For 20 years hospitals have been run on a profit basis. Only a minority is covered by medical insurance; others sell what they own or try their own remedies. Hospitals often prescribe unnecessary treatment and drugs.

Beijing (AsiaNews/SCMP) – Although China's has 22 per cent of the world's population it represents only 2 per cent of total health care costs. Patients more often than not must pay out of their own pocket; those who cannot afford to do so must fall back on their own remedies or die without seeing the inside of a hospital.

In mainland China health care has become just another business after government cut funding some 20 years ago, pushing all hospitals and medical institutes into generating profits to pay for their staff and expenses. The net result has not only been that patients must pay for their own treatment but they must also shell out money for expensive and often unnecessary medical procedures.

"By asking hospitals to make profits to finance expenses, the government is shirking its responsibility," said Yu Zonghe, deputy chairman of the Chinese Hospital Association.

Vice Minister of Health Zhu Qingsheng a year ago said that his Ministry received only 1.6 per cent of government's annual budget and most of that went to the cities.

"Only 30 per cent of the medical expenditure is spent on farmers, who comprise 70 per cent of the population. The urban population, which makes up 30 per cent, enjoys 70 per cent of the medical resources," Zhu said.

To make matters worse, only a minority of Chinese have health insurance. According to Zhu, about 45 per cent of urban residents and 79 per cent of people living in rural areas were not covered by any insurance plan in 2004.

The uninsured who need decent medical treatment usually have to sell their own assets, borrow money and go to big cities.

Even in the big cities with plenty of facilities, getting medical treatment for curable and common diseases can still be a nightmare.

According to the 2004 World Health Report, China's health care system is among the worst in the world coming in at the 189th place in a list of 191 countries.

One way for hospitals to fund their operating costs is to sell drugs at marked-up prices but this has led to higher overall costs and excessive use of expensive drugs.

Thus, Vice Health Minister Zhu noted, that anywhere between 40 to 60 per cent of farmers cannot afford medical care whilst 60 to 80 per cent of Chinese died at home because they could not pay for health care.

In order to circumvent high costs, many patients opt for self-medication without seeking the advice of a doctor with the result that some 190,000 of them die each year and another 2.5 million are hospitalised for improper drug use.

Paradoxically, high costs have led to a drop in the hospital bed occupancy rate from 87 per cent in 1985 to 72 per cent last year because many medical facilities prefer to leave beds vacant rather than treat people who cannot afford to foot high bills.

In the meantime, there are more medical disputes and growing tensions between doctors and dissatisfied patients. Last month, a disgruntled patient stabbed a doctor to death in a traditional Chinese medical clinic in Fuzhou despite the presence of bodyguards hired to prevent attacks from angry patients.

A report by the State Council Development Research Centre released in July described the past two decades of health-care reform as a failure and called for an overhaul. But there is no consensus as to possible remedies.

An idea gaining ground within the government is to split medical services into high-end and basic services. Officials suggest the government should select some hospitals to provide basic medical services and heavily subsidise their costs. It could then allow the market to freely provide more sophisticated medical procedures and the profits from these services could be used to subsidise basic health care.

However, the proposal has many problems—such as how to define basic and high-end services, and how to avoid abuses.

Many in the medical profession remain sceptical and point out that any reform must include more funding. But for others the debates and proposals have so far ignored the issue of quality.

"Quality, efficiency and equity are equally important. If the quality of medical services is not guaranteed, there will remain dissatisfaction and the problems cannot be solved," said Professor Zhang Wei, of Beijing University's Department of Health Economics and Management. (PB)

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