China - Long term issues and options in the health transition (Vol. 1 of 2)

Report No. 7965-CHA China Long-Term Issues and Options in the Health Transition (In Two Volumes) Volume 1: The Main Report June 25, 1990 Environment, Human Resources and Urban Development Division Asia Country Department III FOR OFFICIAL USE ONLY Document o'f the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIViLENTS US$1.00 - Yuan (Y) 4.71 Y 1 - US$0.21 (as of June, 1990) FISCAL YEAR January 1 to December 31 ABBREVIATIONS AES - Anti-Epidemic Station AIDS - Acquired Immune Deficiency Syndrome CAPM - Chinese Academy of Preventive Medicine CHD - Coronary Heart Disease COPD - Chronic Obstructive Pulmonary Disease CT - Computer Tomography DSP - Disease Surveillance Point EPI - Expanded Program of Immunization GDP - Gross Domestic Product GIS - Government (civil service) Insurance System HBV - Hepatitis B Virus IDDM - Insulin Dependent Diabetes Mellitus IMR - Infant Mortality Rate LIS - Labor Insurance System LOS - Length of Stay MAC - Maximum Allowable Concentration MCH - Maternal and Child Health MMHg - Millimeters of Mercury MOF - Ministry of Finance MOPH - Ministry of Public Health NAEM - National Association of Emergency Medicine .;EPA - National Environmental Protection Agency NCD - Non-Communicable Disease NIDDM - Non-Insulin Depended Diabeter Mellitus NMTAC - National Medical Technology Assessment Council OECD - Organization for Economic Cooperation and Development PHCC - Patriotic Health Campaign Committee PLA - People's Liberation Army RDA - REcommended Daily Allowance QALY - Quality Adjusted Life Year SEdC - State Education Commission SPC - State Planning Commission SPAC - State Pharmaceutical Administration of China STCMA - State Traditional Chinese Medicine Association TB - Tuberculosis TCM - Traditional Chinese Medicine UNICEF - United Nations International Children's Emergency Fund WHO - World Health Organization YPLL - Years of Potential Life Lost  FOR OMCIAL USE ONLY Preface 1. This report is about China's health status now and over the next 40 years. It covers a complex set of demographic, epidemiological, behavioral and economic factors which affect the provision of health care as China moves toward the 21st century. The forces invelved will shape future social debate and public response to health needs. These forces will also determine the amount, characteristics and distribution of illnesses in China. Our understanding of these forces, their short and long-term implications and policies to direct or moderate them remains imperfect. But the broad directions of the health transition are now emerging clearly enough to require attention by Government. Many aspects of the health transition and these issues discussed in the report will also be relevant for other developing countries. 2. Today in most parts of China, and in much of the developing world, about 96% of all babi_z will live to be age 1. Of these infants more than 95% will survive to be 5 and more than 90% of these children will enter adulthood and live to at least middle age. The premature death of those children who are not among the fortunate majority continue, rightly, to be the subject of national and international interventions. The premature death and often substantial morbidity and disability of the majority of adults are often ignored, assumed to be inevitable, or the consequence of "fate". Many "public" health programs concentrate on the needs of the first five years (<10%) of an average life today. Health needs for the remaining 90% of life for most people are left primarily to market forces, personal wealth and good fortune. Even public expenditures for illness care in adulthood are mainly for treatment or palliation of illnesses which occur premsturely. These patterns of expenditure, coupled with the forces inherent in the health transition contain the nucleus of forces which threaten to cause consumers, providers and financiers of health services to respond in ways which may only polarize and exacerbate access to health care at all ages. Without better understanding of the forces at work, "we risk an unacceptable paradox: instead of being an instrument for equity, health services may serve to increase social inequity" resulting in a deterioration of health for many at the benefit of a few.) 3. The health transition is already well advanced in most parts of China. In these areas, an-y of the most important health priorities that now remain involve the control of chronic diseases in middle and old age. This report is intended to help China deal with the effects of the health transition and developing an affordable health care strategy for the comin& iecades. it Frenk, J; Bobadilla J.L.; Sepulveda J.; Lopez Cervantes M,. Health transition ill middle-income countries: New challenges for health care. Health Policy Planning, 1989, 4/1 (29-39). This document has a restricted distribution and may be used by recipients only in the performance I of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - 4. The report reflects the work and thinking of many Chinese scientists and health care leaders who have been inivolved in developing the content of the report and commenting on the Bank's preliminary understanding of problems and issues. Their wisdom and contributions are gratefully acknowledged. The next step toward a national and regional consensus on health strategy and details of approach, necessarily must be taken by them. 5. The international community has also contributed to the report. The Centers for Disease Control in the United States has been particularly helpful. Scientists and leading health authorities from Australia, the United Kingdom, Canada, and the United States, have generously contributed their advice and experience. Although it is not possible to acknowledge them all individually, their encouragement and willing contribution is deeply appreciated. 6. The main Bank mission was led by J. Richard Bumgarner, who is the primary author of the report. Zafer Ecevit structured the early work on this study, led the first mission and provided continuing guidance in development of the report. H. Dennis Tolley, Ph. D., Brigham Young University (U.S.), has constructed the computerized projection model on which future epidemiological scenarios are based. Prof. J.E. Blanpain, M.D., Leuven University Medical School (Belgium), contributed to the core draft for the hospital management chapter; David Banta, M.D., health policy consultant (The Netherlands), provided the assessment of medical technology in China and the vignettes on cost effectiveness of leading technologies. Thomas Hall, M.D. University of San Francisco (U.S.), tackled che complex topic of China's health manpower and its future development needs. Howard Barnum of the World Ban-k contributed to cancer epidemiology, and the report's conceptual approach. Robert Kane, M.D., University of Minnesota, Nicholas Prescott, and Dennis Mahar of the World Bank participated in early missions to China during which the report's concept, approach and data needs were defined. Chiraporn Chotikabukkana, World Bank, helped with charts and tables presented in this report. Stephanie Gerard trimmed the lengthy first draft into a readable report. Guia Bunoan, Susan Brown, Maria Dimatulac, Socorro Manila and Linda Mih assisted in its processing. The report is in two volumes, a Main Report and a detailed Annex Volume, each with nine chapters. 7. The Ministry of Public Health leadership and staff contributed actively and thoughtfully at all stages. Their support, insights and encouragement made this report possible. Environment, Human Resources and Urban Operations Division China Department June 25, 1990  CHIN LONG-TERM ISSUES AND OPTIONS IN THE HEALTH TRANSITION Table of Contents ,EXECUTIVE SUMMARY . . . . . . . . . . . . . . . .i 1. OVERVIEW OF MORTALITY AND ILLNESS IN CHINA . . . . . . . . . .1 A. Introduction .1... . . . . . . . . . . . . . . . . . . B. Demographic Trends .... . . . . . . . . . . . . . . . 3 C. Mortality ..... . . . . . . . . . . . . . . . . . . . 6 D. Motbidity and Health Priorities . . . . . . . . . . . . . 9 E. Distribution of the Present Health Burden . . . . . . . . 12 F. Disease Surveillance and Broad Health Strategy ... . . 13 2. THE CHRONIC DISEA'ES . . . . . . . . . . . . . . . . . . . . . 16 A. Circulatory Disease .16 B. Epidemiology and Trends .18 C. Cardio-pulmonary Disease .22 D. Cancer in China .24 E. Other Cancers .27 F. Diabetes .28 G. Other Chronic Diseases .29 H. Injuries, Suicides and Other External Causes of Death . . 30 3. RISK FACTORS IN CHINA .32 A. Smoking . . 32 B. Hypertension . . . . . . . . . . . . . . . . . . . . . . 36 C. Dietary Animal Fat .37 D. Environmental Factors .38 E. Viruses and Bacterial Infections . . . . . . . . . . . .40 4. FUTURE TRENDS IN CHINA'S HEALTH . . . . . . . . . . . . . . . 42 A. Future Impact of a Preventive Strategy ......... . 43 B. Dynamics of a Preventive Strategy . . . . . . . . . . . . 47 C. Implications of the Health Transition for Future Health Care Costs .............. . 49 5. PROSPECTS AND POLICIES FOR CHRONIC DISEASE MANAGENENT . . . . 55 A. The Future of Public Health - Institutions and Roles. . . 55 B. A Framework for Chronic Disease Management . . . . . . . .59 C. Reduction of Exposure to Risk - Specific Strategies . . . 63  - ii - 6. HEALTH SERVICE INSTITUTIONS. PLANNING AND MANAGEMENT IN REIATION TO CHRONIC DISEASE ..... . . .. . . . . . . . . 69 A. Hospital Resources . . . . . . . . . . . . . . . . . . . .70 B. Hospital Planning . . . . . . . . . . . . . . . . . . . . 79 C. Hospital Management Principles for Future Strategy . . . 81 7. MEDICAL TECHNOLOGIES IN CHINA ..... ...... . . . . . 83 A. Medical Technologies in China. . . . . . . . . . . . . . .83 B. Toward a Medical Technology Assessment Policy . . . . . . 