Abstract
This study discusses issues related to the traditional and new health care systems in China. The driving force behind the traditional health care system was an uncontrollable increase in costs paid by the government. The new health care system requires both the individual and enterprises (private and state-owned) to contribute to their plan by establishing individual and hospital accounts, which appear to be effective in controlling medical care expenses. One unintended result is that the new system suppresses the demand of part-time workers (lowincome group) for hospital services. Policymakers, in revising urban health care plans, should seriously consider varying the upfront standard fees (deduction) borne by patients because low-income groups may not be able to afford them.
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