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Why Healthcare Service Delivery is a Major Challenge to China Government

Nyamweya is a global researcher with many years of experience on practical research on a diversity of topics

How does China Manage its Healthcare Delivery Challenges

Healthcare delivery has been a major challenge for China government. There is no doubt that over the last decade, the government has endeavored to improve the health care system for the people’s health in China. Despite the notable expansion of the healthcare sector, there are still systematic issues and healthcare disparities, and uncoordinated insurance services. In addition, there has been increased cost and expenditure for health care services in the country. Following the high level of social and economic development, the healthcare system in China is currently facing challenges. These challenges include inadequate health staff, high demand for healthcare services, and stretched and inefficient utilization of healthcare resources.

Advanced healthcare is seen in urban hospitals which have undergone considerable development over the past years. However, rural healthcare facilities are increasingly undersupplied, understaffed, and underutilized. Besides, the staff in such centers are lacking in terms of knowledge of diseases, experience, and access to the latest. The healthcare providers including the doctors are also behind in terms of technical training. In this regard, smaller cities and rural areas face diverse challenges in healthcare provision. These are related to insufficient expertise in terms of healthcare professionals, insufficient hospital beds, and physician-patient mistrust. Accordingly, many people are forced to travel to big urban centers such as Shanghai so as to access the enhanced quality of care. Unfortunately, the migration of patients and population from rural areas have contributed to congestions in tertiary hospitals which in most cases are found in major urban centers and are aimed at providing specialist services. For instance, hospitals that are ranked within the triple-A category makeup only 7.7% of the nation’s medical centers but take care of about 50% of outpatient visits. Consequently, this has led to a high level of congestion which has not only strained doctors and other healthcare providers but also patients in keeping up with the high demand. Practically, doctors and healthcare providers in urban hospitals are required to work for long hours and are forced to see many people within a day. On the other hand, patients have to keep up with long queues at such hospitals, and most of the time they make appointments a month or more before accessing the services.

The increasingly aging population in China also provides another significant challenge to the country’s healthcare system. The aging population comes with unique needs especially those associated with chronic needs. Despite their vulnerability to chronic ailments, a majority of the elderly people are resistant to the use of the latest technologies in healthcare provisions. Many consider themselves as being ICT illiterate and so they would prefer old ways of health service. Consequently, this limits the provision of the required services to these groups of people.

How China Manages the Healthcare Delivery through Market Oriented System

China has endeavored to address healthcare challenges by focusing on a market-oriented healthcare system. This is because its governance system is structured in a way that represents special interest groups. For instance, the ministry of Health is established for the purpose of representing the interests of hospitals, healthcare workers, and physicians. On the other hand, the Ministry of Labor is designed to represent the interest of labor organizations and unions. The Ministry of Railway transport represents the interests of railways and their works. This structure has established a power axis where the Ministry of Health is aligned with the interest of physicians, health care workers, and public hospitals in the formulation and implementation of public policy. To address the problem of medical impoverishment and unaffordable access to healthcare the government has embarked to establish and fund the healthcare market. According to Serrat (2017), a market system works by generating what users need for the least possible cost. Accordingly, to reduce the cost of healthcare, the China government has embarked on creating a basic social medical insurance system that is aimed at achieving universal health insurance coverage. In this regard, the government has also focused on providing extensive government subsidies, increasing economic power, and implementing program policies. However, the funding and subsidies have not been able to tackle efficient and effective service delivery in the public healthcare sector.

The Ministry of Health in China allocates funds to public facilities and their personnel. China uses a three-tier system in the delivery of healthcare services. The central government is the main service provider in healthcare. However, healthcare delivery is done through healthcare entities, and service providers who operate at the county, township, and rural levels. There are also organizations that operate at municipal, district, and community levels within urban centers. In China, the main healthcare provider is public hospitals. According to National Health Commission (2018), 82% of citizens seek in-patient healthcare services from public hospitals. There are also three main healthcare insurance schemes in China. They include urban and rural resident-based insurance programs a large junk of which are funded by government subsidies (that is approximately 70% of the overall funds), employee-based contributions, and employer-funded health insurance schemes. The additional funding on social health insurance and raising of government subsidies is the main way the government uses in compensating the removal of mark-ups.

The financing of China’s healthcare system is done on a per capita allocation criterion which streams from the central government towards provinces that are known for low GDP level and from local governments (which could be county or provincial level) for provinces with high income. The package for this funding is adjusted on a yearly basis depending on the needs of each province. Moreover, the State Council Health System Office initiated by the State Council is tasked with the role of coordinating relevant ministries and departments so as to develop specific health care policies. These include remuneration and hospital payments for basic healthcare workers, annual work plans for implementation of policies for provincial governments, and ministries. The government also undertakes an annual assessment of the ministry’s performance outcome of which influences the allocation of resources, subsidies, and promotion of officials. Public health service funding and insurance schemes for social health have been expanded to cover all citizens.

