China Health Policy Report

Is "The Sick Man of Asia" really sick?

August 23, 2012
Enis Baris

The following commentary is in response to the article, The Sick Man of Asia: China’s health crisis by Yanzhong Huang, originally published in the November/December 2011 issue of “Foreign Affairs”.  The authors, Shenglan Tang of Duke and Enis Baris of the World Bank, presented an abbreviated version of this commentary in the March/April 2012 issue of "Foreign Affairs". 

NOTE:  Enis Baris will be speaking at the Duke Global Health Institute on August 29 at 12 pm in Trent Hall Room 040. Click here for details.  

In "The Sick Man of Asia: China's Health Crisis" (Foreign Affairs, November/December 2011), Dr Huang Yanzhong argues that China neglected public health in its relentless pursuit for economic development, resulting in a sicker citizenry whose ever increasing needs for health care are already undermining its health care system, and may well do the same to its social, economic and even political order. While we agree with the author's overall assessment of the health and health care challenges in China, and the delay in addressing inequities in health and access to health care since its economic reform launched in the late 1970s, we would argue that the current situation is not as desperate as the author leads the reader to believe.

Over the last four decades, China has undergone a profound and rapid demographic, epidemiologic and socioeconomic transition which would have tested the strength of, and possibly overwhelm, any health care system. A rapidly aging population, exacerbated by the one child policy, coupled with lack of timely investment in disease prevention and health promotion has increased the prevalence of NCDs, bringing about excess premature adult morbidity, disability and mortality and resulting in slower than expected increase in life expectancy.

However, significant investment in maternal and child health and infectious disease control made during the same time span resulted in very rapid and sharp reductions in maternal and under-five mortality, as well as reduction in prevalence and mortality rates of infectious diseases. According to the most recent report by the UN Inter-agency Group "Levels and Trends in Child Mortality" published in 2011, the infant mortality rate (IMR) in China decreased from 38 per 1,000 live births in 1990 down to 16 per 1,000 live births in 2010, so did the under-five mortality rate from 48 to 18 per 1,000 live births. Using the same comparators, China’s average annual rate of reduction over this 20 year time period is similar to that of Malaysia and Mexico and quicker than that of Colombia. The maternal mortality ratio per 100 0000 live births also came down  from 110 in 1990 to 38 in 2008, according to WHO.  In addition, the 2010 estimated national prevalence rate of bacteriologically confirmed Tuberculosis cases in China was 216 per 100,000,  a reduction of  45% from the  2000 rate, as a result of a very effective TB control program. China was also the first country in the world to eradicate Filariasis in 2008.

Another point that we would dispute is the author’s quick and rather shallow reference to ongoing health reforms in China, launched in 2009 after the SARS epidemic. In recent years the government of China has clearly recognized the challenges that the ever increasing NCD prevalence pose to the healthcare system and launched a very comprehensive health sector reform standing atop of five pillars: 1) expanding health insurance to achieve universal health coverage by 2020; 2) developing a national essential drug system to improve quality of care and reduce misuse, abuse and costs; 3) improving primary care delivery to strengthen gate keeping, referral system and reduce inefficiencies; 4) promoting equity in the provision of essential public health services; and 5) reforming public hospitals.

The reform agenda was set after an open, thorough and pluralistic consultation process involving several governmental entities, namely the Ministry of Health and the National Development Reform Commission; CSOs and the academia, namely the Development Research Center, Peking University and Fudan University; and several international partners (e.g., WHO, World Bank) and private consulting firms, inviting them all to submit proposals on how China's health systems should be reformed. In May 2007, an international conference was organized to allow all the invitees to present their visions and proposals on China's future health systems. Several leading international experts on health systems development were also invited to act as discussants and reviewers on these presentations. Following the conference, a working team under the auspices of the ministerial level leading group developed the government's own health reform plan, which was later placed on the website of the NDRC for review for public scrutiny and feedback in early 2009. This was probably the first time in the history of the People’s Republic of China that the Chinese public was invited to comment on a document of government policy.

Hundreds of thousands of comments and suggestions were received after a one-month open consultation, upon which the health system reform plan was finalized and approved by the State Council at the end of 2009.  As for the buy-in and implementation at the sub-national levels, the central government opted for a mixture of “carrot and stick”, or a set of loosely defined policies and guidelines to be customized at the lower levels and coupled with financial incentives, rather than issuing top down tight regulatory decrees and ordinances, with the primary aim of reducing existing inequalities in access to health care. While China is nowhere close to reaching its health and health care policy objectives in the very near future, it has already laid the groundwork for a more prominent role of the State in developing and sustaining universal health coverage and improving equity in health and health care by 2020, key steps in the right direction that the author has failed to fully recognize and acknowledge.  Already in 2003, the government of China had re-established the rural cooperative medical scheme (RCMS), which covered 834 million Chinese by 2010. The Urban Employee Basic Health Insurance and Urban Resident Employee Basic Health Insurance cover another 429 million people.

While one could have questioned the extent of the depth and scope of the benefit packages, and the variation across various plans, significant improvement has occurred to reduce inequalities and harmonize benefits over the last eight years. The author also erroneously claims that the central government subsidy of RMB 120 per capita (to RCMS) accounting for “only 8.6% of total health-care expenditures per capita for rural population.” The amount was quite significant, accounting for more than 20% of the total health expenditure per capita in 2009 in rural China, or RMB 561, according to the national health accounts. Besides the subsidy to RCMS, the central and local governments have also allocated funds to health facilities to cover the partial cost of providing clinical and public health services, indeed acknowledged by the author. The real fact is that China's out of pocket payment, as percentage of total health expenditure, came down from over 50% in the1990s and early 2000s to 37.5% in 2009, a rather low percentage, compared with that of countries of similar level of economic development . A more recent national household health survey undertaken by the Center of Health Statistics and Information of China also reported that inpatient reimbursement rates increased by more than three-fold on average, and by 7.5 times in rural areas, from 2003 to 2011, reducing significantly self-imposed discharge from hospitals due to financial concerns from 27.6% in 2003 down to 9.7% in 2011.

All this being said, we acknowledge that the governance of the health care system in China has been a major concern, but would posit that actually it was more a matter of ineffectual leadership/stewardship by the central government, rather than a matter of poor governance per se behind the delay in instituting effective policies to expand coverage and tackle the growing NCD burden.  This does not appear to be the case any longer, as the government of China has now assumed its leadership responsibility for healthier development with a sound strategy and a roadmap for achieving universal health coverage, and implementing effective programs to prevent disease and promote health. We welcome your comments.