86 8. HEALTH MANPOWER: RESOURCES. NEEDS AND PRIORITIES . . . . . . 91 A. Manpower Training ................... . 91 B. Manpower Deployment, Recruitment, and Retention . . . . . 96 C. Perspectives for the Future . . . . . . . . . . . . . . 101 9. HEALTH SECTOR EXPENDITURES AND FINANCES . . . . . . . . . . 105 A. The Health Financing System . . . . . . . . . . . . . . 107 B. Sources of Health Financing . . . . . . . . . . . . . . 108 C. Levels, Trends and Comparisons in Health Spending . llC- D. The Changing Shares ..... . ....... .. . . . 116 E. Relative Growth of Health Expenditures . . . . . . . . 116 F. Changing Purposes of Health Expenditures . . . . . . . 118 G. Factors Underlying the Changing Purposes of Health Spending . . . . . . . . . . . . . . . . . . . . 122 H. The Effects of Decentralization in a Partially Reformed Economic Environment . . . . . . . . . . . . . 126 I. Key Future Issues and Options in Health Care Finance . 127  - iii- TABLES IN TEXT 1.1 Selected National Comparators . . . . . . . . . . . . . . 8 1.2 Distribution of Causes of Death . . . . . . . . . . . . . 9 1.3 Distribution of Communicable Diseases as Causes of Death .................... . 10 1.4 Selected Endemic Diseases ............... . 10 1.5 Distribution of Chronic Disease as Causes of Death . . .13 2.1 Leading Cancers . . . . . . . . . . . . . . . . . . . . . 24 3.1 Smoking Distribution . . . . . . . . . . . . . . . . . . 33 3.2 Tobacco Exposure of China's Population . . . . . . . . . 34 4.1 Population Projections - Selected Age Groups . . . . . . 44 4.2 Main Demographic Effects of a Preventive Strategy . . . . 45 6.1 Number of Visits to O.P.D. and Emergency Departments, 1986 . . . . . . . . . . . . . . . . . . . . 71 6.2 Hospital Beds Per 1000 Persons in Cities . . . . . . . . 72 6.3 Specialized Hospitals in China . . . . . . . . . . . . . 73 6.4 10 Leading Diseases as % of Hospital Admis-ions . . . .73 6.5 LOS in OECD Countries, in Shanghai 1st and 8th People's Hospital and in No. 1 Attached Hospital, Beijing Medical University .... . . .... i . . . . . . . 76 6.6 Nosocomial Infection in 21 Hospitals in China . . . . . . 77 8.1 Graduates of Secondary Health Schools by Specialty .... . . . . . ....... . . . . . . . . 93 8.2 Medical Colleges, 1977-1981: Institutions, Students, Enrollments and Graduates . . . . . . . . . . . 94 8.3 Medical Colleges - Estimates of Manpower Supply . . . . . 95 8.4 Number of Hospital Beds and Health Personnel, by Type and level (1949-1986) . . . . . . . . . . . . . . 98 8.5 Summary Projections to 2025 of Resources, Services and Personnel ... ............... . 102 9.1 Estimated Health Sector Expenditures . . . . . . . . . 109 9.2 Health Expenditures - Approximate Annual Growth Rates, 1980-88 . . . . . . . . . . . . . . . . . . . . 111 9.3 Health Expenditure Ratios . . . . . . . . . . . . . . . 113 BOXES IN TEXT 1.1 The Health Transition . . . . . . . . . . . . . 4 1.2 The Disease Surveillance Systems and Epidemiological Data in China ..................... . 11 5.1 Elements of a National Tobacco Control Program . . . . . 65 7.1 Technology - Themes for Consideration . . . . . . . . . . 87 7.2 Why Lung Cancer Screening May Not be Cost Effective for China .... . . . . . ...... . . . . . . . . . 89 9.1 Comparisons with Other Countries - Financial Issues and Alternative Approaches . . . . . . . . . . . 114 9.2 Cost Escalation - Behavioral Patterns of Health Workers and Institutions . . . . . . . . . . . . . . . 121 9.3 Incentives Which Inflate Health Care Costs . . . . . . 128  - iv - CHARTS IN TEXT 1.1 Survival Probability by Age . . . . . . . . . . . . . . . 6 1.2 China Dependency Ratios, 1985-2025 . . . . . . . . . . . 7 1.3 Major Causes of Death, China and U.S. . . . . . . . . . . 15 2.1 China: Mortality Rates and Shares . . . . . . . . . . . . 16 2.2 Circulatory Disease Deaths by Cause, Age and Sex . . . . 17 2.3 China: Stroke Deaths and Rates by Age Group, Sex and Location, 1986 .................. . 19 2.4 Coronary Heart Disease Deaths and Rates by Age Group, Sex and Location, 1986 ... . . . . . . . . . . . . . 21 2.5 Hypertensive Heart Disease Deaths and Rates by Age Group, Sex and Location, 1986 . . . . . . . . . . . . 21 2.6 China: COPD Deaths and Rates by Age Group, Sex and Location, 1986 ... . . . . . . . . . . . . . . . . 22 4.1 China: Population Profile by Age and Time . . . . . . . . 44 4.2 Probable Growth Range for Heal.th Expenditures as a Share of GDP/Capita .... . . . . . . . . . . . . . . . . . 52 9.1 Health Expenditures, Current Prices . . . . . . . . . . 112 9.2 Recurrent Health Expenditures, by Source . . . . . . . 117 9.3 Changes in Health Budgets, Health Expenditure and GDP, 1970-88 ..................... . 119  Exective Summaly China: Issues and Options in the Health Transition 1. The future health of China's people will depend largely on public policies to improve health in an economically efficient, equitable manner. As a result of inexorable demcgraphic and epidemiological changes a health transition is occurring in China (Box 1.1). The chronic, non-com- municable diseases have become the main cause of premature adult morbidity and mortality. The response of the health care system and of broader public policies to the demands originating in the health transition will determine the amount, characteristics and distribution of future illnesses. Health care spending will inevitably grow, but the rate of its growth, and, more important, the distribution of benefits, will be determined by Government policies. Budgetary, planning, fiscal, public health, environmental, regulatory, educational and manpower policies can influence the course of the transition, improve efficiency of health services and help to maintain social equity. This report reviews the main interacting demographic, epidemiological, behavioral and economik factors which affect health status and the provision of health care in China. It concludes that the magnitude of the health transition, the important policy options and the areas requiring further study are now emerging clearly enough to allow informed decisions by the Government. 2. Past Progress. Family planning, childhood immunization, accessible primary health care (particuiarly for mothers and children), improved nutrition, infectious disease control and better education, sanitation and housing have contributed to remarkable gains in health and life expectancy in China. The achievements have been far beyondl what could be expected for China's stage of economic development and are termed the First Health Care Revnlution (1.1-10)LX. It was firmly founded on a broad, publicly financed and conducted disease prevention strategy, coupled with accessible primary health care. Such successes in the control of infectious disease mortality far exceeded what has been achieved in many other developing countries. 3. Morbidity and mortality from infectious diseases continue to decline on average in most areas of China. However, in some locales and among certain age groups, and especially among people in remote and poor rt lions, levels of communicable .iisease are much higher than the national averages. Reliable data about infectious disease tren"Is in these areas do not exist. But even data based on provincial averages show that there are substantial parts of China where declines in the prevalence of some diseases have slowed and even reversed. Underlying these developments, and sharpening their impact among the poor have been uneven economic growth, a relative reduction of public funding for health and privatization of most health services. Even where deterioration of health status may not have occurred, between 10 and 20% of the population still suffers unacceptably high levels of acute respiratory disease, tuberculosis, pneumonia, dysentery, parasitic diseases and micronutrient deficiencies. Although circumstances surrounding the health sector have changed in 1980s, the chief public health priority for this part of the population is to complete the First Health Care Revolution. This wiii require the expansion and continuation of the disease prevention strategies that have already proved effective in most of China. Gains in the more backward aress will be more difficult to achieve. They will require improved epidemiological V/ References to more detailed discussion in the main text are indicated by chapter and paragraph numbers, i.e. chapter 1, paras. number 1-10).  - iU - planning, resumptioii of public financing for primary health care, increased and better health manpower, health education programs, and effective deployment of health care workers and resources. In addition, for most of China, health strategy for the future will have to recognize that some of the current inequities in disease burden have been caused in part by shifts in health and economic policy since 1979. 