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No.383: Reform of China’s Health Care System
 
 Author:Unirule  
Time:2009-09-15 14:12:44   Clicks:



Lecturer:Prof. Liu Guoen
Discussants:Prof. Zhu Hengpeng, Prof. Dong Zhaohui, Prof. Li lin, Prof .Yu Hui
 
 
At the 383th Unirule bi-weekly symposium, Dr. Liu Guoen, professor and founding Chair for the Department of Health Economics and Management, Peking University Guanghua School of Management, and Director of the China Center for Pharmacoeconomics and Outcomes Research, gave a speech on the subject of “Reform of China’s Health Care System”.
Lack enough input from public finance. In the past thirty years, public finance expenditure mostly concentrated on infrastructure instead of social welfare, which contributed to China’s fast economic growth but also result in today’s insufficient health care providence. There were two reasons for this misallocation resource. Firstly, in China the general public has no right to attend the process of budget making. The resources were all allocated by the government not the people. Secondly, one of the main indicators the central government used when evaluating the performance of local government officials is GDP, so the local officials have strong incentives to invest on infrastructure which will promote economic growth.

And there are another three problems with the health system itself. First, the hospitals lacks financing channels for the government restrict private investment in health care. Second, the personal administration is strictly controlled by the government. The hospital could not adjust its personnel according to the government. Third, the government strictly controls the price for health care service while not controls the price of drug, which creates incentives for doctors to prescript more than necessary drugs to the patient. 

On the demand side. From the figure below, we can see that patient need to cover more then 50% of health expenditure. This figure is far above what the average reimbursement rate of countries with GDP similar to China.

 

At the end of the presentation, Prof. Liu proposed a two side solution. On the supply side, the government should allocate more resource to health care and permit private investment. On the demand side, the government should develop a more comprehensive social security system to cover more health care expenditure.
 




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