Health Care Reform in China

February 11th, 2009 | Sources: Wall Street Journal

Subjects: ,

We know why China’s State Council just announced a $120 billion, 3-year plan to improve its health care system.

Most Chinese don’t have health insurance, and the system requires payment at the time of care, so tens—maybe hundreds of millions have been doing without since China’s economy was, well, developing.

whatsmydeductible?And to the extent possible in a society where free speech isn’t, people are becoming a bit testy about that.

Besides, China’s government knows that citizens who are one medical event away from economic ruin aren’t going to be aggressive consumers, which must happen if its suddenly wobbly domestic economy is to stabilize.

(It’s either that or wait for the Americans to start spending and wouldn’t you know it? After decades of Relentless Xtreme Profligacy, those quirky Americans have put both hands in their pockets and threw in some super-glue.)

China’s government desperately needed to do something in health care even if the Hang Seng was still hanging-10. In 2006 for example, China spent less than 1% of its GDP on health care.

That puts China and its second largest economy in the world, in 156th place out of 196 countries surveyed for health spending by the World Health Organization, which is what Larry Gottlieb would call a travesty of a mockery.

The $120 billion equals 3% of China’s 2008 GDP. By comparison, America spends 17% of a GNP that’s twice as large as China’s on health care.

Details of the State Council program are nearly as sparse as those in a similar announcement made last October. The plan includes building new public hospitals, tuning up existing ones and improving access using networks of outpatient facilities. Other than that, who knows?

There are also plans to expand health insurance to 90% of China’s citizens by 2011, or one year later than that promised in the October release.

Welcome to the First World boys and girls!


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