4. However, in all parts of China, including the poorest areas, infectiou. diseases have decreased to a point where the chief causes of premature death and disability that remain are the various chronic diseases (1.11-22 and Tat' ). China's disease reporting syst_ms are improving rapidly and leave no doubt about overall trends (Box 1.2). The infant mortality rate by the beginning of the 1980s was thought to have fallen to about 34/1000 live births (official data). It is now recognized to have probably stagnated at about 40/1000 during the 1980s, though this still is moderately low among developing countries. Chances of death in childhood (1 to 4 years) and youth (5 to 14 vears) have been consistently and dramatically falling since the mid-1970s. The annual probability of death from infectious disease for adult men and women in China (ages 15 to 60) is just over 1%. Rural men have almost twice the chance of urban men of dying of infectious disease (1.1% versus 0.7%). Rural women are four times as likely to die of infectious disease (1.4% versus 0.34% urban). Almost all this difference is due only to tuberculosis for men and to tuberculosis (three-fourths) and maternal risks (one-fourth) for women. Both problems can be effectively addressed with well-designed, publicly-unded health services but have languished during the 1980s partly as a consequence of economic policy shifts. S. In contrast, the annual probability of adult death from chronic disease, injury and suicide is almost 15 times greater for men, and 10 times greater for women (when compared with infectious disease). Urban/rural differences are mdch narro.ver for chance of death from the chronic diseases. Rural adult males are 8% more likely to die from chronic disease or injury compared to urban men; rural women have probabilities 11% higher than urban women. For both sexes, in both rural and urban areas, the risk of death from chronic disea- ' many times that of communicable disease. The main causes of death are cancers, hea .. ase, stroke, chronic lung disease, liver disease and injury and sLicide. These same causes acwunt for the majority of premature, serious disability. For 80% to 90% of the population the most important disease control priorities that remain for the 1990s and beyond involve the chronic non-communicable diseases of middle age, injuries and suicide. Success in the First Health Care Revolution presents China with * ery different public health challenges for the future. 6. The Health Transition Forces. The Chinese health care system is not well-prepared for the transition from acute to chronic disease control, or for coping with the problems created by the structural changes in the economy. However, many of the forces driving this health transition are inexorable. There are demographic changes as the many children of today grow older to form a larger middle-aged population at risk from the chronic diseases which emerge mainly in middle and old age (Table 4.1). There is changirng probability of developing chronic diseases as a result of trends in risk factor exposures (e.g., cigarette smoking). The present masking effect of the long incubation period for .chronic diseases will soon begin to disappear. In particular, the future large -ffects of current smoking patterns will materialize (3.4-  -i.- 14). Other lifestyle, dietary, environmental and occupational risk factor exposures are changing, with some increasing and others decreasing in duration, magnitude or frequency (3.15-36). There is cons-quent changing morbidity and mortality from disabling and medica11y complex chronic diseases (Chapter 2). Demands for treatment and care fox the middle aged and elderly will be strong. Economic losses from the effects cf premature disease and death and investment requirements for hospitals, ir.edical technologies and health manpower will be large (Chapters 6-8). 7. At present, some prevention programs and health agencies lack clear objectives (5.6) and sustained, public financial support. Many "public" health programs now concentrate almost all their efforts on the needs of only the first 10% of the average life span. Health needs for the remaining 90% of life for most people are largely subject to market forces (9.23-27). Even public expenditures for illness care in adult life are often mainly for treatment or palliative care of chronic illnesses which, although they may have been preventable, may not respond to medical treatment (9.33-36 and Chapter 2). Expenditure patterns and the trends inherent in the health transition threaten to cause consumers, providers and financiers of health services to respond in ways that are largely ineffective, and may actually reduce access to effective health care at all ages (Boxes 9.2 and 9.3). Health institutions and their staff today are oriented (by training, equipment, tradition and especially the present financial system) toward providing mainly treatment services (6.1-22), and this is not in general the best strategy for control of chronic disease (Chapter 2 and 5.1-3). Th;- Central and Provincial Planning Commissions continue to place priority on increasing investment in hospitals (6.35-38). Total health care spending patterns are less supportive of the stated national policy goals of "prevention first" and 'health for all." Indeed, in recent years, health care financing has been provided in ways that, in part, are workirg against development of a preventive strategy (9.19; 9.35-36) and are contributing to higher health care costs (9.43-57). For example, financial authorities, concerned about present serious resource constraints, try to limit recurrent budget funding and press health institutions to mobilize more of their resources from fees, with adverse generaL implications for health spending (9.28-30; 9.62-66). 8. Health FinancinR. The most important event for China's health sector in the 1980s was the decision by government, in implementation of its economic reforms, to make cost recovery the foundation of health care financing (9.11-18). This process began with the ending of the commune system, which had previously served as the source of much health care financing. The change accelerated with financial system reforms and decentralization policies that resulted in relative declines in public resource flows to the health sector to pay for adequate salaries and other recurrent costs (9.23-27). 9. The macio-economic environment for the health system radically changed and became relatively inhospitable to public health goals. It stressed competition and financial self-sufficiency at the institutional level and directed public resources away from the health sector in favor of the productive sectors. To cope with these changes, the Ministry of P: tic Health (MOPH) and provincial and local bureaus of health initiated policy changes within the health sector. Many of these changes were intended to improve efficiency and sen ice. They also sought to mobilize essential resources for the sector in order to retain health manpower and keep health institutions open. By and large these attempts have succeeded, but with some unintended, adverse effects.  - iv - * There has been a redirection of effort away from basic prevention programs with mainly public benefits toward revenue earning preventive activities with limited (mainly private) benefits (9.18-20). Resource mobilization and efficiency were encouraged by reforms requiring most health institutions to earn revenues sufficient to cover operational costs and some capital costs. This resulted in "provider encouraged' consumption of those health services on which a profit could be earned, irrespective of whether they weroe of much real benefit (7.12-13 and Boxes 9.2 and 9.3). More health services were provided to the population who are :nsured because most insurance plans do not have co-payment or deductible charges to discourage excessive consumption of services (9.13-15 and Chart 9.3). Health service provision was influenced by prices. Some prices are well above costs and provide an incentive for hospitals and physicians to prescribe use of these services and items; other prices are well below cost and cause losses that discourage their use (9.41-55). - There is a lack of effective referral and triage systems. This has meant that insured and fee paying patients seek care mainly from higher level facilities, these hospitals thus have high usage rates and make additional claims for expansion, using the public investment budget (9.33 and Chapter 6). 10. The macro-environment and the health sector's responses to it have resulted in the following current trends in the health sector financing (Cnapter 9): 3 Real health spending (from all sources - budgets, fees and insurance) per capita has been rising faster than total economic growth (11% compared to 8.7%, 1980-88). * An increasing share of health spending is for hospitals and treatment costs, rather than prevention and health protection programs. * Budgetary spending for health is increasing in absolute terms but is declining as a share of total health spending (from 30% to 19%, 1980-88). * Budgetary spending for operating costs of disease prevention programs and primary health care services is increasingly inadequate. * Patient fees are increasing both absolutely and as a share of total health expenditures (from 14% to 36%, 1980488). They may be unevenly distributed across the population, thereby raising questions of equity and access to health care for the most needy. Insurance payments are increasing in absolute terms but their relative shares of total health spending may have declined (from 53% to 41%, 1980-88) and cover only a smaller share of the population than previously.  The total effects of these changes and trends have left China poorly positioned to deal with foreseeable health status developments and accompanying financial pressures. 11. Prospects for Future Illness Trends and Options. The main chronic diseases causing premature death and disability are stroke, various heart diseases, chronic obstructive lung disease, various cancers, and diabetes; injuries and suicides are additional important causes of premature death and illness. There is good evidence from China and other parts of the world that a large fraction of premature illness and death from these causes is preventable (Chapter 2). 