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Over the years, the government has been increasing expenditure on healthcare delivery. However, this growth in expenditure only represents a third of the overall expenditure on this matter on healthcare. This means that out-of-pocket payments are still being relied on by both the government and citizens. Still, private health insurance is quite limited and the health care delivery is mainly comprised of public institutions for both outpatient and inpatient care. Nonetheless, irrespective of the negative experiences with market-based approach to healthcare from the 1990s, the central government has opted to relax regulations on foreign investment on health care. The basic characteristic of a market system is the freedom of consumers to choose what they need, from producers they like and for producers to ensure what they have met the needs of these consumers. Consequently, China reformed its healthcare policies in 2009 which has led to the establishment of four social health insurance schemes. These include the Medical Assistance Program, The New Rural Medical Cooperative Scheme, Basic Residents Insurance (UBRI), and Urban Employee Insurance (UEI). The UEI is funded jointly by employees and employers while the Urban Basic Residents Insurance (UBRI) is funded by the local and central government alongside premiums. Nonetheless, a majority of NCMS and UBRI benefit packages cover only inpatient care. According to Blumenthal and Hsiao (2015), approximately 90% of the population is covered by the existing health insurance plans with comprehensive health coverage. On the other hand, only about 30% of the population in urban areas is enrolled in private health insurance plans. Nonetheless, a major source of health care financing continues to be out-of-pocket payments-especially among migrants and those living in rural places. China also continues to focus more heavily on inpatient hospital care where a large junk of the funding (about 60%) are channeled towards inpatient care. The reforms in healthcare have seen significant expansion of ambulatory care capacit. Although citizens rely on public health facilities, most of them operate like private entities with a focus to generate profit.

The success and challenges to China’s Healthcare Delivery

Despite the increased funding and subsidies in healthcare delivery, it is noted that the depth and breadth of insurance coverage differ significantly across localities and insurance schemes. Apparently, the fragmented insurance schemes and related coverages have resulted in inequality inaccessibility, coverage, and affordability of healthcare services. In addition to these is the increased medical costs, uneven health resource allocation, cost of medical services; factors that pose significant challenges for healthcare insurance schemes. Despite improvement in the economic sphere, the improvement in China's healthcare delivery system has been too slow. In fact, some pundits say that healthcare in China has deteriorated significantly. This deterioration is majorly in terms of healthcare equity, efficiency in delivery, and the quality of healthcare. Evidently, the healthcare system in China is far behind when compared to economic growth and the increasing demand of the population.

When compared with other nations such as Sri Lanka, Australia, and Japan, the life expectancy in China has significantly slowed down. There has also been an escalation of medical costs while health outcomes have been deteriorating. This has been the same case with the relationship between patients and doctors. Due to these aspects, there have been a number of complaints from various stakeholders on the healthcare sector in China. A closer analysis of the problems facing China’s healthcare delivery system points out to the government failure as well as the market failure. The government has been unable to ensure basic healthcare needs of its people, leading to a failure of the public health system. Lack of proper regulations by the government has facilitated market failure and the focus of public hospitals to make a profit and thus increase medical costs for patients. Besides, the reduction of the budget by the government in line with the market principles has fueled reliance on out-of-pocket payments and people are now paying more from their pockets to access healthcare services.

Following the above concerns, it is crucial for the government to take into concern the quality of healthcare provided in rural areas. Though it is okay to build and improve on the facilities back at the villages, and the tiered reimbursements have worked to devolve the healthcare delivery at the community level, these are not sufficient. To improve the quality of healthcare in rural areas, the government needs to consider the use of bureaucracy and incentives to healthcare staff. This implies that more resources should be availed to physicians and appropriate medical staff. When healthcare workers are properly remunerated, this will enhance a sense of professionalism among healthcare staff the benefit of which will spread to the entire healthcare system. It is also crucial to increase coverage and healthcare funding in rural areas in a way that promotes parity and equity with urban areas. Apparently, there is an urgent need to improve the quality of care in the country as a whole alongside the necessary investments. Furthermore, the Social Insurance Law which proclaims public health as a service that should not be subjected to reimbursement has created a divide and rift between public health and public service. It is also important for the government to integrate the latest technology, deliberate on equitable reimbursement options for various healthcare facilities. In addition to these are the necessary services to count, the eligibility for the beneficiaries, the amount and quantity of reimbursements, all amidst the changing economic, social, and technological context.

Nonetheless, if China’s tiered health system is fully implemented and resources shared equitably, then the healthcare reform will have considered being duly successful. An effective and empowered tiered health care delivery system will help solve a number of issues including congestions in large hospitals. This will see patients being treated at community or primary health care centers by professionals for minor or common sicknesses. Patients at all levels can also be referred to hospitals for severe and complex disorders. In order for the tiered health care delivery system to be realized, the primary healthcare system needs to be boosted. This should not only be through the facilities but also through GPS who should be empowered due to their goal as gatekeepers. It is also crucial for the government to transform the current system which is hospital-dominated into an integrated primary-secondary health care system. With this recognition, the government of China has prioritized primary care in its 2030 strategy on its healthcare through a series of policies and programs including contracting GPs and other specialists alongside healthcare innovations. Nonetheless, the wide gaps in the quality of care, as well as the behavior of patients to seek help from public large hospitals, makes the implementation of a tiered health care delivery system to be a complicated program.

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