥236.4 per capita (US$10.8 billion in total, US$38.19 per capita). [9]

Urban Residents Basic Medical Insurance (2007–2016)

In 2007, Urban Residents Basic Medical Insurance (URBMI) started to provide healthcare access to urban residents that are not covered by UEBMI: children, students in schools, colleges and universities and other non-working urban residents. [18] It became nationwide in 2010. [1] : 13  In 2015, 376 million urban residents (over 95%) [19] took part in URBMI.

URBMI is a government-subsidized, household-level voluntary medical insurance, administered at municipal level. The URBMI is funded mainly on individual contributions (CN¥245 for adults; 2008 pilot), and partly government contributions (at least CN¥80 per capita). Additional government contributions are given to undeveloped central and western regions, and poor or disabled individuals. [10] Research showed that URBMI helped improve healthcare utilization and residents' health conditions, especially for low-income residents. [20] [21] Studies also suggested that URBMI was a step towards a universal healthcare system. [22]

Related Research Articles

<span class="mw-page-title-main">Healthcare industry</span> Economic sector focused on health

The healthcare industry is an aggregation and integration of sectors within the economic system that provides goods and services to treat patients with curative, preventive, rehabilitative, and palliative care. It encompasses the creation and commercialization of products and services conducive to the preservation and restoration of well-being. The contemporary healthcare sector comprises three fundamental facets, namely services, products, and finance. It can be further subdivided into numerous sectors and categories and relies on interdisciplinary teams of highly skilled professionals and paraprofessionals to address the healthcare requirements of both individuals and communities.

<span class="mw-page-title-main">Health in China</span> Overview of health in China

Health in China is a complex and multifaceted issue that encompasses a wide range of factors, including public health policy, healthcare infrastructure, environmental factors, lifestyle choices, and socioeconomic conditions.Although China has made significant progress in improving public health and life expectancy, many challenges remain, including air pollution, food safety concerns, a growing burden of non-communicable diseases such as diabetes and cardiovascular disease, and an aging population. In order to improve the situation, the Chinese Government has adopted a series of health policies and initiatives, such as the Healthy China 2030 program, investment in the development of primary health-care facilities and the implementation of public health campaigns.

Health insurance or medical insurance is a type of insurance that covers the whole or a part of the risk of a person incurring medical expenses. As with other types of insurance, risk is shared among many individuals. By estimating the overall risk of health risk and health system expenses over the risk pool, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to provide the money to pay for the health care benefits specified in the insurance agreement. The benefit is administered by a central organization, such as a government agency, private business, or not-for-profit entity.

Universal health care is a health care system in which all residents of a particular country or region are assured access to health care. It is generally organized around providing either all residents or only those who cannot afford on their own, with either health services or the means to acquire them, with the end goal of improving health outcomes.

Single-payer healthcare is a type of universal healthcare, in which the costs of essential healthcare for all residents are covered by a single public system. Single-payer systems may contract for healthcare services from private organizations or may own and employ healthcare resources and personnel. "Single-payer" describes the mechanism by which healthcare is paid for by a single public authority, not a private authority, nor a mix of both.

<span class="mw-page-title-main">Barefoot doctor</span> 1968–1981 doctor in rural China

Barefoot doctors were healthcare providers who underwent basic medical training and worked in rural villages in China. They included farmers, folk healers, rural healthcare providers, and recent middle or secondary school graduates who received minimal basic medical and paramedical education. Their purpose was to bring healthcare to rural areas where urban-trained doctors would not settle. They promoted basic hygiene, preventive healthcare, and family planning and treated common illnesses. The name comes from southern farmers, who would often work barefoot in the rice paddies, and simultaneously worked as medical practitioners.

