China's health sector - why reform is needed

33232 Rural Health in China: Briefing Notes Series China's Health Sector--Why Reform is Needed Goals and performance This Briefing Note is part of a broader series of Notes. It is intended to be an overview of the Health systems exist ultimately to improve challenges facing the sector, and makes the case population health through the timely provision that reform is required. It does not make specific of appropriate health care. The care must, of reform proposals, which will be the task of course, also be affordable--in part because future Notes. otherwise people will be deterred from seeking care, but also because the pursuit of health cannot be at any price. Good health is desirable, Historic and recent performance on but has to be balanced against other important health outcomes goals, such as better nutrition, shelter, education, and so on. Ideally, therefore, the cost of health care at the point of use will be low enough to Tracking health system performance in terms of enable households to restore their health and health outcomes is hampered by a shortage of achieve some or all of these other goals--the so- data that are comparable across countries and called `financial protection' goal of health over time. Child mortality is one indicator that systems. is widely available, and is widely accepted as a useful summary population health statistic. This Briefing Note* argues that while in the 1960s and 1970s China performed well on both In the 1960s and 1970s, China achieved annual health system objectives, in the 1980s it faltered, reductions in under-five mortality in excess of and in the 1990s it slipped still further. China's 6%, well above the rates achieved by Indonesia increasingly weak performance is argued to and Malaysia, and well above the rates expected reflect system-wide weaknesses in the health of a country with the per capita income China system. The cost of care has grown rapidly in had at the time (Figure 1). recent years, deterring use of health services, and putting households who do use services at Figure 1: China's recent history on child financial risk. The rise in the cost of care has mortality reduction in perspective coincided with falling health insurance coverage: Malaysia Indonesia China health insurance has all but disappeared in rural areas, and is under a good deal of strain in urban 60s 80s 70s 90s 60s 80s 0% areas. The way providers are paid encourages the provision of overly expensive care and -1% discourages cost-consciousness. And the .a.p -2% government is insufficiently engaged in areas -3% where markets are known to perform badly. ytialtro -4% m -5% *This briefing note was prepared by World Bank staff, and nieg an -6% is based loosely on an issues note prepared by Magnus ch Lindel