12. Chronic disease is the result of exposures to risk factors (Chapter 3). These can play many roles in different settings, can modify each other, and can operate simultaneously in several disease processes. Risk factors for the chronic diseases are often multifactorial, synergistic, and socially complex. Moreover, chronic diseases move in slow motion. The pathological processes take years to develop. The constellation of risks that produce the pathology is imbedded in community habits that change slowly. Effects of some chronic disease risk factors are relatively irreversible. This implies need for quick and concerted action not only to safeguard the young but to arrest further risk increases for adults. The main risk factors for premature development of chronic disease in the future are tobacco smoking (3.4), hypertension (3.16), (saturated, animal) fat in the diet (3.22), envirommental and occupational factors (3.27), and chronic bacterial and viral infections (3.32). 13. It is possible to estimate the approximate future trends for the main chronic diseases that will be caused by these determinants (Chapter 4). As today's youth mature, the middle aged population will grow very rapidly in the next few decades (+240% for ages 40-69, 1990 to 2030) while the numbers of children and young adults will probably remain about the same (Table 4.1). Total numbers of deaths will rise sharp'y (from 5 million to about 17 million annually), but about one-third of the total will be premature, among the middle aged. This will cause average life expectancy to decline (by about 4 years by 2030) and the numbers of ill and disabled in the popula- tion will rise sharply (Table 4.2). Health care costs for treatment of the middle aged and for long, repetitive periods of disability can be expected to increase rapidly (4.24-33). 14. These trends are not inevitable. With a health strategy aimed at prevention of chronic diseases the trends can be moderated (Chapter 4, section B) with approximately the following consequences. Pop0m!tc'n growth among the middle aged and elderly will be slightly higher, but wilU not feedback into fertility. Total numbers of deaths annually will be somewhat lower (about 13 million by 2030), and fewer of these wiU be among the middle aged. Average life expectancy will continue to increase slowly, as it has in more developed countries, and the size of the disabled and ill population compared to the productive population will be smaller. Health care costs will still rise, but less rapidly, for treatment of premature illness. Considerable investment in critical care units, hospitals and high technologies for treatment of middle aged illness can be avoided. Economic losses due to premature death and disability can be limited. Total spending o, health will still rise. But, it will be more a function of policies relating to access, location and intensity of  - vi - medical care to prolong life in old age, rather than for premature illness in middle age. The greatest amount of premature mortality and morbidity can be prevented by concentration on the diseases of lung cancer, chronic obstructive lung disease, coronary heart disease, stroke and injuries. Prevention efforts for all other chronic diseases combined will yield much smaller total effects, though these may be important for certain groups and locales. Prevention of liver cancer, the complications of diabetes and perhaps the recurrence of stroke, will not affect mortality significantly but could substantially reduce disability and medical costs. 15. The choice in strategy is not between prevention or treatment of chronic disease, but in achievement of an affordable balance of treatment on top of a sustained preventive strategy. This balance will have to be achieved within the resources available and that means that total health spending will be the most important element for Government to consider as it revises national health strategy. 16. Basis for Strateg. Total health spending (and its growth rate) are functions of four broad variables: a) changes in demand induced by the demographic factors, i.e., population growth and an aging population structure; b) changes in demand induced by epidemiologic factors. i.e., higher (and lower) age-specific rates of different diseases; c) changes in utilization due to higher (and lower) consumer demand or provider induced consumption of health services (because of better - or worse - access, insurance coverage, rising incomes, desire for more profit, etc.); and, d) changes in unit costs (increases or decreases) because of new technology or practices in health services, or because of proven ineffectiveness of some established practices. 17. In managing the health transition veiy little can be done during the next half century about the first variable beiuse the people who will reach middle age are already alive. The second variable of epidemiological change can best be controlled through strategy elements which emphasize prevention, to reduce and control exposure to tobacco, hepatitis B virus (HBV), hypertension, and other risk factors. Rough estimates show that by the year 2030 the absolute number of deaths among middle-aged Chinese will have grown at 4% annually "without", compared with 2.7% growth annually "with", adoption of a preventive strategy (growth is due chiefly to the increasing numbers at risk); 1.3% per year difference in growth rate from 1990 to 2030 would mean that by 2030, 40% of all premature deaths would be avoided. Projections show that with a good preventive strategy the rate of growth of real, per capita, health spending due to the demographic and epidemiological variables could be cut by 30 to 50% (from over 2% per annum per capita in real terms to about 1-1.2% per annum, per capita). 18. Preventive programs take time to become effective (4.23) and most benefits are in the future, while morbidity requires care in the present. Health strategy will still have to be concerned with providing illness care because earlier preventive programs did not exist and because some  - vii - share of disease cannot be prevented. Thus, strategy must also be concerned with health care institutions, technology and manpower, and include consideration of effectiveness and with achieving efficiency in the use of effective treatments (i.e., controlling costs, and constraining demand). 19. The third and fourth variables determining total health spending (utilization and unit costs) can be influenced by government policy efforts to improve effectiveness and efficiency of hospitals, technologies and manpower. Policies aimed at controlling utilization and unit costs might limit the rate of growth from these variables to about half of what might otherwise occur (increasing at the rate of 1.5% per annum, per capita rather than 3%). 20. With the right health strategy China's total health expenditures might only rise from today's 3.2% of GDP to perhaps 6-7% by 2010 and 10-12% by 2030 (4.34-37). With less successful effort to control the health transition and to improve effectiveness and efficiency, total health spending will soon rise to levels which cause either a collapse of the health system, or the emergence of destabilizing inequities and social problems. 21. Development of Health Strate. This findings of this report suggest that health strategy will have to include the following objectives: 1) preservation of gains over infectious diseases, plus treatment and prevention of remaining infectious diseases in areas which have experienced some deterioration in recent years or with still high rates of maternal, infant and childhood mortality; 2) treatment of those chronic diseases for which medical procedurm.s are effective; 3) sustained, long-term and publicly-financed, national programs of prevention of premature disability and death from the chronic diseases and from injuries and suicides; and, 4) development of pluralistic (public and private) financing systems for humane care of the chronically ill and elderly. 22. The report also suggests that health strategy in China must address five key policy areas with sensible adaptation to take account of regional differences, as the essential elements to future success or failure. These key policy areas are: * improved management of the health trLnsition itself; * adoption of health financing sYstems and policies appropriate to the health transition; * more effective development and management of heaih instituions; * better assessment and regulation of health technologies; and, * improvement in the quality and numbers of health manpower. The first two of these are concerned mainly with overall direction and impact of the health system. The last three are concerned mainly with efficiency and effectiveness.  - viii - Policy Reoommendations in the Five Key Areas A. For the Health Transition. 