<span class="mw-page-title-main">Health care system in Japan</span>

The health care system in Japan provides different types of services, including screening examinations, prenatal care and infectious disease control, with the patient accepting responsibility for 30% of these costs while the government pays the remaining 70%. Payment for personal medical services is offered by a universal health care insurance system that provides relative equality of access, with fees set by a government committee. All residents of Japan are required by the law to have health insurance coverage. People without insurance from employers can participate in a national health insurance program, administered by local governments. Patients are free to select physicians or facilities of their choice and cannot be denied coverage. Hospitals, by law, must be run as non-profits and be managed by physicians.

In China, the practice of medicine is a mixture of government, charitable, and private institutions, while many people rely on traditional medicine. Until reforms in the late twentieth and early twenty-first century, physicians were quasi-government employees and with little freedom in the choice of the hospital to work with. In addition, decades of planned economic policy discouraged physicians from opening their own clinics, and the practice of medicine was generally under the control of local units, such as factories, government, offices, or communes. The reforms created a largely private practice, and physicians now are encouraged to open private clinics and for-profit hospitals.

A public hospital, or government hospital, is a hospital which is government owned and is predominantly funded by the government and operates predominantly off the money that is collected from taxpayers to fund healthcare initiatives. In almost all the developed countries but the United States of America, and in most of the developing countries, this type of hospital provides medical care almost free of charge to patients, covering expenses and wages by government reimbursement.

<span class="mw-page-title-main">Healthcare in Iran</span>

For health issues in Iran see Health in Iran.

The healthcare reform in China refers to the previous and ongoing healthcare system transition in modern China. China's government, specifically the National Health and Family Planning Commission, plays a leading role in these reforms. Reforms focus on establishing public medical insurance systems and enhancing public healthcare providers, the main component in China's healthcare system. In urban and rural areas, three government medical insurance systems—Urban Residents Basic Medical Insurance, Urban Employee Basic Medical Insurance, and the New Rural Co-operative Medical Scheme—cover almost everyone. Various public healthcare facilities, including county or city hospitals, community health centers, and township health centers, were founded to serve diverse needs. Current and future reforms are outlined in Healthy China 2030.

Social welfare in China has undergone various changes throughout history. The Ministry of Human Resources and Social Security is responsible for the social welfare system.

<span class="mw-page-title-main">Healthcare in China</span>

Healthcare in China is primarily provided by state-owned hospitals. Medical insurance is primarily administered by local governments. Over the twentieth century and twenty-first century, using both public and private medical institutions and insurance programs. As of 2020, about 95% of the population has at least basic health insurance coverage.

India has a robust social security legislative framework governing social security, encompassing multiple labour laws and regulations. These laws govern various aspects of social security, particularly focusing on the welfare of the workforce. The primary objective of these measures is to foster sound industrial relations, cultivate a high-quality work environment, ensure legislative compliance, and mitigate risks such as accidents and health concerns. Moreover, social security initiatives aim to safeguard against social risks such as retirement, maternity, healthcare and unemployment while tax-funded social assistance aims to reduce inequalities and poverty. The Directive Principles of State Policy, enshrined in Part IV of the Indian Constitution reflects that India is a welfare state. Food security to all Indians are guaranteed under the National Food Security Act, 2013 where the government provides highly subsidised food grains or a food security allowance to economically vulnerable people. The system has since been universalised with the passing of The Code on Social Security, 2020. These cover most of the Indian population with social protection in various situations in their lives.

<span class="mw-page-title-main">Healthcare in Russia</span>

Healthcare in Russia, or the Russian Federation, is provided by the state through the Federal Compulsory Medical Insurance Fund, and regulated through the Ministry of Health. The Constitution of the Russian Federation has provided all citizens the right to free healthcare since 1993. In 2008, 621,000 doctors and 1.3 million nurses were employed in Russian healthcare. The number of doctors per 10,000 people was 43.8, but only 12.1 in rural areas. The number of general practitioners as a share of the total number of doctors was 1.26 percent. There are about 9.3 beds per thousand population—nearly double the OECD average.

