Transformation of China's rural health care financing

Abstract

In the late 1970s China launched its agricultural reforms which initiated a decade of continued economic growth and significant transformation of the Chinese society. The agricultural reforms altered the peasants' incentives, weakened community organization and lessened the central government's control over local communities. These changes largely caused the collapse of the widely acclaimed rural cooperative medical system in China. Consequently China experienced a decreased supply of rural health workers, increased burden of illnesses, disintegration of the three tier medical system, reduced primary health care, and an increased demand for hospital medical services. More than ten years have elapsed since China changed its agricultural economic system and China is still struggling to find an equitable, efficient and sustainable way of financing and organizing its rural health services. The Chinese experiences provided several important lessons for other nations: there is a need to understand the limits of the market forces and to redefine the role of the government in rural health care under a market economy; community participation in and control of local health financing schemes is essential in developing a sustainable rural health system; the rural health system needs to be dynamic, rather than static, to keep pace with changing demand and needs of the population.