23. To keep the health transition from producing a health care crisis, China needs to concentrate on a primary preventon strategy aimed at the reduction of the key risk factors and the development of cost-effetive secondary prevention programs and, where effective treatments exist, efficient delivery of those treatments that are most important. To do this will require China to reform, adapt and strengthen the Ministry of Public Health and health institutions at all levels for greater efficiency (5.2-6). The Government will need to develop consensus on, articulate and disseminate a strategic framework for chronic disease prevention and management (5.7-26). At minimum this strategy will have to include the following elements. The Ministry of Public Health needs to reach an intemal consensus about the health transition, the remaining infectious disease problems and the evolving chronic disease problem, the importance of a risk factor approach and, on this basis, formulate a preliminary strategy for government (5.27; 3.1-3). National awareness (official and public) of the nature of chronic disease needs to be raised (5.28-29). Medical authorities will need to inform political and financial leaders of the reasons for China to adopt a preventive approach or it is doubtful that adequate, sustained budgetary resources will be provided for prevention programs. * A key topic to be considered by Government is whether the magnitude of health risks, rapidly escalating costs, and considerations of efficiency mandate reorzanization of the major agencies whose activities determine demand and supply of health services. Specifically, the lack of effective coordination between the health sector and the pharmaceutical and medical equipment production companies under the control of the State Pharmaceutical Administration risks continued inappropriate subsidies and sub-optimal products and drugs to meet real health needs (Box. 9.3, Chapters 7 and 9). The duplicate functions and competitive forces inherent in a separate system of Traditional Chinese Medicine hospitals in every county, and of enterprise hospitals, also deserves reconsideration. The present situation only impedes efforts to control costs, develop population-based health services and improve efficiency and efficacy (Chapters 6, 7 and 9). To deal appropriately with these other agencies may require establishment of a strong supra-ministerial policy body. It will be essential for this body to have a health promotion and disease prevention orientation. The most invortant risk factors need to be targeted for long-term, national control efforts (5.30-31). By far the most important of all these efforts will involve control of cigarette smoking. This should be the focus of a national, multi-sectoral prDgram including health education, regulatory and fiscal measures to reduce smoking prevalence among all age groups (Box 5.1). Hepatitis B virus vaccination and dietary change will be important, supplementary measures. Injury prevention will be  - ix - important in the short and medium term. Reduction of indoor air pollutants, occupational risk exposures, heavy metal and toxic contaminants in the air and of water resources are important steps with probable long term health benefits. Public funding is appropriate for research to determine probable risk and to recommend effective risk reduction strategies. The Ministry of Public Health, the Ministry of Fmance, and the State Planning Commission need to develop and use health, financial and planning policies which take account of disease-specific strategy considerations (5.32): i. of the leading cancers only lung cancer (and other smoking-related cancers) and liver cancer can now be addressed effectively with primary prevention programs; secondary prevention and treatment progams for most of the other cancers should be approached cautiously in allocating public resources; i. primary preventioa programs for coronary heart disease and underlying atherosclerotic disease are cost-effective and efficacious and such programs should become part of China's normal public health arsenal, with considerable public funding and no attempt to earn fees from these services; iii. stroke and hypertensive heart disease will respond well to publicly funded primary and secondary prevention efforts to reduce hypertension; iv. the optimal strategy for control of hypertension is problematic and deserves to be the subject of large, simple randomized trials to confirm the best approaches for China and to establish the most cost-effective methods. Inclusion of funding for these trials in the national budget should be a priority; V. public primary prevention programs and multi-sectoral public and private investments of a wide variety can be effective in reducing morbidity, mortality and long-term disability from injury and suicide; vi. chronic obstructive lung disease (COPD) can be substantially limited by smoking cessation, and perhaps by reduced exposure to other forms of indoor and outdoor smoke, improved chiidhood nutrition and access to primary care to reduce childhood respiratory infections, and improved housing and working conditions; these, however, all require further epidemiological research. Public financing of secondary prevention to minimize COPD disability is likely to be cost-effective if properly undertaken; vii. the principles of cost-effectiveness and considerations of efficacy should also be applied to primary and secondary prevention programs that deal with other diseases (communicable and chronic) and their risk factors. Most important, obvious priorities would be vaccination (including HBV), resumption of public financing for control of pulmonary tuberculosis, schistosomiasis and selected other chronic infectious and endemic diseases.  - x - 24. Government polcies will also have to invoive multi-sectoral intervention progamns and cooperation in the following key points. For successful development and coordination of cross- sectoral policy the supra-ministerial body referred to aboveY may also be crucial. Agricultural production and food pncing policies need to begin to take account of the health and economic benefits of key dietary factors, particularly that increased fresh fruit and vegetable consumption, and salt, animal fat, alcohol and tobacco avoidance are effective elements of a preventive strategy. Refulatoa, policies to control cigarette tar levels, food contents and processing methods, micronutrient supplements, animal fat avoidance, salt restriction and consumer product safety can be adjusted to have substantial health benefits. Employment policies can be modified to positively affect health risk behaviors, job safety and occupational hazards such as heavy exposure to smoke or dusts; The social and economic costs of disabilitv can be reduced by eliminating barriers to productivity and mobility; The structure and ownership of the health care system itself can be an important determinant of the cost and use of and access to health services; wage policies for health providers and budgetary and fiscal policies which affect provision of health services can have positive effects on the health system which today are neglected or are even negative in impact. 25. The health institutions and their roles, a framework for infectious and chronic disease management, and disease-specific strategies for chronic disease control are three essential elements for China to consider in dealing with the health transition. Improvements in capacity and effectiveness of the illness-care system, and in the policies which influence resource allocation, are crucial elements but these require the cooperation and involvement of planning and finance and other authorities to help develop policies appropriate to the health transition. B. For Health Financing. 26. For the immediate future, the main financial challenge is to return to adequate public (bge-tM) fun&nk for primary health services to the poor, prevention of infectious disease, and initiation of primary and secondary prevention programs for premature chronic disease. In addition, government wil need to do the following. Revise prices for medical Procedures and services to levels close to marginal cost; revise incentives that health institutions have for unnecessary provision of services not related to medical conditions (9.56-58;). Recommendation three, para. 23.  - xi - Review and analyze the present vstem of dmi pncU2Z distribution, mark-ups and profit retention, with the purpose of reducing incentives for polypharmacy and excessive drug prescription (9.51-57). Develop co-payments, deductibles, disease related group (DRG) systems and other forms of cost control and create disincentives aimed at excessive consumption of medical care by insured patients (9.13-15). Review and study alternatives for development of national health insurance systems, including both public and private, market-related, decentralized approaches and cen- trally or provincially-funded and coordinated 'universal health insurance systems" (9.69-71). Develop an integrated system of estimating annual health emenditures from all sources, by health purpose, category of expenditure, region, etc., for assessment and planning of health policy. Establish better controls on capital investment in the health sector to ensure responsiveness to health needs, to assess cost-effectiveness and to ensure attention to the lowest level health institutions and to prevention programs and institutions. 27. Progressively with time, the challenge will be to deal with the inevitable emergence of much more chronic illness in middle and old age, while maintaining control of infectious diseases and sustaining widespread programs of primary prevention against premature chronic disease. This will require sharp improvements in efficiency and effectiveness of health resources (Policy Recommendations C, D, and E below). 28. The key questions to be explored for the near and medium term future include: How to pay for primary prevention services? How to select which of these services to offer? How to ration access to them? How to pay for secondary prevention services that benefit the individual but also offer economic benefits (or loss avoidance) to the economy as a whole? How to evaluate which services should be offered and to whom? How to pay for treatment and care? Which conditions and medical procedures fall into categories that all people should be entitled to? Which conditions benefit only the individual so specifically and are so expensive or of so little efficacy that payment for them should be primarily the responsibility of the affected persons? How to provide risk sharing mechanisms for those who wish to protect themselves against such conditions? Which behaviors by people or industries create such significant future health burdens and economic losses that they need to be regulated or taxed in order to protect the public benefit for the future? Who should pay, and how, for health costs that result from high risk behavior and practices by individuals and industries?  - xii - How to begin to pay for health maintenance care for the elderly? How to provide and pay for the chronically and terminally ill among the elderly? Which conditions can be effectively dealt with and how--and which cannot? 