Abstract

Health care reform in China is at a crossroads. The moral and policy challenges of improving the equity, quality and sustainability of the country’s health system are pressing. The health of the society is declining and the voice of discontent is rising. Should China develop a market-based health care system with private hospitals and physicians in private practice, and in which health care services must increasingly be paid by those who consume them? Or should China adopt the social democratic model and establish a health care which provides free basic health care as a right for all citizens? There are evidences that market forces have made the health system generally much more receptive to change and innovation in China in the recent years. This has created a wider range and better quality of service, while also bringing about more choice and greater dynamism in the system. But at the same time, the market law of demand and supply is excluding millions of Chinese people from access to basic health care (China Development Review, 2005). The Chinese health care system was ranked 188 out of 191 countries in terms of distributional and financial equity in the 2000 WHO report. In terms of overall health achievement, China ranked 144. In 2003, less that half of the urban inhabitants were covered by medical insurance (see Qiu in this volume). At the same time, the profit principle is also undermining the medical ethics which defines the patient–physician relationship. The lack of effective regulation of the health care market have led to serious abuses such as bribes for better services, improper use or over-use of drugs and technological interventions, issues of cost control and rapid increase in spending of health care. Increasingly health care is being turned into an exchange commodity, while its social purpose and welfare function are being eroded. In fact there are growing concerns that the growth of private sector in healthcare provision may lead to rapid cost escalation, reduced equity, and poor quality or inappropriate health care (Bennett, McPake, & Mills, 1997; Benson, 2001; Berman, 1997; Chakraborty & Frick, 2002). These concerns raise serious questions

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