Public Policy in Chinese and Indian Public Hospitals

BY JING (SARAH) SHEN

China

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Emergency entrance to a hospital in Beijing. Source: Michael Coghlan, Flickr.

The Chinese public hospital system is widely influenced by its federal policy towards healthcare. With shifts in policy in the past century, the country rapidly reformed its healthcare system . In the 20th century China’s economy underwent drastic changes from being a centrally planned, command economy to a capitalist, market-based economy. Although this transition resulted in unprecedented economic growth, the radical change to a decentralized, market-based public healthcare system led to inadequate healthcare.1 During Mao’s era in the mid 1900s, China’s public health system operated under a federally funded “cooperative medical scheme”2 that provided basic medical treatment through local facilities. Since the government owned and operated the public health industry, people did not require medical insurance and the system was relatively successful in improving public health, as “China’s infant mortality rate fell from 200 to 34 per 1000 live births between 1952 and 1982.”3 However, as China moved away from a centralized to a market-based economy in the 1980s, hospitals began to implement user fees in response to declining public funding, and overall medical insurance rates dropped nationwide. A change in economic policy thus completely reshaped China’s healthcare system. As a result, many public health issues continued to plague the public. Public policy’s shift to private consumption and a drop in medical funding drove hospitals to function as “for-profit entities.”4 Such a capitalist mindset directly resulted in the negative view of the public toward the Chinese healthcare system in the 2000s.

“看病难,看病贵,”5 is a popular expression that laments limited accessibility and expensive medical treatment. The first part of the expression, “看病难” emphasizes that medical care is inaccessible to the public and points to the inability of the Chinese healthcare system to meet the growing medical needs of its large, aging population. China’s 6th population census, conducted in 2010, reported the nation’s population as 1.3387 billion, 6 an unprecedentedly large number of people in need of medical health services. To heighten the strain that such a large population imposes on its nation’s healthcare system, the United Nations approximated that “one third of China’s population, or 438 million, would be over 60 by 2050.”7 This means that a third of the country is at high risk for medical diseases and will rely on government-provided health insurance to receive medical attention. The Chinese healthcare system, however, lacks appropriate primary care facilities, and thus public hospitals shoulder the brunt of the population’s medical needs. The public’s lack of trust in community clinics to address primary medical needs8 forces secondary and tertiary care facilities to address the majority of outpatient visits, including first-contact care and relatively minor conditions that can be treated at primary care facilities. With public hospitals being the dominant secondary and tertiary care providers in China,9 around 90% of inpatient and outpatient care is addressed through large urban public hospitals. As a result of the large population and overload of patients at public hospitals, an average urban Chinese public hospital, such as the Peking Union Medical College Hospital, receives a staggering 12,000 patients per day with only 2000 beds and 685 doctors available.10 Additionally, given the extremely high number of patients that require public hospital doctors, the quality of patient care is low: an average patient consultation lasts only around 5-7 minutes.11 Urban Chinese public hospitals are to become the target destination for swarms of additional rural patients due to the disparity of medical facilities in rural and urban areas. Rural residents seek out large public hospitals in cities due to the inaccessibility of higher quality medical equipment and personnel locally. The additional patient population ultimately compounds even more stress on an already overwhelmed urban public hospital system. The inability of urban public hospitals to meet the population’s growing demands is thus one of the most formidable challenges faced by the Chinese healthcare system.

The shortage in the Chinese urban public hospital system, due to large discrepancies between supply and demand, directly relates to “看病难”, the latter part of the expression quoted earlier. These words lament the inaccessibility of medical care by the public and draw attention to other issues affecting the standard of medical treatment and the price that patients are charged.

Decentralization caused the Chinese government to withdraw large amounts of funding from public hospitals and plant the seed for monetary challenges that the system faced for decades later. Furthermore, decentralization left 51% of the urban population uninsured in 199912 and a staggering 93% of the population uninsured in rural areas.13 Due to the relatively limited market for commercial insurance in China between the 1980s and early 2000s, the majority of medical expenses were not paid through private spending or private insurance, but through “out-of-pocket” spending directly from patients.14 Hence, the public not only deemed medical care in China inaccessible, but also lamented the costliness of basic medical treatment.15 According to the National Bureau of Statistics, China spent only 5.6% of its GDP on healthcare in 2003,16 a modest sum compared to most Western countries’ 10% and higher expenditure.17 In consequence, government and social health expenditure reached a historic low during the early 2000s. Public and private nonprofit funding amounted to only about 40% of total health expenditure and private, out-of-pocket spending spiked to an unprecedented 60%.18 As a consequence of scarce government funding, the medical staff in urban Chinese public hospitals is severely underpaid and forced to divert attention away from exclusively caring for patients in order to seek alternative payments. Practicing physicians in Chinese public hospitals have become reliant on prescribing expensive drugs and imaging services, as well as charging patients with side payments known as “red pocket” bribes, to earn additional income.19 According to statistics given by the Ministry of Health, public hospitals in China generate 49% of their income from medical treatments and 42% of their income from drug sale profits.20 The China National Health Development and Research Center reported that in 2008, hospital profits in selling pharmaceutical drugs reached a high of 57 billion RMB.23 This statistic fully demonstrates the disproportionality of the income structure of Chinese public hospitals and the detriment of replacing patient care with profit as the priority. Physicians are driven to overprescribe drugs and order unnecessary medical tests to gain more profit, ultimately resulting in soaring out-of-pocket medical expenses for the largely uninsured Chinese patients.22

