Before the founding of People’s Republic of China in 1949, life expectancy of people in China was 35 years, infant mortality was at 200%, maternal mortality at 15%, and there was almost no public health system to speak of. Since its establishment in 1949, the public healthcare system has been providing public health services free of charge. In addition, tripartite medical care systems have been set up, including the: (1) Labour Medical Care System, which caters free medical care to workers/staff members at state-owned factories; (2) Public Medical Care System, which offers free medical care to civil servants/staff members working for the government, teachers/professors/staff of public schools or universities, scientists/staff of institutes/academies, etc; and (3) Rural Cooperative Medical Care System, with its team of barefoot doctors who have been, since 1968, providing primary care to people in rural areas—by the end of the 1970s, they reached near 90% coverage of the overall rural population in China. By 1970, life expectancy had increased to 68 years and infant mortality decreased to 34.7%. New China used only 1% of world health resources to provide healthcare for 22% of the world’s population (Liu 2008; Zhang 2011; Zhong 2011; Shang 2013; Zheng 2013). For its success in the rural healthcare system, China was praised as a model for developing countries. In 2005, WHO’s Assistant Director-General Dr. Tejada de Rivero said, when recalling the Alma-Ata conference in 1978 where the first goal was the attainment of Health for All through primary healthcare: “China’s barefoot doctors, young recruits sent to rural areas to educate people about health and provide basic treatment, were a major inspiration to the primary health care movement” (Bulletin of WHO 2008). [End Page 108]
However, in the 1980s, the tripartite medical care system was in dire straits. It was no longer affordable and the labour medical care system and rural cooperative medical care system collapsed successively, only preserving the public medical care system for civil servants and staff members at state-owned institutions (hospitals, research institutes, schools, universities, etc). Under free medical care coverage, the following occurred: demand was always growing beyond practical needs, and way beyond provision; free medical care also led to undue consumption and wastage; a huge number of factory workers were laid off as a result of economic reforms or factory bankruptcy; the lands of villagers were lent to individual farmers, and the collective system (People’s Communes) collapsed; while after the end of the Cultural Revolution, the state economy was on the edge of bankruptcy.
In the 1980s, the government accepted suggestions from economists and launched the first round of healthcare reforms. The rationale of this reform involved the government withdrawing from healthcare and turning it over to the markets. Public hospitals were permitted to “nurture hospitals with medicine sales (yi yao yang yi)”. The consequences of the first round of healthcare reforms were devastating.
The Third National Survey on Health Care Services (Ministry of Health 2004), reported that the coverage of medical care in urban and rural areas steadily decreased, as follows:
|Medical care coverage in urban areas||70.9%||49.8%||43.0%|
|Medical care coverage in rural areas||5.8%||4.7%||3.1%|
The Survey also reported that 48.9 per cent of Chinese did not see a doctor when they fell ill, and 29.6 per cent who would have been admitted to a hospital under the earlier system were not in the new system. This survey also showed that in 2000–2004, average incomes increased by 8.9 per cent in urban areas and 2.4 per cent in rural areas, while healthcare costs increased by 13.5 and 11.8 per cent, respectively (Ministry of Health 2004). According to China’s Health Care Statistics Summary (Ministry of Health 2005), between 1980 and 2003, among the total healthcare payouts, the percentage paid by the government decreased from 36.2 to 17.2 per cent; workplace payments decreased from 42.6 to 27.3 per cent; but individual payments dramatically...