Health Care

The Health and Social Services sector comprises two major areas: hospitals and clinics on one hand, and on the other, social services such as retirement homes, convalescent homes, orphanages, shelters, and rehabilitation centers.

The advent of Western medicine in China came in the 18th century, with the arrival of foreign missionaries and the first Western-style hospitals. Prior to that, traditional Chinese medicine was dominant, and health services were available in the form of unorganized private clinics. The arrival of missionaries from the West in the 18th century brought about the first contemporary hospital, most of which at the time were privately owned. Most of the hospitals established after the arrival of the missionaries were privately owned, but this quickly changed after the formation of Communist China in 1949. During the subsequent Cultural Revolution, the Ministry of Health took over the reins of the healthcare system.

By the late 1960s, private hospitals had completely disappeared, and in their place came state-funded hospitals and county health stations. In the early 1980s, in the wake of China’s reform and opening up policy and the realization of the importance of market economy and privatization, a round of reform took place to reorganized the health institutions into enterprises that could make profit by charging for services and drugs. However, it was not until 1987 that private healthcare clinics were once again allowed. As of 2021, although public hospitals still provide most of China’s health services, two-thirds of the 37,000 hospitals in China are private.

The SARS outbreak in 2003 spurred a round of reform which established the two main branches of China’s public health architecture: the public health system, which included disease prevention and control, health supervision, public health emergency, and other functions; and the medical services system, including hospitals and health centers on all administrative levels. The public health system is solely funded by the government, while the medical services system is partially funded by the government and partially by profits from drug markups and service charges from basic medical services like diagnosis, nursing, surgery; and the more profitable services that use advanced technologies like MRI and computed tomography.

In 2009, Chinese government voiced goals in the piece Opinions on Deepening the Health Care System Reform to achieve universal healthcare coverage by 2020, marking the start of a new round of reform, which focuses on the four systems: public health service system, medical service system, health insurance system, and drug supply and security system. By 2016, China has already covered 1.3 billion or 95% of its population with basic medical insurance. The 2017 17th Communist Party Congress further defined the goal of achieving effective, accessible, and affordable healthcare. Since then, various policies addressing these problems have taken shape. Examples include the 2018 internet-based healthcare initiative, removal of drug markups in public hospitals in 2017, and policies to remove illegal rebates and rectify drug pricing in 2021.

In an effort to promote human development, the 14th Five-Year Plan (FYP) dedicates a section to building a “Healthy China (健康中国).” The initiative includes plans to expand geographical coverage of healthcare, increase the quantity and quality of medical staff, remove inefficiencies in the sourcing and licensing of medical equipment and drugs. In addition, the FYP also mentions goals to improve the public health system and the universal health insurance system, promote Chinese medicine, and push forward national campaigns for health, sports, and sanitation. Interestingly, the FYP also outlined policies to combat an aging population, including better policies and infrastructure in childcare and eldercare to encourage young people to have children. The “Healthy China” initiative also outlines goals of achieving universal, lifetime, comprehensive healthcare services by 2030; an average life expectancy of 79; and health indicators compared to those of high-income countries.