This story was written by the ILO Newsroom For official ILO statements and speeches, please visit our “Statements and Speeches” section.

China’s latest revolution: Basic health care for all

On 6 April 2009, China unveiled an action plan for a radical and ambitious health-care reform aimed at attaining universal health insurance coverage by 2020. Three years later, the country has almost reached this goal. What’s the secret behind the success?

Feature | 03 September 2012

The new system is aimed especially at people with no resources, no ability to work and no one to support them (the so-called “Three No” people). It also entitles them to equal access to basic health care.
photo © Kevin Shoenmakers
BEIJING (ILO news) – In a little over three years, China has managed to extend basic health-care access to more than 95 per cent of its 1.35 billion population.

“This was mainly done by extending health insurance coverage and improving access to reformed and reinforced health-care facilities and services nationwide”, said Aidi Hu, a Senior social security expert from China, who works for the ILO.

The aim of the reform – which had a total cost of 850 billion Chinese Yuan (CNY) or about 133.5 billion US-dollars – was to achieve universal health-care coverage for the entire population by 2020. However, the scope and pace of changes seem more akin to a revolution than a reform.

Only a decade back, health insurance coverage was mainly for those working in urban areas under a formal employer-employee relationship. In 2003 and again in 2007, the government launched two schemes to extend coverage to rural populations and to non-working urban residents. First, the health-care budget was increased by 30 per cent each year between 2008 and 2011. A large proportion of these resources were invested in staff training and enhancement of local health services.

The government also invested CNY 63 billion in rural areas to support the construction or improvement of over 2,200 county-level hospitals, some 6,200 central township clinics and 25,000 village clinics. CNY 4.15 billion was also invested in urban areas to support the construction and improvement of almost 2,400 community health-care centres.

The government also provided technical assistance to 127 training centres where 36, 000 health-care staff received training as general practitioners. More than 10,000 medical students were admitted by various medical colleges for training - free of charge. These students went on to work in township clinics in the less-developed central and western regions of China.

In addition, basic medicines are now sold at the same price across the country.This practice prevents hospitals from overcharging its patients. Pharmaceutical companies were also asked to start bidding for contracts, which led to a 30 per cent reduction in the price of basic medicines.

Helping the “Three No” people

The new system is aimed especially at people with no resources, no ability to work and no one to support them (the so-called “Three No” people). It also entitles them to equal access to basic health care.

The old system was unaffordable for most rural and non-working urban residents, as well as for old and disabled people. Local governments now fully cover the individual health-insurance contributions of the latter group.

The rapid extension of health insurance in China can also be attributed to the 2010 Social Insurance Law, to which the ILO provided technical assistance.

“Due to the extension of health insurance in the most populous country in the world, the global social security gap has been significantly reduced”, said Hu.

“The Chinese experience shows that political will and financial commitments play a key role in extending health insurance schemes to vulnerable social groups. It can serve as an example for good practice to other countries in a similar situation”, concluded Hu.

But the ILO expert cautions that “some insured people – despite receiving government subsidies – are still unable to benefit from coverage as they still bear an important part of the costs for medical treatment and have limited access to good-quality health services. This is particularly true for the rural areas, where there are only 1.32 health workers per 1,000 people, compared to more than 8 and 20 per 1,000 in Brazil and Switzerland, respectively”.

Another challenge is China’s rapidly ageing population. The share of the population aged 65 years and older will increase from 8 per cent today (about 100 million) to about 14 per cent in 2025 (some 200 million). The number of frail and sick elderly people will increase accordingly and with it, the costs for the health insurance system.

A new partnership agreement between the ILO and China was signed in June 2012. Under the agreement, the ILO and China will work more closely together. This partnership will also extend to the field of social insurance, thus contributing to the extension of social security worldwide.