China Health Reform Program

closed

Closed

The objective of the Health Reform Program-for-Results Project for China is to improve the quality of healthcare services and the efficiency of the healthcare delivery systems in Anhui and Fujian provinces. China has made impressive gains in improving overall health outcomes in past decades, along with its rapid economic development. In 2009, China unveiled an ambitious national health care reform program with the goal of providing affordable, equitable and effective health care for all by 2020. The government defined comprehensive reforms in five priority areas: basic health insurance, health service delivery at grassroots level, essential public health service, an essential drugs program, and public hospital reform. After seven years of implementation, China has achieved near universal health insurance (HI) coverage at a speed that has few precedents globally or historically. Health insurance historically mainly covered inpatient services, and hospitals were paid by insurance through a fee for service system. Service providers therefore were incentivized to produce more, often unnecessary services, driving up investment and recurrent cost, and sometimes endangering human life. China now has more hospital beds per capita than the USA, Canada or the UK, and hospital services account for 54 percent of China’s total health expenditure compared to less than 10 percent for primary care. Average lengths of hospital stays, a key driver of costs, is high in China relative to OECD countries (9.8 days compared to 7.3 days). As a result, total spending on health increased fourteen-fold in the last two decades from about 220 billion yuan to 3,170 billion yuan in real terms, raising affordability and sustainability concerns. At the same time, human resource shortages and poor capacity at the grassroots have weakened the delivery of primary healthcare services. China faces a massive shortage of general practitioners (GPs) and nurses, and the primary health care (PHC) workforce declined from 40 percent of total workforce in 2009 to 36 percent in 2013. Integration of health services across provider tiers (e.g., tertiary, secondary and primary) and between preventive and curative services is weak. Providers at different levels have an incentive to compete with each other in order to maximize their revenues, rather than managing population health in a coordinated and cost-effective manner. Weak primary care systems, poor provider integration and a lack of gate keeping and screening systems have contributed to premature mortality due to NCDs in China being almost double that of Japan. Finally, insufficient coordination among institutional actors is a major impediment to innovation and sustained reform implementation in the health sector. There are over ten government agencies involved in the decision-making and administration of the health sector, all the way down to the provincial and local levels, which constrains coordinated and coherent policy formulation and implementation.

FY17 - Health

World Bank Group

Project

Hospital, Government