What the US Can Learn From China’s Health Care Reform

Wang Li is a 48-year-old farmer from Dalian, China. After a two-day trip to the major provincial hospital, he’s heading home to his village to die. Wang has lung cancer, and even with insurance, his surgery will cost him 20,000 RMB — $3,000, which is twice his annual salary. The surgery would be curative, but it doesn’t matter. “I cannot burden my family,” he said.

I am a Chinese-born, American physician who just returned from a two-month research trip spanning twelve cities and nine provinces in China, where many of the health care reforms in contention in the U.S. have already been tried. As Americans contemplate the decisions ahead, consider China’s cautionary tale.

Today’s China is one of great disparity. The wealthy minority receives top-notch care, while the poor majority suffers from little access to care and no way to pay for it. Stories abound of patients like Wang Li who sign out of hospitals when they run out of savings, knowing they will die without treatment.

It wasn’t always this way. In the mid-20th century, China had universal health care with a robust primary care system. Millions of “barefoot doctors” provided basic medical services in villages, and attention to prevention ensured significant gains in life expectancy.

The reforms of the 1980s changed health care from being a social good to a commodity. Universal insurance was dismantled, and 900 million people lost coverage overnight. Health care was decentralized to provincial governments, who allowed the market to operate with few restrictions.

What’s emerged is a fragmented system fraught with inefficiencies and perverse incentives. In Beijing, if a doctor diagnoses someone with a common cold and sends the patient home, she gets paid, 4.5 RMB, less than a dollar. But if she orders tests and administers IV antibiotics, she gets paid 400RMB, 100 times more.

There are additional ethical concerns. Because local governments have ultimate responsibility for service provision, poor provinces can afford to pay their doctors little more than manual workers. Doctors are expected to “top up” their salary through other means. Some earn up to 5 times their salary through kickbacks from pharmaceutical companies by prescribing new, expensive medications; others accept direct bribes from patients (“hong bao”) as promise for better care.

The commoditization of health care has caused direct harm to the patient-physician relationship. Patients question whether doctors are acting in their best interest. Threats against doctors occur daily, and doctors have become terrified of the people they serve.

Understandably, the attrition rate among doctors is multiplying. The lack of doctors is particularly acute in rural areas. With low pay and few opportunities there, doctors flock to cities, leaving many villages without any doctor. The high reimbursement for treatments has resulted in a huge pay differential in favor of specialists, and China has gone from a model primary care system to having virtually no general practitioners.

To its credit, the Chinese government has recognized the inadequacies of its health care reform, and is making amends including a nationalized health insurance system and a code of conduct for doctors. For the U.S. in considering similar reforms, China’s failures offer three important lessons:

First, health insurance does not equate access or coverage. In China, those with insurance still have to pay 60-70% out of pocket, leaving many without actual health coverage. Taking “personal responsibility” for our health may be important, but we should not price people out of life-saving treatments.

Second, fee-for-service should be abolished in favor of fee-for-diagnosis, with a specific illness billed a fixed amount regardless of the tests and procedures performed. Not only does such “bundled payments” require accurate diagnoses, they reduce cost and the potential for inefficiency and corruption.

Third, health care regulations need to be national decisions. Given the variability among states and our mobile health care workforce, decentralized policies don’t make sense and will exacerbate inequalities. Market-based innovation can still be encouraged with pilot projects starting at the state level, but the U.S. needs national consensus on overriding principles.

This year, America has a once-in-a-generation chance to fix our broken health care system. As policy-makers discuss implementation of the Accountable Care Act, they should learn from China’s experience and decide whether they see medical care as a commodity or social provision, and what are the responsibilities of the government to ensure the health and well-being of its citizens.

Dr. Leana S. Wen, M.D., is an emergency physician at Brigham & Women’s Hospital and Massachusetts General Hospital and a clinical fellow at Harvard Medical School. She is the author of the new book, When Doctors Don’t Listen: How to Avoid Misdiagnoses and Unnecessary Tests. For more information, visit her blog The Doctor is Listening or her website. Follow @DrLeanaWen.

10 replies »

  1. Very accurate and true. I visited Beijing to explore an executive opportunity and i went to the outskirts area of beijing. Healthcare needs a makeover. I know the ministry of health is trying to focus on healthcare and would like to have private entities be involved but it is still a challenge. Hopefully some Chinese American with North American experience can persuade the country to make a change

  2. Ironic isn’t it that a formerly Communist country now has harsh free market medicine, whereas a capitalist America has (through Medicare and Medicaid) about 95% socialized care.

    But the fine article and the posts above do illustrate a very interesting question.

    Namely, how shall we define public health?

    If public health means lowering infant mortality and stopping epidemics and enabling workers to work, then China has made great strides.

    If public health means preventing death, and pain, and helping older workers live longer, China obviously has a long way to go.

    In America our definition of public health has greatly expanded…..we will see if we can afford our own definition.

  3. Well, if a communist government forces you to work to death as a slave laborer on collective farm, I suppose the least it can do is send a community health worker around once in a while.

    Surely we can think of some examples of voluntary, democratic, rural care, can’t we? Mother Teresa type stuff?

  4. ‘Health Care’ here is a business, in which it ranks #1 in the world. While the actual quality of care ranks 37th, it still has the best that money can buy.
    It doesn’t pretend to be anything else.

    Repeat that to yourself often, then everything will be clear.

  5. Thanks for the comments. It is true that the cost of care in the US is extraordinary. But everything is relative. A surgery of $3000 USD might be affordable for most Americans, but not for most Chinese–so like many Americans, the Chinese are also being priced out of life-saving treatments. However, unlike Americans, there is no safety net for the Chinese. There is no Medicare, Medicaid. There is no emergency care system that requires all patients to be seen regardless of insurance status. I agree with you that the forest is important, and that’s why it’s important to keep in mind that all cost is relative.

  6. Thanks, Maithri, and thank you, Sebastian, for your comment. The “barefoot doctors” system is hardly ideal medical care for, say, modern-day US, but was a safety-net, primary care system that significantly improved public health in China. In the article, I use it to highlight how China has gone from this system to one of highly decentralized, privatized care–with the problems as described.

  7. Thers a simple answer to that ,I’m guessing the don’t have CEO s commanding salaries of millions. Only in America

  8. I don’t think the point of bringing up the ‘barefoot doctor’ is to imply that a dictatorship is necessary for universal health care.

    If you are familiar with the history of primary care at all, you would know that barefoot doctors of the 1960s are often cited as one of the forefathers of the modern-day community health worker-a care provision model that was hailed and emphasized before the reforms in the early 1980s (take a look at the Declaration of Alma Ata in 1978) in China (as mentioned by Leana) and the shift in economic priority of countries due to the economic recession of the 1980s.

    A model that has resurfaced in popularity and has provided outstanding outcomes in international health…and a model being pushed here in the United States as well, especially by those concerned about the future of primary care.

  9. Wang Li, the 48 year old farmer would just have surely been sent home to die under the old regime, because the state would never have provided the surgery.

    Dr. Wen misses the forest for the trees. Wang Li’s surgery would have cost a mere $3000. That is amazingly inexpensive compared to the cost of same in the USA. The problem in China is not one of high health care costs but rather that the average Chinese subsists on four dollars a day. We should study the Chinese to see how they have managed to keep surgical costs so low.

  10. This is unspeakably grotesque. The current system has “ethical concerns.” But the op-ed implies that the previous system, of “barefoot doctors”, which was imposed by a totalitarian dictatorship that murdered millions of people, is to be described as “universal health care”.