- Associated Press - Thursday, February 17, 2011

BEIJING (AP) - China said Thursday it wants to push forward health reform efforts this year with new targets promising expanded insurance for the urban population and higher subsidies for the poor.

Public health care in China has been underfunded for years, and the high cost and poor availability of health services are among the Chinese public’s biggest complaints. In 2009, China announced it would be pumping in $124 billion to reform the system over three years, to provide basic medical coverage and insurance to all of China’s 1.3 billion people.

On Thursday, the State Council, China’s Cabinet, issued a document on its website outlining targets for the year, including plans to expand medical insurance coverage for urban workers and residents to 90 percent, reaching 440 million people.

That would be an increase from the 401 million people working or living in cities who were already covered by state health insurance by the end of 2009, according to state media reports. In rural areas, more than 90 percent of people are already covered by government health insurance.


The Cabinet also said China hopes to raise inpatient medical fee reimbursement rates for urban retirees and the unemployed and farmers to 70 percent and increase annual government subsidies for insurance premiums to 200 yuan ($30) per person.

In China, a serious illness can wipe out a family’s life savings, while the need to set aside earnings for potential medical costs is considered a major drag on domestic consumption needed to revive the flagging economy.

Although the reforms have so far succeeded in increasing insurance coverage in the rural areas and improving primary health services at the village level, the government’s efforts to address problems with health care at state hospitals have been criticized as insufficient.

During an inquiry by the Standing Committee of the National People’s Congress, China’s legislature, in December about China’s health reform, lawmakers complained that medical care at public hospitals continued to be expensive. Top health officials replied that the reform of public hospitals was the most challenging task, and that patience was required.

Public hospitals have been relying on profits from the sale of drugs and expensive treatments and tests to cover their operating expenses. They have been accused of aggressively prescribing expensive and sometimes unnecessary drugs and treatment, creating a heavy burden on patients and wasting medical resources.