29. There are no easv answers to these questions. Many countries are struggling to develop answers that match their ethical, social and economic objectives. While China will have to debate, experiment with and evaluate its own approaches to these questions, the themes explored throughout this report are likely to provide useful reference points: Primary prevention for the major diseases that can be prevented is likely to be cheaper than any alternative. Primary prevention must be started early and sustained, or its benefits are lost, or are much slower to materialize. Secondary prevention efforts must be approached with caution to ensure their priority and cost effectiveness. All primary prevention programs, and mniay secondary prevention efforts, will be at risk of eventual collapse unless primarily and pernmnently funded from public sources, as recognized public goods. * Many features of treatment, curative, rehabilitative and maintenance medical care will share some features of public and private goods and benefits. Some will be cost effective and efficacious and others will not. Institutions and procedures (and not reliance on market forces) will be necessary to keep these under constant review and to facilitate continuing public consensus on what should be provided and paid for, what should not, and from what sources. 30. In the longer term future the main issue, once premature chronic illness is largely controlled, will be how to finance health care (much of it for chronic illness) at the end of a long life, equitably and with efficiency. Financing for these needs will have to be considered in the broader comext of old age insurance schemes, pension entitlement, and the other financial needs of the elderly. These topics are beyond the scope of this report. C For Health Institutions and Their Management. 31. The hospital system is overloaded and inefficient at the higher levels and is under-used and of poor quality at the lower levels. While the system is already large, it is deteriorating and will require substantial new investment and expansion to serve the predictably much higher demands for medical care which will emerge from the health transition (6.1-39). The following key recommendations are made (6.40-48). ID A stronger pnmav pre-vention content particularly at the lower levels, should be added to the already strong primary health care orientation of hospitals, emphasis should be placed on improving quality and breadth of service at the lower levels to avoid unnecessary overload of higher level hospitals and to improve effectiveness and equity.  - xi-i I Reeional health nlannine authorities need to be established with strong powers of resource allocation and coordination (including capital and operating budgets, equipment, manpower and programs) to plan and direct region-wide health programs and investment (6.45-46). A comprehensive, integrated, health information system should be developed and used by these authorities. Current incentives for individual hospitals to earn revenues should be revised to emphasize region-wide hospital resource mobilization. Allocation of resources among hospitals should be accompanied by increased budgetary funding for public and preventive health goals and for reduction of waste and inefficiency (6.43). Hospitals planning and ownership needs to be consolidated to no more than three levels and effectively coordinated among all owners to meet health needs in a given service region. Ownership of separate hospitals by each level of government should be abolished in favor of a regional (population-based) hospital system. Development of some form of unified management system (or corporation) for all public hospitals in a region should be considered to allow rational specialization, cooperation and inter-hospital reallocation of resources (equipment and staff). Professional hospital managers should be developed to replace the current system of clinician managers. Specialized hospitals need to be reduced in number and gradually made into general hospitals; expansion to every county of the separate system of Traditional Chinese Medicine hospitals needs to be reconsidered (6.43). - VWidespread management and operating refonns to improve efficiency are needed but can be successful only with the policy changes (above) to revise hospital system planning and incentives for good financial management. Steps required then will also include (Chapter 6): an active program of health services research, professional health care managers, nearly complete reorientation of emergency services, reduction of average length of stay, establishment of a simple accreditation system, internal and external quality control and quality assurance procedures, increased emphasis on ambulatory care programs and alternatives to hospital stay for rehabilitation patients and the terminally ill, and initiation of perfor- mance-based criteria to ensure efficiency, appropriateness and quality of patient care. D. For Medical Technologies. 32. Medical technologies (including drugs) in use today in China are purchased and used with little regard to their cost effectiveness (7.3-6). There is not even a basic system of medical technology assessment to guide future acquisitions and influence current uses. Some practices of using technologies are inappropriate. Many ineffective and dangerous technologies are still in use and should he discontinued (7.6-11). The current pricing structure for medical services is resulting in overuse of some technologies, and under use of others (7.12-13), so that health care spending is unnecessarily increasing while attention to disease prevention and equity of access to primary care may be declining. Yet appropriate acquisition, distribution and use of cost effective medical technologies can be an important element of health strategy to improve efficacy, efficiency and equity (Box 7.1). The following key recommendations are made.  - xiv. China should begin quickly to develop and regularly utilize a polk,v of medical technology assessment (7.14-16) and use it to streamline and improve applications of current technologies. Findings of technology assessment investigations should be widely disseminated to influence acquisition and use. Technologies which are clearly not cost-effective should be abandoned or not initiated (7.11 and Box 7.2). While China can easily and quickly take advantage of technology assessment work done elsewhere in the world, it needs to develop specific ways to assemble, synthesize and disseminate knowledge and appropriate policies about technologies. To do this, development of a national ptogram for medical technologv assessment and establishment of an organization to manage this program is recommended (7.20-25). The current gricimn system for medical technologies and drugs should be substantially changed to reduce incentives for over or underuse (7.26). Revision of the pricing system will also require changing the means by which public and social elements of health care are financed (9.57-61). There will need to be a change from the present emphasis on fee-for-service and cost recovery to a system of public funding for basic health entitlements, public health goals and most preventive services, and a parallel, probably pluralistic (public and private), system of financing private health services (i.e., those which have mainly private, not public, benefits). E. For Health ManDower. 33. Past health sector success was partly the result of innovative deployment and direction of manpower to overcome clearly identified problems (8.4). The health transition is rapidly changing the issues with which health workers have to deal. Many good educational and training innovations which offer hope for effective response to future problems are underway (8.10-12). These are impeded by a general shortage of operating budgets for educational innovation, a lack of skilled personnel and institutional mechanisms for evaluating educational and training innovations, and overly rigid institutional and professional boundaries (8.13-14). There are severe shortages of some health manpower specialties and manpower policy and planning is still unduly linked to hospital planning and bears little relation to broader nealth goals (8.15-16, 23-34). The recruitment and retention systems have many strengths, but also major weaknesses - the current health financing system, especially as it relates to wage policy (and its detrimental effects on health workers' attention to efficiency, medical efficacy, primary health care needs and prevention strategies), is probably most in need of reform (8.18-22). 34. In addition to the financial and price reforms suggested elsewhere, the following key steps are recommended: Manpower planning methods for hospital services, and hospital staffing norms and skills, are in need of urgent revision to deal better with the health transition. These methods need to be population based, closely coordinated with educational programming, pre-service and in-service, especially concerning the manpower skills implied in the other sections of this report (e.g., for epidemiology, planning, management and preventive services).  