The World Bank's assistance to China's health sector

32903 THE WORLD BANK OPERATIONS EVALUATION DEPARTMENT The World Bank's Assistance to China's Health Sector Elaine Wee-Ling Ooi Director-General, Operations Evaluation: Gregory K. Ingram Director: Ajay Chhibber Manager: R. Kyle Peters Task Manager: Gene Tidrick This paper is available upon request from OED. It was prepared in 2002 2005 as a background paper for the China Country Assistance Evaluation. The World Bank Washington, D.C.  ENHANCING DEVELOPMENT EFFECTIVENESS THROUGH EXCELLENCE AND INDEPENDENCE IN EVALUATION The Operations Evaluation Department (OED) is an independent unit within the World Bank; it reports directly to the Bank's Board of Executive Directors. OED assesses what works, and what does not; how a borrower plans to run and maintain a project; and the lasting contribution of the Bank to a country's overall development. The goals of evaluation are to learn from experience, to provide an objective basis for assessing the results of the Bank's work, and to provide accountability in the achievement of its objectives. It also improves Bank work by identifying and disseminating the lessons learned from experience and by framing recommendations drawn from evaluation findings. OED Working Papers are an informal series to disseminate the findings of work in progress to encourage the exchange of ideas about development effectiveness through evaluation. The findings, interpretations, and conclusions expressed here are those of the author(s) and do not necessarily reflect the views of the Board of Executive Directors of the World Bank or the governments they represent. The World Bank cannot guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply on the part of the World Bank any judgment of the legal status of any territory or the endorsement or acceptance of such boundaries. Contact: Operations Evaluation Department Knowledge and Evaluation Capacity Development (OEDKE) e-mail: eline@worldbank.org Telephone: 202-458-4497 Facsimile: 202-522-3125 http:/www.worldbank.org/oed  Acronyms AIDS Acquired Immune Deficiency Syndrome CAPM Chinese Academy for Preventive Medicine CAS Country Assistance Strategy CAE Country Assistance Evaluation CMS Cooperative Medical System DFID Department for International Development, United Kingdom DOTS Directly Observed Treatment, Short-Course ESW Economic and Sector Work HIV Human Immunodeficiency Virus HNP Health, Nutrition, and Population IBRD International Bank for Reconstruction and Development IDA International Development Association IEC Information, Education and Communication IMR Infant Mortality Rate MCH Maternal and Child Health MDR Multidrug-resistance MIS Management Information System MMR Maternal Mortality Ratio MOF Ministry of Finance MOH Ministry of Health NCD Noninfectious Chronic Diseases NTP National Tuberculosis Control Program OED Operations Evaluation Department, World Bank. PER Public Expenditure Review PPAR Project Performance Assessment Report SDPC State Development and Planning Commission SOE State Owned Enterprise SPS Senior Policy Seminars STD Sexually Transmitted Disease TB Tuberculosis TCM Traditional Chinese Medicine U5MR Under Five Mortality Rate UNICEF United Nations Children's Fund WBI World Bank Institute WHO World Health Organization   Contents 1. Overview................................................................................................................................1 2. A Profile of China's Health Sector........................................................................................2 Health Finance Issues ......................................................................................................3 Impact of Other Sectors on Health Policy and Finance...................................................4 The Contradictions of Cost Recovery..............................................................................5 Disincentives and Inappropriate Health Practices ...........................................................5 3. The World Bank's Program in China ....................................................................................7 Analytical Work...............................................................................................................11 Country-Level Dialogue ..................................................................................................12 Partnerships......................................................................................................................13 4. Lessons Learned: Strengths and Weaknesses.......................................................................14 Strengths ..........................................................................................................................14 Weaknesses......................................................................................................................15 5. Conclusions and Recommendations ......................................................................................16 Boxes 2.1 State Health Service Delivery Systems...................................................................................3 2.2 Tuberculosis............................................................................................................................6 Tables 2.1 Public Expenditure on Health as a Percentage of Total Health Expenditures in Selected Countries...............................................................4 3.1 Health/Social Services Percentage of Total Lending in Selected Countries ..........................8 3.2 China Health Project...............................................................................................................9   1 1. Overview 1.1 For its level of socioeconomic development, China has widely been perceived