Home |  Elder Rights |  Health |  Pension Watch |  Rural Aging |  Armed Conflict |  Aging Watch at the UN  

Mission  |  Contact Us  |  Internships  |  Donate Now!  

back

Old Medicare System Ends

By: Unknown
China Daily, April 13, 2001

Since April 1, China's public-funded medical care system for urban employees, has gradually been eased out in Beijing. After 50 years of service, it is giving way to a new medical insurance scheme.

Millions of Beijing residents who enjoyed almost free medical treatment, will now have to cover part of their medical expenses themselves.

This is the reason people were rushing to see physicians in major hospitals in Beijing before April, and why the number of patients suddenly shrank when April arrived.

Similar situations also occurred in many other big cities, such as Kunming and Changchun, which have also been preparing to initiate the medical reform. In waves of panic people impulsively bought medicine and got general check-ups, and surgery waiting lists soared as April approached.

For urban employees, free medical care is what they want. But in China, having such a huge population base and skyrocketing medical expenses, the old public-funded health care system, which was formed half a century ago, has become utopian in recent years.

Besides which, the scheme was inefficient because of its multiple loopholes.

There were many cases of entire families getting medical care by making appointments under the name of the one member of the family who was entitled to enjoy public-funded medical care.

As the old health system placed no limit on medical expenditure, many people who were entitled to free and government-paid care sought expensive and unnecessary treatments.

And to get kickbacks, doctors prescribed more medicine than the dosage needed.

Some patients then went on to sell the extra medicine they got from the hospital onto the black market, leading to a boom in small illegal pharmacies.

Meantime, many employees from poorly-managed enterprises could not afford even basic medical services as their employers were unable to foot the bills.

The result of these flaws was a huge waste of medical resources. And they explain, in part, why medical care expenses have kept rising in recent years.

According to media reports, the total medical expenses of the nation's employees hit 77.4 billion yuan (US$9.3 billion) in 1997 as compared with 2.8 billion yuan (US$338 million) in 1978. Since mid 1990s, the figure has increased at an annual rate of 12-18 per cent, which far exceeds China's GDP growth rate.

To feed this irrational and inefficient medical care system, both enterprises and the State have had to plough large amounts of money into the system every year. The financial strain of these payments are a heavy burden on many enterprises.

Beijing's newly-crafted health care package, as part of the national campaign to retool the medical system, is a timely measure.

Since the central government phased in guidelines for medical reform in 1998, more than 100 cities, including Shenzhen and Shanghai, had launched the medical insurance reform before the end of last year.

The reform packages vary among regions, but the theme is the same. It is to build a new pay mechanism, among which employers, employees and the government share medical expenses. The advantage of this system is clear: more people enjoy medical treatment.

Under the scheme, an individual account, contributed to by both employees and employers, is established to pay for basic medical treatment, including emergency services. When accumulated medical expenses, within one year, exceed 2,000 yuan (US$240), an employed individual shall pay half of the excess himself, while the other half is covered by a collective fund.

For the seriously ill, whose expenses may be very high, and especially for the municipality's senior citizens and unemployed, there are also auxiliary regulations such as the "large-sum medical expenditure mutual aid fund."

The scheme, which is poised to be fully operational in three to five years, will cover almost 200 million people, 60 million more than the old public-funded health care system catered for.

Those who enjoyed free medical treatment in the past, may feel less secure with the new situation, but it is for the better. They will benefit from the scheme in the long run.

Patients aside, the programme will prompt physicians and hospitals to take costs into consideration when making medical decisions.

In the past, people who enjoyed public-funded medical treatment have had little choice in hospitals. Because medical expenditure is covered by their employers or government, they did not care about the costs.

With the new scheme, patients will become more price-conscious and hospitals will be compelled to provide quality services and reasonable prices to attract patients in the face of increasingly fierce competition.

As a result, high medicine and treatment prices are expected to be held down.

As a follow-up support measure for the health care reform, the government is unfolding further reform of the medical and health system. The system aims to establish a competition mechanism among hospitals and keep the rapid growth of medical expenses at bay.

Such measures will also ease the financial burden on patients.

However, the rush to hospitals attests to the public concern over the future medical care system.

It is in the government's interest to try and dispel people's doubts and placate their worries.

The government should strive for a practical and patient-friendly health care insurance system. Otherwise, the possibility that people will refuse to see doctors for fear of costs and to their own detriment, can not be ruled out.