Manpower goticies need to be carefully formulated together to create a more efficient, equitable medical care system (with ambulatory emphasis, a, focus on prevention, and skills and knowledge consistent with a regional health services approach and appropriate utilization of medical technologies). This will require policies which facilitate career development, reassignment and retention of personnel among all health institutions in a health region. Short and medium-term driorities should be on substantial quality enhancement through retraining and upgrading of existing ma:ipower, except in the very scarce categories (nursing, dentistry, technicians, etc.) where quantitative expansion should also be stressed (8.15). Lonzer term goals should be or. quandtity epansion consistent with health policy goals (not just hospital ratios) with qualitative educational focus on key problems such as those suggested in other parts of this report. In the meantime, the cum-iculum at all secondary and higher level health sector schools and colleges should continue to be improved. This should include less emphasis on specialization, much more attention to a population-based approach, preventive strategies and the skills that are needed for these, and rapid introduction of modem health planning, finance and management concepts. Better coordination with the State Education Commission, and greater flexibility on its part to respond to innovative approaches such as well-managed correspondence courses and a graduate school of public health, would considerably improve the chances of manpower policies and skills evolving successfully.  CHAPTER 1 - OVERVIEW OF MORTALITY AND ILLNESS IN CHINA A. Introduction 1. Childhood immunization programs, accessible primary health care, family planning, improved nutrition, control of many infectious and endemic diseases and better sanitation and housing have contributed to remarkable improvements in health and increased life expectancy in China today. 2. A 1984 Bank study, The Health Sector in China (No. 4664), examined the policies and programs that led to China's achievements during its first health care revolution, beginning in 1949. That report reviewed China's progress in health, in population control and in nutrition, as well as we relevant supporting policies, financing and resources. rhe report also discussed several influences on health from outside the health sector--greater access to clean water, sanitary waste disposal, and fertility reduction. However, the 1984 report found two distinct problem areas: (i) Success had been uneven. China had succeeded in combatting communicable diseases and improving the health of its population far beyond what could be expected at its stage of economic development. Health conditions in the cities were very good indeed, and many rural areas lagged behind the cities by only a few vears in life expectancy. But the health conditions of perhaps a quarter of the rural Chinese remained similar to those in other developing countries. These people lived in remote parts of China where economic and administrative infrastructure was lacking, education levels generally were low, and the economic resource endowment was generally poor. The 1984 report concl.uded that there would be no easy or inexpensive alternatives to achi'tving improved health conditions in these areas equivalent to the stardards of the better developed regions. Continuation of the past, prd v-en methods of health sector development deserved high priority and continued funding by the central government for these areas. (ii) The emerging Prevalence of chronic diseases was becoming a major concern. China's pattern of disease and death had become very much like that of the industrialized world, with heart disease, cancer, and stroke remaining as the major killers at. dtsablers. As a rapidly increasing proportion of China's population sLr,,ives past youth, with infectious diseases less and less common not only in eariy adult life but also in middle-age, chronic disease would kJll or disable large numbers of the middle-aged, including some of the most productive and important segments of China's population. Increasing rates of some chronic diseases would counterbalance decreasing death rates from others, and would mean that a substantidl proportion of the middle-aged population would become chronically ill and disabled or would die prematurely. Moreover, treatments for many chronic diseases, as carried out in the West, tend to be expensive and of limited efficacy, and have little overall health impact. 3. In light of these problems, China's health sector faced two priority challenges:  - 2 - * To complete the first Chinese health care revolution by extending the methods that were already effective in most of China to areas where mortality from infectious diseases continued to be high; this would include the development of detailel plans for reducing mortality rates and morbidity due to specific infectious diseases in those areas. These plans would cover epidemiological considerations, financial analysis, and assessment of manpower needs, training, and deployment. The Ministry of Public Healrh, and programs supported by WHO, UNICEF, UNFPA, the World Bank and others ha.e given increased attention and support to these factors and to programs of Maternal and Child Health and the Expandec Programme of Immunization. * To instigate a second Chinese health care revolution, which would develop and implement approaches to the control of chronic disease, and would combine prevention, low-cost treatment, rehabilitation, and humar.e care. With many more people living longer, it will be particularly important to develop affordable ways of postponing the onset of morbidity, and of providing humane and dignified care of limited cost to those who are ill in middle and old age. Even partial success would be of immense value to China and to the rest of the international community. 4. In connection with the challenge of completing the first health care revolution, the 1984 report recognized that two highly undesirable consequences had resulted from the collapse of the rural cooperative health insurance programs. (This occurred after introduction of the so-called production responsibility system in the early 1980's, which meant that most of the rural population had to begin to pay on a fee-for-service basis for medical and preventive services.) First, some of the major gains in welfare that had been achieved by risk sharing would be lost without a health insurance scheme. Although the rural cooperative insurance system had many defects, it nonetheless provided important basic protection at sommune level. Second, fee-for-service approaches to provision of health care Vould inevitably neglect public preventive measures, although these had played a vital role in China's past successes in combatting communicable diseases. 5. The second challenge, forging phase two in the Chinese health care revolution, was inherent in China's success in reducing the incidence of communicable disease. It initiated the "health transition" (Box 1.1) and contained the seeds of the emerging problems that will confront China over the next century: the preponderance of illness and death, and medical care needs, being the result of chronic, non-communicable diseases, while at the same time China will have to continue the struggle against infectious diseases. 6. China's experience over the next few decades m,y offer lessons in social and health policy for the rest of the world, developed and developing alike. This report analyzes the changing epidemiological patterns, explores the main issues and probable trends of the second health revolution, and examines the need to realign strategic planning in health infrastructure, technology, manpower, and finances. The objectives of the report are to sharpen understanding of the future disease burden and its main causes; to  - 3 - help define the key issues in the health sector; and to evaluate options for China to consider in planning its future. B. Demographic Trends. 7. In China before 1950, life expectancy from birth was low, and more than half the population could expect to die from infectious and other non- degenerative diseases before reaching middle-age. Indeed, even during middle age, infective and parasitic diseases resulted in i, re suffering and death than did chronic diseases. With the success of the first health care revolution, these conditions have changed. Overall mortality declined rapidly after 1949. 8. The demographic impact is clearly visible in the improvements in the approximate survival curves presented in Chart 1.1, which show a dramatic older and upward progression over the 30 year period for both males and females. For example, a Chinese male had about a 60% chance of living to age 50 at the death rates of 1957. The 1975 death rates meant that he had the same probability of living to about age 65, and by the 1986 rates to his early seventies about the same as a American male. 9. This decline in death rates will continue to result in structural demographic changes, and affect China's medical care needs and system, as part of the health transition. Chart 1.2 shows an estimation of dependency ratios to the year 2025: * 'Dependent" populations (those above or below the normal working age range of 15 to 65 years old) will remain a relatively stable portion of total population, with a modest long-term decline. * The "old dependent" ratio (population above age 65 as a percentage of the working age population) will rise steadily from a modest 8% to 18%, about the same as the OECD nations today. Now that the probability of survival to old age is large, further decreases in mortality before old age will not be a very large determinant of the "old dependent" ratio. Nor, perhaps surprisingly, will the death rates in old age be a large determinant, for although preventive and therapeutic measures can decrease the proportion who die before old age, they have only a limited effect on life expectancy in old age. * Equally important, the tota'. "medically vulnerable" population (those belc* age 5 and over age 50, both groups that are prone to illness) will increase from 38% to 60% of the working age population. This will result largely from the age structure settling down and through the control of infectious diseases, which is already achieved in many areas. 