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Perspective

T h e N EW ENGL A N D JOU R NA L o f M EDICI N E

april 2, 2015

n engl j med 372;14 nejm.org april 2, 2015 1281

lion people, occupying a huge, diverse landmass, living under authoritarian single-party rule, and making an extraordinarily rapid transition from a Third- World to a First-World economy.

But first impressions can be misleading. Since its birth in 1949, the People’s Republic of China has undertaken a series of remark- able health system experiments that are instructive at many lev- els. One of the most interesting lessons from the Chinese experi- ence concerns the value of an institution that many countries take for granted: medical profes- sionalism.

Because the changes in China’s health care system have been so rapid and profound, it is helpful to brief ly review its recent his- tory.1 What might be seen as the first of four phases began when the Chinese Communist Party took power in 1949. The new government created a health sys- tem similar to those of other communist states such as the Soviet Union and its Eastern Euro- pean allies. The government owned and operated all health care facilities and employed the health care workforce. No health insurance was necessary, because services were nearly free. A dis-

tinctive accomplishment of this phase was the system’s success- ful use of community health work- ers, so-called barefoot doctors, to provide basic public and per- sonal health services at the vil- lage level. Between 1952 and 1982, China’s infant mortality rate fell from 200 to 34 per 1000 live births, and age-old scourges such as schistosomiasis were largely eliminated.2

In 1984, a second phase began: China turned its health system on its head, almost as an after- thought to dramatic free-market reforms in the rest of its economy. Led by Communist Party leader Deng Xiaoping, China converted to a market economy and reduced the role of government in all economic and social sectors, in- cluding health care. Government funding of hospitals dropped

IN T E R N AT I O N A L HE A LT H C A R E S Y S T E M S

Lessons from the East — China’s Rapidly Evolving Health Care System David Blumenthal, M.D., M.P.P., and William Hsiao, Ph.D.

At first glance, China might seem unlikely to offer useful health care lessons to many other countries. Its health system exists within a unique geopolitical context: a country of more than 1.3 bil-

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China’s Rapidly Evolving Health Care System

Selected Characteristics of the Health Care System and Health Outcomes in China.*

Variable Value Urban/Rural

Health expenditures

Per capita (U.S. $) 375

Percentage of GDP 5.57

Public sources (% of total) 63†

Health insurance

Percentage of population covered in 2012 95

Source of funding Taxes + premiums

Average annual base salary for senior physicians (U.S. $) 15,000–50,000

Access

No. of hospital beds per 10,000 population 4.55

No. of physicians per 1000 population 2.06

Life and death

Life expectancy at birth in 2010 (yr) 74.8 78/72

Additional life expectancy at 60 yr in 2014 (yr) 19

Annual no. of deaths per 1000 population 7.16

Annual no. of infant deaths per 1000 live births 6.3 3.7/7.3

Annual no. of deaths of children <5 yr of age per 1000 live births 12 6/14.5

Annual no. of maternal deaths per 100,000 live births 23.2 22.4/23.6

Fertility and childbirth

Average no. of births per woman 1.6

Births attended by skilled health personnel in 2012 (%) 100‡

Pregnant women receiving any prenatal care in 2012 (%) 95

Preventive care

Colorectal-cancer screening generally available at primary care level No

Children 12–23 mo. of age receiving measles immunization (%) >90

Prevalence of chronic disease (%)

Diabetes in persons >18 yr of age in 2010 11.6

Hypertension in persons >18 yr of age in 2010 33.5

HIV infection <0.1

Prevalence of risk factors (%)

Obesity in persons >18 yr of age in 2010§ 12

Overweight in children <5 yr of age in 2010¶ 7.1

Smoking in persons >15 yr of age 28.1

* Data were obtained from the World Bank, the Organization for Economic Cooperation and Development, the Commonwealth Fund, the World Health Organization, the Chinese Center for Disease Control and Prevention, the Global AgeWatch Index, and the Chinese Ministry of Health (now reorganized as the National Health and Family Planning Commission) and are for 2013 except as noted. Data on urban versus rural life expectancy were estimated by the authors from the 2010 national census published by the Chinese National Bureau of Statistics. Data on diabetes and hypertension were derived from testing of a sample of about 100,000 adults by the China Noncommunicable Dis- ease Surveillance, 2010; among adults who were found to have hypertension or diabetes, only 42.6% and 30.1%, respectively, were aware of their condition. GDP denotes gross domestic product, and HIV human immunodeficiency virus.