<span class="mw-page-title-main">Healthcare in South Korea</span>

Healthcare in South Korea is universal, although a significant portion of healthcare is privately funded. South Korea's healthcare system is based on the National Health Insurance Service, a public health insurance program run by the Ministry of Health and Welfare to which South Koreans of sufficient income must pay contributions in order to insure themselves and their dependants, and the Medical Aid Program, a social welfare program run by the central government and local governments to insure those unable to pay National Health Insurance contributions. In 2015, South Korea ranked first in the OECD for healthcare access. Satisfaction of healthcare has been consistently among the highest in the world – South Korea was rated as the second most efficient healthcare system by Bloomberg. Health insurance in South Korea is single-payer system. The introduction of health insurance resulted in a significant surge in the utilization of healthcare services. Healthcare providers are overburdened by government taking advantage of them.

<span class="mw-page-title-main">Healthcare in Tanzania</span>

Tanzania has a hierarchical health system which is in tandem with the political-administrative hierarchy. At the bottom, there are the dispensaries found in every village where the village leaders have a direct influence on its running. The health centers are found at ward level and the health center in charge is answerable to the ward leaders. At the district, there is a district hospital and at the regional level a regional referral hospital. The tertiary level is usually the zone hospitals and at a national level, there is the national hospital. There are also some specialized hospitals that do not fit directly into this hierarchy and therefore are directly linked to the ministry of health.

<span class="mw-page-title-main">Health care systems by country</span>

Examples of health care systems of the world, sorted by continent, are as follows.

Government-guaranteed health care for all citizens of a country, often called universal health care, is a broad concept that has been implemented in several ways. The common denominator for all such programs is some form of government action aimed at broadly extending access to health care and setting minimum standards. Most implement universal health care through legislation, regulation, and taxation. Legislation and regulation direct what care must be provided, to whom, and on what basis.

<span class="mw-page-title-main">Healthcare in India</span>

India has a multi-payer universal health care model that is paid for by a combination of public and government regulated private health insurances along with the element of almost entirely tax-funded public hospitals. The public hospital system is essentially free for all Indian residents except for small, often symbolic co-payments in some services. Economic Survey 2022-23 highlighted that the Central and State Governments’ budgeted expenditure on the health sector reached 2.1% of GDP in FY23 and 2.2% in FY22, against 1.6% in FY21. India ranks 78th and has one of the lowest healthcare spending as a percent of GDP. It ranks 77th on the list of countries by total health expenditure per capita.