10. These structural demographic changes mean that there will be future, inevitable increases in the overall prevalence of illness and the demand for health care. In addition, as will be explored in later chapters, (a) risk exposure, and thus probable disease incidence for some chronic diseases, is increasing; (b) the incidence of communicable and endemic diseasas for most of  -4- &-= 1.1 Sbe B-'lth mLaitomc Clarification of the concept of the health and coanmicable diseases. These declines make transition is necessary to umderstand the mortality and morbidity from all other causes perspective of this report and the alternatives relatively more Important, even if their real rates open to goverments in providing for the health of are not increasing. Chart 2 below shows this in a their citizens. *'ealth transLtion' in this report theoretical perspective and Chart 3 shows the is used to mean the shift Ln disease predomfiace relative changes experienced in both China and the from mainly coamimicable and infective diseases to Unlted States. The much shorter time period during mainly chronic and non-coammicable diseases. It which the relative change effect has occurred Ln is the result of three independent but related China places additional strains on already fragile phenomena, here termed; the relative change health and medical institutions and their effect, the demographic change effect, and the personnel. During the normal vorking life of most epidemiological change effect. Public and health planners and doctors in Cinla the range of professional perceptions of and reactions to these issues and demands which they msat deal with has phenomea are determining mueh of present health radically changed. It has proven difficult for care spending health researcb and public policy, them to educate civil leadership to the changes A better imderstandilng of these phenomena and their that are unerway, and the new spending priorities implications can lmprove the directions and content and health strategies vhich these require. ln a of pubLc policy. =number of countries, iucluding China, the relative Chart 1 belov shows the approximate declines t'~- effect has generated commentary and calls for Chaxt IbeLo shws te aproxmat decLne Lu iaeactio- anmog the pubILc and civil leaders because total death rates for the U.S. and for China chronic diseases are 'rising'. This perception may earILer this century. Tbase trends reflect t-he prove factual but it cannot be alleged only from a impact of m1nization , better nutritlon, improved 'rising sbare'. Other factors are at work and need sanitation, clean vater, fertillty control and mny to be accurately understood. y themselves, the other factors. relative shifts in dLsease prevalence and death The reative hanne ffectsof ~. ealthcauses are interesting but rather trivial events The relative chame effects of the health for the purposes of health planaingt and decisins transition are simply those caused by declines in the rates of death and morbLdLty from infectious to invest in new health systems OMh wndd U.orfety Rget APDnamusin ow at Iieeh Tnanftin 2m.~~~~~r 2000 _ - low 2. Thbes bfRg Chawe EfMtm Chia Lnd U. ties of ToWa DOeah (no eMie hi iM dee _ m eat O _aso Cw mnd 8bae . eIS55 c___ 70 - on.~~~~~~~~~~~~~~~~~~~~~r e".0'e . o / oce-33s.^ _80% i e , eo- _ * TIMr Pat_ I TW100b0 ItD 1820 11M 1040 1"0 WOO o Xt0 le t ~~~~~~~~~~~~~~Wm  -5- The demiaranhic chante effects of the hda;t! developing nations, cc average, up to now. transition are those induced by the aging of the However, prospects for continuation of this trend population structure - more people living beyond have been little examined or the developing vorld young adulthood constitute a greater pool of in public health and medical literature. There are persons at risk from the non-communicable, chronic reasons, explored ln later sections of this report, diseases whlch emrge mainly in middle and old age why the developing counties may begin to experience or with long exposure to causal factors. Chart 4 a health transition quite different from that of shows an example of how changes in demographlc the i-dustrialised countries with average increases structure in east and south Asia will Lncrease in age-specific death and disease rates amongst the dramatically (2501) the pool of people who could middle-aged and elderly. In the future it is normally be expected to be more prone to chronic certain that there will be more deaths and disease disease during the next 40 years. (The respective if more people Ilve to ages where chronic diseases increase in China will be 240X.) The demographic are more commou and if the age-specific rates of effect contributes to visibility of the relative some diseases increase. There will be strong effect, but the latter would occur even if the political and social claims resulting from the population structure vas not aging because of first factor. It is essential that policy leaders continued high fertility. When fertility reduction understand their ability to influence the health occurs (as in Chart 4) it accentuates both the transition through control of the second. demographic and relative change effects of the bealth transition but fertility reduction by itself Case fatality rates vill also affect is not a causal factor in the health transition. epidemiological outcomes of disease and thus the Even in societies with contLiued high fertility the nature of the health transition. If fewer people demographic effect of the bealth transition vill die of one cause of heart disease because of occur though the *relatlve- share of adults technological improvements in treatment, the compared to infant and ehildzen would be less. numbers (and age-specific rates) of persons dying of other causes will eventually increase. The enidemiolosical chanse effects of the beal-th Similarly, successful efforts at disease prevention transltion are those are caused by increases or vill influence the epidemiological effect of the decreases in the age-specific death or illness health transition by affecting both the ages and, rates for the different diseases. These are maLnly probably, rates of death from other disease. the consequence of increases or decreases in exposure to risk factors for the diseases. Chart In summary, the health transition is a process 5 sbovs bypothetlcal data for three different which is already underway almost everywhere. it is categories of chronic disease - those whose age- not a fixed, stable event, but rather the specific rates are declining, are remaining about interaction of a series of discrete events which do the sam, and are increasing over time. The rates not by their nature tend toward equilibrium. Its and total share of those diseases which are truly course in the future will depend primarily on both inereasing, or likely to increase, will deteri4-e the demographic and epidemLological effects, but the overall course of the health transition. In the latter will become progressively more important making population projects, demosraphers have as average life spans vill only slowly lengthen g-enerally assumed tbat total average age-specific beyond present elderly ages. Technological death rates, at least through middle-age, will innovations which change case fatality rates will continually fall. This assumption yields upward affect the nature of the transition. Policy futurS estimates of life expcCtancY. Whether this changes which affect risk factor exposures will be assumption ls viable or not depends entLrely oan the main determinant of future changes in age- whetber the epidemiological change effects of the specific disease rates and are thus the most health transition are mainly denreasing. Thi has important elements open to governments to influence been the experience in the indusu-tialized and the health transition. 4. PGPub.:iM Eat md Southst Ada G. EpiMmIOada Chang Eft drjalltw-p y y w dend on chaenic dimes mix and btnd tooe . e _ ">^"""" 4 2" _ ~~~~~- bi ;- _ _Xo ~ ~ ~ ~ ~ ~~~n o . . ~~~ ~ ~. . .--,,,, _w~J ohm _oomma _  Chart 1. 1 Survival Probability by Age China: 1957, 1975, and 1986 and U.S. 1985 100 MALE 100 FEMALE 90 90 80 5 0t 70 7 66o 0 60 - 40 -40- 30 - 1985. U.S. 30 _ - 1986, CHINA -1975, CHINA 20o _ 1957. CHINA 20 10 10 0 10 20 30 40 50 60 70 80 90 0 10 20 30 40 50 60 70 80 90 Age Group Age Group Sources: U.S. data from National Center of Heolth Statistics. China 1986 dato from Disease Surveillance Points System with adjustment of infant mortality from DSPs to correspond to national average of 40/1000. 1957 and 1975 data for China are from World Bank Heolth Sector Report, 1984 Probabilities would reach true "0" only at loter ages for which dota set ore not complete enough for detailed plots. the country is not likely to fall substantially, as the easy reductions have already been made; and (c) medical care costs, if not managed through wise policies, may rise faster than the general rate of growth and inflation. C. Mortality 11. Mortality today in China compares favorably to many other developing and developed countries. The infant mortality rate for most of China is low, about 40 per 1000 live births as a national average, though it may have been  places China among the better performing developing countries, the IDM is not uniformly low in all areas. Forty-one cities and urban areas have IMRs estimated to be less than 14/1000 and 84 counties may be less thatn 24/1000. UNICEF estimates provide- to the MOPH include more than 500 counties with IMRs over 50/1000 live births, 263 counties over 75, and 89 counties (not inleuding Tibet) over 100/1000. However, rates of death from all causes in childhood Chart 1.2 China Dependency Ratios, 1985-2025 0.65 0.6 -< ~~~~~~"Dependent Populotion"@,S