Privatization of the medical market in socialist China: A historical approach

Abstract

A Socialist-Market Economy was defined as a target model for China's economic reform by China's 14th National Congress in 1992. Such an innovative change in China's more than a decade long economic reform has brought both new challenges and opportunities for its health care system reform as it moves toward a market determination mechanism and involvement of the private sector. A better understanding of the nature and history of the Chinese private medical market and its dynamic socio-economic environment would certainly shed a great deal of light onto the accomplishments of the health care reform. Research in this area, however, is almost non-existent at either national or international levels. The present study attempts to fill this gap by providing a comprehensive assessment of both historical and prospective development of the Chinese private medical market. Three stages are defined to present the tortuous development of this market over the last four decades, coupled with our critiques of the underlying merits and problems. Predictions are also made on the future perspective of the private market, and its possible impact and role in shaping the reform of the entire Chinese health care system. The government's role as well as its future strategy to cope with the issues surrounding Chinese health care reform are also summarized. The study concludes with five health policy recommendations aimed at facilitating China's health care reform via more market-oriented determination of resources allocation, production, and distribution, coupled with promotion of the private sector's involvement while minimizing its potential adverse side effects.