References

  1. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Lin, Shuanglin (2022). China's Public Finance: Reforms, Challenges, and Options. New York, NY: Cambridge University Press. doi:10.1017/9781009099028. ISBN   978-1-009-09902-8.
  2. ↑ Pan, Xiong-Fei; Xu, Jin; Meng, Qingyue (2016). "Integrating social health insurance systems in China". The Lancet. 387 (10025): 1274–1275. doi: 10.1016/s0140-6736(16)30021-6 . PMID   27025430.
  3. ↑ Bernardi, Andrea; Greenwood, Anna (2014-07-03). "Old and new Rural Co-operative Medical Scheme in China: the usefulness of a historical comparative perspective" (PDF). Asia Pacific Business Review. 20 (3): 356–378. doi:10.1080/13602381.2014.922820. ISSN   1360-2381. S2CID   153656512.
  4. ↑ Dib, Hassan H., Pan, Xilong, and Zhang, Han. (2008). Evaluation of the new rural cooperative medical system in China: is it working or not? International Journal for Equity of Health, 7–17.
  5. 1 2 Meng, Qingyue; Xu, Ke (2014). "Progress and challenges of the rural cooperative medical scheme in China". Bulletin of the World Health Organization. 92 (6): 447–451. doi:10.2471/blt.13.131532 (inactive 5 December 2024). PMC   4047801 . PMID   24940019.{{cite journal}}: CS1 maint: DOI inactive as of December 2024 (link)
  6. ↑ Ministry of Health, China State Council (2008). China Health Statistic Yearbook 2008. Beijing: Peking Union Medical College Press. ISBN   9787811360578. OCLC   276910548.
  7. ↑ Wagstaff, Adam, Magnus, Jun, Gao, Ling, Xu, and Juncheng, Qian. (2009). Extending health insurance to the rural population: An impact evaluation of China's new cooperative medical scheme. Journal of Health Economics, 1, 1–19
  8. ↑ Yang, Wei; Wu, Xun (2017-03-01). "Providing Comprehensive Health Insurance Coverage in Rural China: a Critical Appraisal of the New Cooperative Medical Scheme and Ways Forward". Global Policy. 8: 110–116. doi: 10.1111/1758-5899.12209 . ISSN   1758-5899.
  9. 1 2 State Council, Health and Family Planning Committee (2017). China Health and Family Planning Statistical Yearbook 2016. Beijing: Peking Union Medical College Press. p. 329. ISBN   9787567906433.
  10. 1 2 3 Barber, Sarah L.; Yao, Lan (2011-10-01). "Development and status of health insurance systems in China". The International Journal of Health Planning and Management. 26 (4): 339–356. doi:10.1002/hpm.1109. ISSN   1099-1751. PMID   22095892.
  11. ↑ Liu, Yuanli; Hu, Shanlian; Fu, Wei; Hsiao, William C. (December 1996). "Is community financing necessary and feasible for rural China?". Health Policy. 38 (3): 155–171. doi:10.1016/0168-8510(96)00856-1. PMID   10162419.
  12. ↑ Sun, Xiaoyun; Jackson, Sukhan; Carmichael, Gordon A.; Sleigh, Adrian C. (2009). "Prescribing behaviour of village doctors under China's New Cooperative Medical Scheme". Social Science & Medicine. 68 (10): 1775–1779. doi:10.1016/j.socscimed.2009.02.043. hdl: 1885/32880 . PMID   19342138. S2CID   2844047.
  13. ↑ Bogg, Lennart; Huang, Kun; Long, Qian; Shen, Yuan; Hemminki, Elina (2010). "Dramatic increase of Cesarean deliveries in the midst of health reforms in rural China". Social Science & Medicine. 70 (10): 1544–1549. doi:10.1016/j.socscimed.2010.01.026. PMID   20219278.
  14. ↑ Cheng, Lingguo (2012). "NRCMS: Economic Effects or Health Effects?". Economic Research Journal. 01: 120–133 – via CNKI.
  15. ↑ Fang, Liming (2006). "Breaking Voluntary Puzzles: Incentives and sustainable development in NRCMS". China Rural Survey. 4: 24–32+79 – via CNKI.
  16. ↑ China State Council, Ministry of Health (March 5, 1997). "Decision on Healthcare Reform and Development".
  17. ↑ China, State Council (1998). "Decision on establishing Urban Employee Basic Medical Insurance". gov.cn.
  18. ↑ State Council, China (2007). "Guidelines on Urban Residents Basic Medical Insurance Pilots". gov.cn.
  19. ↑ "Enrollment Rate for Three Basic Medical Insurance was More than 95% in 2014". cnr.cn.
  20. ↑ Pan, Jie (2013). "Is Medical Insurance Improving Health? Empirical analysis based on URBMI". Economic Research Journal. 4– via CNKI.
  21. ↑ Liu, Hong; Zhao, Zhong (2014). "Does health insurance matter? Evidence from China's urban resident basic medical insurance". Journal of Comparative Economics. 42 (4): 1007–1020. doi:10.1016/j.jce.2014.02.003.
  22. ↑ Lin, Wanchuan; Liu, Gordon G.; Chen, Gang (2009-07-01). "The Urban Resident Basic Medical Insurance: a landmark reform towards universal coverage in China". Health Economics. 18 (S2): S83–S96. doi:10.1002/hec.1500. ISSN   1099-1050. PMID   19551750.
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