as a country with an enviable record in public health. While this was true through the 1980s, the country's recent transition to a socialist market economy and its concurrent decentralization policies have resulted in system breakdowns and contradictions that have negatively affected health outcomes, particularly among the poor and in economically lagging and rural areas. The national government now supports only 3 percent of health expenditures and has handed over funding responsibility for health care to the sub-national levels, many of which cannot afford it. 1.2 At the same time, the move to market mechanisms has not been accompanied by adequate regulation. Ironically, price regulations, lack of subsidies, and financial constraints, particularly at the provider level, make basic healthcare uneconomical. Providers pursue inappropriate health practices that extend to public health services, system supervision, and referral. The era of the legendary and effective barefoot doctors has been replaced by one of profiteering in an unregulated rush to provide expensive procedures and impractical regimens of prescriptions to people who can't afford them and often don't need them. China's focus on cost- recovery further hampers efforts to reestablish effective public health services where they are most needed (an issue of competing bureaucratic values which has the health ministry at an extreme disadvantage). And there is a significant imbalance between health care in urban versus rural areas, and between workers who are insured, especially government workers, and those who are not. 1.3 Recently, there are encouraging signs that health has become an important priority in the government's agenda, bringing multiple government agencies into a more cooperative relationship, and providing the Bank greater opportunity to engage the country in policy dialogues to more effectively in improve health outcomes and financing in a more equitable and sustainable way.  2 2. A Profile of China's Health Sector 2.1 China's gross health and nutrition indicators have always been impressive. The country is ranked 61 out of 191 countries in overall quality of health by the WHO report of 2000. From the 1950s through the 1970s, China achieved unprecedented gains in reduction of IMR, U5MR, child malnutrition and life expectancy, due to major improvements in broad public health measures including the draining of swamps, eradication of pests, improved nutrition, water supplies, hygiene, sanitation and near universal access to basic health services. In the last 2 decades as the country adopted wide ranging economic reforms, growth and prosperity continue to pull up its health and nutrition indicators, but wide regional variations and rural/urban differences have appeared, as inequalities in development and access to care have grown.1 2.2 Disaggregated data show that gains in combating infectious diseases have slowed and in some areas regressed. The rate of immunization has gone down2 and there have been unexpected outbreaks of immunizable diseases. IMR has leveled out at 32 deaths per 1000 while a Study of 3 30 Poor Counties in 1996 showed an increase in median IMR from 50 to 72 deaths per 1000 in the late 1970s to late 1980s. Under 5MR, which had been declining in excess of 6 percent per year during 1960s to 1980s, slowed in 1983 and actually increased slightly from 1985-90. Surveys in 9 provinces also showed that the percentage of malnourished children (height for age) increased in rural areas between 1987-1992, while urban malnutrition dropped sharply in the same period. 2.3 Meanwhile, TB and HIV/AIDS infection rates have grown exponentially. For both diseases, China is a country of global strategic importance. More Chinese die from TB than from any other single source of disease. Current official estimates for HIV are between 850,000 to 1,000,000 cases while reported cases of STDs are 859,000 (unofficial estimates are significantly higher). Both HIV/AIDS and TB infect people during their most productive years. 2.4 Noninfectious chronic diseases (NCDs), injuries and suicides have been the leading causes of death since 1980, accounting for 72 percent of all mortality. In 1986, China had a chronic disease mortality burden (adjusted for age) similar to that of the US. By1990, the annual probability of death from an infectious disease for an adult in China was just over 1 percent. 2.5 At times data itself can be misleading. The number of physicians per 100,000 population in China is estimated at 162 against India's 48, but only a small proportion of rural "doctors" in China have actually been to college. Waste and inefficiency characterize many of China's multiple systems of health services delivery. Funding of public sector facilities is based on numbers of beds, encouraging their "increase " by facility managers to tap national allocations, regardless of need. The uninsured majority cannot afford the comparatively high costs of care 1Government data report IMR in 1999 at 11 per 1,000 live births in Jiangsu and 50.5 per 1,000 in Guizhou. Similarly national MMR was reported at 56 per 100,000, with 25 per 100,000 in Guangdong and close to 450 per 100,000 in Xinjiang. 2In 1993, measles coverage of 53 percent and 49 percent in rural Guizhou and Shanxi respectively were no better than coverage rates in sub-Saharan countries. National coverage rate for China was 85 percent 3Sri Lanka, a country in conflict for 18 years at a time when China enjoyed growth rates of 7 percent, has an IMR of 16 per 1000, half that of China's  3 charged at these facilities, compounding the tragedy that scarce resources are spent on underutilized facilities to which the poor do not have access. Box 2.1: State Health Service Delivery Systems There are 3 different state sponsored health service systems: