Moving towards universal health insurance in China: Performance, issues and lessons from Thailand
Highlights
► Contributes to an improved understanding of China’s medical insurance system. ► Addresses the issues challenging China as it moves towards universal coverage. ► Focuses in particular on the reform experience in Thailand. ► Policy implications for further reform in China are articulated.
Introduction
As the largest developing country in the world, China has been facing substantial challenges to serve its population of 1.3 billion with equitable, affordable and high-quality health services over the past several decades. The performance of the Chinese health system, and the reforms that have been implemented, have attracted broad and intense interest worldwide. China’s health system, once revered by other countries in the early decades after the founding of the People’s Republic of China, has increasingly been criticized for its poor efficiency in health care delivery, inequity in utilization and access to health services, and cost escalation (Eggleston et al., 2008, Wagstaff et al., 2009). Specifically, health care has become a leading and serious national concern. The general public has expressed its discontent with unaffordable access and medical impoverishment through thousands of organized protests throughout the country, receiving frequent media attention (Yip & Hsiao, 2008). With the failures of past reforms and the present policy goals of building a harmonious society, the Chinese government has recognized its responsibility to address these concerns and is launching a new wave of health system reform.
The performance of the health insurance system, which dominates health care financing and payment in China, deserves greater attention in the current context. Through a number of difficult reforms and policy changes in the past decades, China’s basic social medical insurance system, which includes the Urban Employee Basic Medical Insurance system (UEBMI), the New Rural Cooperative Medical System (NRCMS) and the Urban Resident Basic Medical Insurance system (URBMI), has been developed and is expanding rapidly. Although commercial medical insurance exists, it still accounts for a small proportion of the population covered and is purchased mainly by the upper echelon population at present (Wang, 2009). Under the new health plan announced in April 2009, the Chinese government promulgated the goal of achieving universal insurance coverage by the basic social medical insurance system by 2011 (Chen, 2009).
Although China’s basic social medical insurance system nominally covers everyone across the country and is moving towards realization of the objective of universal insurance coverage, the performance of this system needs to be carefully considered and critically evaluated. On the basis of such an appraisal, the intrinsic strengths and weaknesses in institutional design and possible initiatives for further reform of the system can be identified. The experiences of health insurance system reform in other countries may also present useful insights for China’s ongoing reform. As an example, Thailand has made impressive strides towards universal coverage, sparking considerable interest worldwide and potentially providing lessons for China (Tangcharoensathien, Prakongsai, Limwattananon, Patcharanarumol, & Jongudomsuk, 2007).
This paper first appraises the performance of China’s social medical insurance system using available scholarly literature and relevant data from the official web pages of the government, thereby elucidating the current issues confronting the system. The paper employs an analytical framework that has been widely adopted for assessing health care financing mechanisms, first proposed by World Health Organization (WHO) in its evaluation of the world’s health systems in 2000 (WHO, 2000). The framework focuses on four key functions that a financing mechanism must perform: revenue collection, risk pooling, the design of the benefit package, and provider payment mechanisms. The paper then examines the health insurance reform experiences in Thailand with respect to the objective of universal coverage and attempts to draw out some lessons for China, taking into account China’s practical context.
Section snippets
Revenue collection
UEBMI is an employment-based compulsory medical insurance program designed for urban employees from the public and private sectors and financed jointly by employers and employees from payroll tax. The guideline established by State Council suggests premium contributions by employers and employees be set at 6% and 2% of an employee’s salary, respectively. Total premium revenue is distributed into two different accounts, namely a Medical Savings Account (MSA) and a Social Pooling Account (SPA),
Potential challenges to universal coverage
Under current health insurance arrangements in China, every citizen across the country should be covered in principle. However, special attention should be drawn to urban informal sector workers. With the changing economic structure and accelerating urbanization in China, the fraction of the population accounted for by urban informal sector workers has been increasing and reached approximately 40% of the urban population by late 2007 (Ministry of Human Resource and Social Security and National
Lessons and policy implications from a comparative perspective
Health financing and insurance reform is a systematic, long-term challenge which is not unique to China but rather confronts many other countries. The successful experiences from other countries, especially developing countries, may provide invaluable lessons for China. Thailand has implemented health insurance reform aimed at achieving universal coverage in the past decade and has achieved its policy objectives of improving the equity and efficiency of its health system with sustainable health
Conclusions
This paper contributes to a critical evaluation and improved understanding of the present performance of China’s basic social medical insurance system. Following an illumination of the current issues challenging China on its path towards universal coverage, the useful lessons for China provided by experiences in Thailand have been addressed. With the strong political will and powerful mobilization capability of the Chinese government, the realization of universal insurance coverage within the
Acknowledgments
The authors are grateful to the financial support from Natural Science Foundation of China (grant numbers 70873131) and State Scholarship Council for this research. The authors also would like to acknowledge Dr Jie Tang, Dr Yuhua Shi and other anonymous reviewers for their helpful comments on the early version of this paper.
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