Moreover, “ticket fenders,” often referred to as “ticket scalpers,” have also contributed to the high cost and low accessibility of medical services in China. In the Chinese public hospital system, patients who wish to see a senior physician or require immediate medical treatment usually queue up in lines for a consultation in a process similar to waiting for a table at restaurants. “Ticket scalpers” often queue up in lines and purchase multiple consultations in order to buy out consultations for the day. Cutting off the public’s access to daily consultations, scalpers then tout tickets back to patients at marked up prices of around 200% from the original price of 14 RMB to 300 RMB.23 Additionally, loopholes in the system often remain unaddressed for prolonged periods. Reforms in the healthcare system are widely impeded by the tendency of Chinese medical centers to employ political appointees as heads instead of professionally trained managers or medical professionals.24

 

India

SMS Hospital, Jaipur, India.

SMS Hospital, Jaipur, India. Source: Asian Development Bank.

Similar to China, India is a developing nation struggling to meet the medical needs of its vast population with a critical lack of resources and wavering shifts in policy. According to the World Health Organization, India’s population was estimated at approximately 1,252,140,000 people in 2013.25 As one of the world’s most populous nations, India’s healthcare system faces challenges similar, if not more severe, to those faced by the Chinese healthcare system. As in China, India’s population is large and increasingly aging. By 2050, 20% of India’s population is estimated to be elderly, a statistic that alludes to the impending increase of medical demands by a fifth of the nation’s population.26 Meanwhile, “less than 15% of the population in India has any kind of healthcare cover, be it community insurance, employers’ expenditure, social insurance etc.,” noted a July 2009 report by the Federation of Indian Chambers of Commerce and Industry.27 Such low coverage percentages directly correlate with the people’s lack of access to medical services.

In contrast to China’s predominantly public healthcare system, India’s healthcare system is composed of a combination of public and private services regulated by the local, autonomous state government rather than the centralized federal government. Hence, although the private sector plays a prevalent role in India’s healthcare system, both public and private insurances prove faulty in providing extensive coverage.

Moreover, regional governing differences impede the Ministry of Health’s efforts to nationally standardize the cost and quality of medical services.28 Like China’s healthcare system, India’s suffers from severe deprivation of public funding; government expenditure on healthcare amounted to only about 1% of India’s national GDP in 2011.29 Not only is a miniscule amount of federal funding allocated to healthcare, but the government’s mere 33% contribution to total individual healthcare expenditure places the burden of medical costs mainly on patients. India’s high out-of-pocket spending supports such claims, as the country’s out-of-pocket spending rate equated to around 86% of private healthcare spending in 2012 according to WHO.30 India’s low public health expenditures thus result in critically underpaid staff and overcrowded public hospitals. The disparity between the large national population and scarce number of physicians has resulted in a rate of 0.7 doctors per thousand patients, even lower than China’s 1.9 and far lower than the U.S.’s 2.5.31 An average consultation in India’s public hospital system lasts a mere 1.5 minutes.32 Operating under such overwhelming conditions, public hospitals frequently fail to deliver quality medical treatment to the public, with serious conditions being treated correctly less than 40% of the time and correct diagnoses given less than 15% of the total.33

 

Challenges Faced by Both Systems

While both India and China’s healthcare systems face the formidable challenge of low government funding and high patient populations, India’s public hospital system suffers more acutely from a deficiency of medical practitioners and health infrastructure. With China’s most recent healthcare policy reform – the Healthy China 2020 program launched in 2008 – China’s healthcare system is working to provide equal access to public healthcare for all its citizens by 2020.34 Meanwhile, India’s federal government has not yet made any significant movements towards providing basic medical insurance to all urban and rural residents to improve nationwide accessibility to basic healthcare facilities or reduce the costs of medical services and pharmaceutical drugs.35 The primary deterrent in India’s healthcare policy reform is the decentralized regulation of medical facilities by state governments instead of the federal government. As a result, public versus private predominance over healthcare facilities in India varies among the different regions. Such discrepancy makes universal access to healthcare strenuous, as the federal government cannot effectively implement all-citizen public healthcare, while patients uninvolved in traditional employment lack access to private, company insurance.36 However, even without the issue of insurance coverage or payment, access to healthcare in India is daunting due to the country’s extreme lack of health infrastructure. In the US, a country sizably smaller than India, there is on average 1 bed for every 350 patients, yet India only has about 1 bed for 1,050 patients.37 To match the bed availability standard of more developed nations, India must add 100,000 beds, which would require at least an additional $50 billion investment in infrastructure.38

