China’s New Rural Cooperative Medical Scheme (NRCMS) has come "a long way" since its launch years ago, but further medium- and long-term reforms are needed in order to improve health care in rural China, according to the World Bank.
"The amount of money going into the scheme, the amount of people covered in the scheme have both dramatically increased," Adam Wagstaff, World Bank health economist and the lead author of a newly-released study on rural health care reform in China, told reporters in Beijing.
The NRCMS, launched in 2003, was one of the key reforms of China’s rural health care system undertaken after the collapse of government-run health insurance in rural areas during the 1980s. The voluntary scheme was available in 86% of China’s counties by the end of 2007, compared to 21.7% at the end of 2005.
China in April announced an ambitious US$123 billion reform of its health care system that sought to provide of basic health insurance coverage to 90% of its population by 2012, as well as expand and upgrade its network of hospitals, primary care facilities and rural medical clinics. The central government chose to issue broad n – some say vague – goals while tasking local governments to experiment with reforms on the grassroots level.
A recent International Monetary Fund (IMF) report on China’s economy lauded Beijing’s attempts to reform its public health care system, and brokerage CLSA noted in a recent research note that spending on health care had increased by 40% year-on-year in the first half of 2009, compared to 37% for 2008 as a whole.
The challenge currently facing the NRCMS is one experienced by health insurers across the globe: delivering high quality treatment at an appropriate price.
To this end, the scheme must evolve from being a simple payer of bills to a "more strategic purchaser of services" that aggressively contracts with health care providers to drive down costs and ensure that medical treatment is effective, Wagstaff said.
Reining in high out-of-pocket expenses for medical treatment has emerged as one of the most pressing issues facing a medical system in which hospitals operate on a fee-for-service business model – a system that leads to overtreatment and the prescription of costly, and sometimes unnecessary, medications.
The World Bank said that China must ultimately move away from its fee-for-service payment model to reduce out-of-pocket expenses. In the longer-term, it recommends the adoption of a tax-based financing system for health care that would provide the option of voluntary top-ups for greater benefits and coverage.
Wagstaff said that despite the considerable challenges facing the rural health care reform in China, the country’s flexibility in finding solutions in a country with diverse needs is cause for some optimism.
"My sense is the commitment is there, the commitment to funding is there, and also the interest in exploring different ideas is also there. So I think the prospects for public health, preventive health care, primary health care are very good at the moment in China," he said.
For more on China’s health care reform, read the May issue cover story in China Economic Review.