Such paucity in basic health infrastructure directly contributes to the public’s inaccessibility to Indian healthcare, as does the unbalanced concentration of medical infrastructure and professionals in urban and rural areas. As in China, the healthcare sector in India primarily focuses on urban communities even though the majority of the population resides in rural areas; there is therefore a critical disconnect between India’s supply and demand of medical services. 73% of India’s population lives in rural areas but has access to only 20% of the nation’s healthcare facilities.39 In addition, according to studies conducted by the International Monetary Fund, “the majority of care in both the public and private sector [is] provided by people without formal medical training,”40 a trend that reflects the unwillingness of private medical professionals to practice in rural areas and the overwhelming patient flow that urban public hospitals must attend to.

Furthermore, as a result of the severe poverty that permeates both urban and rural regions, most patients are unable to afford private medical treatment and overload urban public hospitals since rural public health services are often secondary in quality. Yet, the starved public health sector and underfunded public hospital system in India are ill-equipped to address the nation’s extensive disease burden: a combination of lingering communicable diseases, and emerging non-communicable and infectious diseases. As reported by The World Bank in 2011, approximately 21.3% of India’s population is living below the international poverty line.41 Since a significant portion of India continues to suffer from poverty, large portions of the population reside in shantytowns or slums with poor living conditions and deleterious levels of sanitation, clean water access and so on. Dharavi, Asia’s second largest slum, is located in the heart of Mumbai, where one million people reside on just one square mile of former swampland; the population density 11 times higher than Mumbai’s.42 Dharavi and other impoverished communities pose a formidable burden on India’s urban public hospitals. Poor people living in detrimental conditions and close proximity are highly susceptible to infectious diseases and therefore further exert strain on government-funded medical facilities. The Indian population is widely plagued by infectious diseases, as India has nearly 1.9 million cases of Tuberculosis, 2.5 million cases of HIV, and over 1.5 million cases of malaria every year.43

India’s rapid urbanization has also resulted in increasing rates of non-communicable diseases that are mostly the products of lifestyle and dietary changes. An example of such a trend is the staggering number of diabetics – more than 65 million Indians suffer from diabetes.44 The high mortality rates resulting from non-communicable diseases accounted for 53% of India’s total deaths in 2010, and exhaustion of medical resources by chronic, lifestyle diseases is a strenuous challenge that the underfunded Indian public healthcare system cannot adequately address.45

Overall, both the Chinese and Indian healthcare systems face similar sets of challenges. Both need to provide medical services to large, increasingly geriatric and predominantly destitute populations despite a lack of public funding, infrastructure, and disproportionately distributed healthcare facilities. While China’s healthcare system is mainly public, India has a mix of private and public sectors. Both systems suffer from underpaid medical staff and overcrowded urban hospitals. Additionally, in both countries, quality healthcare facilities are disproportionately concentrated in urban areas, which forces urban hospitals to address the majority of medical needs. An overload of patients drives down the quality of medical treatment in both countries, as average consultation times are inadequately short and doctor-to-patient ratios are well below those of developed countries. Moreover, both countries face formidable challenges in reforming their healthcare systems because many highly placed health officials are political appointees in China and the state-governed healthcare system in India disputes standardized federal regulation. However, China’s newly implemented Healthy China 2020 healthcare reform policy has endeavored to give universal access to public healthcare with over 90% health insurance coverage. Yet, the public hospital system continues to be underfunded, which drives physicians and hospitals to prioritize profit from expensive pharmaceuticals and medical services above patient care. Meanwhile, India has yet to make public initiatives to effectively address the country’s growing burden of non-communicable and infectious diseases. While both countries struggle to provide basic healthcare to large, mainly impoverished patient groups, China has managed to successfully offer insurance coverage to the majority of its citizens while the public and private healthcare sectors in India must cooperate more effectively to achieve such a goal.

Jing (Sarah) Shen is currently a senior at Milton Academy from Beijing, China. She can be reached at jing_shen17@milton.edu. Sarah would also like to acknowledge the guidance she received from Dr. Roger Worthington.

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References:

1 Yip, W., & Hsiao, W. C. (2008, March). The chinese health system at A crossroads. Retrieved march 6, 2016, from Health Affairs website: http://content.healthaffairs.org/content/27/2/460.full

2 Eggleston, K. (2012, January 9). Health care for 1.3 billion: An overview of china’s health system. In Asia health policy program (pp. 1-28). Retrieved March 7, 2016, from http://iis-db.stanford.edu/pubs/23668/AHPPwp_28.pdf

3 Blumenthal, D., & Hsiao, W. (2015, April 2). Lessons from the east — China’s rapidly evolving health care system. The New England Journal of Medicine.

4 Blumenthal, D., & Hsiao, W. (2015, April 2). Lessons from the east — China’s rapidly evolving health care system. The New England Journal of Medicine.

5 Yip, W., & Hsiao, W. C. (2008, March). The chinese health system at A crossroads. Retrieved march 6, 2016, from Health Affairs website: http://content.healthaffairs.org/content/27/2/460.full

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12 Blumenthal, D., & Hsiao, W. (2015, April 2). Lessons from the east — China’s rapidly evolving health care system. The New England Journal of Medicine.

13 Eggleston, K. (2012, January 9). Health care for 1.3 billion: An overview of china’s health system. In Asia health policy program (pp. 1-28). Retrieved March 7, 2016, from http://iis-db.stanford.edu/pubs/23668/AHPPwp_28.pdf

14 Eggleston, K. (2012, January 9). Health care for 1.3 billion: An overview of china’s health system. In Asia health policy program (pp. 1-28). Retrieved March 7, 2016, from http://iis-db.stanford.edu/pubs/23668/AHPPwp_28.pdf

15 Yip, W., & Hsiao, W. C. (2008, March). The chinese health system at A crossroads. Retrieved march 6, 2016, from Health Affairs website: http://content.healthaffairs.org/content/27/2/460.full

16 Hu, R., Shen, C., & Zou, H.-F. (n.d.). Health care system reform in china: Issues, challenges and options [PDF]. Retrieved from http://down.aefweb.net/WorkingPapers/w517.pdf

17 KPMG. (2010). The changing face of healthcare in china: Changing public policy and resulting opportunities. Retrieved March 22, 2016, from KPMG China website: https://www.kpmg.com/cn/en/IssuesAndInsights/ArticlesPublications/Documents/Healthcare-in-China-201010.pdf

18 Hu, R., Shen, C., & Zou, H.-F. (n.d.). Health care system reform in china: Issues, challenges and options [PDF]. Retrieved from http://down.aefweb.net/WorkingPapers/w517.pdf

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29 Chauhan, L. S. (2011, September 22). Public health in india: Issues and challenges. Retrieved March 25, 2016, from Indian Journal of Public Health website: http://www.ijph.in/article.asp?issn=0019-557X;year=2011;volume=55;issue=2;spage=88;epage=91;aulast=Chauhan

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33 Coarasa, J., Das, J., & Hammer, J. (2014, December). Private vs. public. Retrieved March 24, 2016, from International Monetary Fund website: http://www.imf.org/external/pubs/ft/fandd/2014/12/coarasa.htm

34 KPMG. (2010). The changing face of healthcare in china – changing public policy and resulting opportunities. Retrieved March 22, 2016, from KPMG China website: https://www.kpmg.com/cn/en/IssuesAndInsights/ArticlesPublications/Documents/Healthcare-in-China-201010.pdf

35 KPMG. (2010). The changing face of healthcare in china – changing public policy and resulting opportunities. Retrieved March 22, 2016, from KPMG China website: https://www.kpmg.com/cn/en/IssuesAndInsights/ArticlesPublications/Documents/Healthcare-in-China-201010.pdf

36 World Health Organization. (2010, July 7). India tries to break cycle of health-care debt. Retrieved March 23, 2016, from World Health Organization website: http://www.who.int/bulletin/volumes/88/7/10-020710/en/

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38 Dhawan, A. (n.d.). 2015 health care outlook – india [PDF].

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40 Coarasa, J., Das, J., & Hammer, J. (2014, December). Private vs. public. Retrieved March 24, 2016, from International Monetary Fund website: http://www.imf.org/external/pubs/ft/fandd/2014/12/coarasa.htm

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42 Tovrov, D. (2011, December 9). 5 biggest slums in the world. International Business Times.

43 Chauhan, L. S. (2011, September 22). Public health in india: Issues and challenges. Retrieved March 25, 2016, from Indian Journal of Public Health website: http://www.ijph.in/article.asp?issn=0019-557X;year=2011;volume=55;issue=2;spage=88;epage=91;aulast=Chauhan

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45 Dhawan, A. (n.d.). 2015 health care outlook – india [PDF].

 

 

 

 

 

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