† The government’s budget pays 30% of the total, and premiums for social health insurance pay 33%. ‡ Out-of-wedlock births are not included; no data on such births are available. § Obesity in adults was defined as a body-mass index (the weight in kilograms divided by the square of the height in meters) of 28 or more. ¶ Overweight in children less than 5 yr of age was defined as a weight-for-height ratio more than two standard deviations above the median

for the international reference population of the corresponding age, as established by the World Health Organization’s new child growth standards.

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dramatically, and many health care professionals, including bare- foot doctors, lost their public subsidy. The government contin- ued to own hospitals but exert- ed little control over the behav- ior of health care organizations, which acted like for-profit enti- ties in a mostly unregulated market. Many health care work- ers became private entrepreneurs. Physicians working for hospitals received hefty bonuses for in- creasing hospital profits.

As they responded to these new economic imperatives, Chinese physicians had little history or tra- dition of professionalism or inde- pendent professional societies to draw on. China had transitioned from a society organized accord- ing to Confucian principles (which did not envision the existence of a modern, independent profes- sion such as medicine) to a com- munist country (in which clini- cians were state employees owing their primary allegiance to the Communist Party) to a quasi-mar- ket environment. At no point along this journey did physicians have the opportunity or support to develop the norms and stan- dards of medical professionalism or the independent civic organiza- tions that could promote and en- force them. Indeed, the Chinese language has no word for “pro- fessionalism” in the Western sense.

To make China’s experiment with free-market health care even more dramatic, the Chinese re- forms left the vast majority of the population uninsured, since the government did not provide coverage and no private insur- ance industry existed. As of 1999, a total of 49% of urban Chinese had health insurance, mostly through government and state enterprises, but only 7% of the

900 million rural Chinese had any coverage.2 Thus, a population largely unprotected against the cost of illness confronted a health care delivery system intent on economic survival and a health- professional workforce that had never had the opportunity to de- velop as independent professionals. Indeed, prevailing new econom- ic rules and incentives strongly encouraged physicians to operate like entrepreneurs in a capitalist economy.

The government kept its hand in one major aspect of health care: pricing. Presumably to en- sure access to basic care, it limited the prices charged for certain services, such as physicians’ and nurses’ time. However, it allowed much more generous prices for drugs and technical services, such as advanced imaging. The pre- dictable result: hospitals and health care professionals greatly increased their use of drugs and high-end technical services, driv- ing up costs of care, compromis- ing quality, and reducing access for an uninsured citizenry.

By the late 1990s, this market- reform experiment had resulted in public anger and distrust toward health care institutions and pro- fessionals, and even in wide- spread physical attacks on physi- cians. Discontent with lack of access to health care fueled pub- lic protests, especially in less af- fluent rural areas, that threat- ened social stability and the political control of the Communist Party.

In 2003, a third phase began, when the Chinese government took a first step toward mitigat- ing popular discontent with health care by introducing a modest health insurance scheme covering some hospital expenses for rural residents. The focus on hospital

care reflected the fact that hospi- tal services were expensive and therefore drove many patients into poverty.

But this hospital orientation also reflected limitations in the leadership’s understanding of the critical role that competent pri- mary care plays in managing health and disease and controlling the costs of care. Chinese au- thorities were also preoccupied with relieving the financial burden created by much more expensive hospital services. Not surprising- ly, the 2003 reforms proved in- sufficient to ameliorate China’s deep-seated health care problems.

By 2008, China’s leaders had concluded that major reforms in both insurance and the delivery system were necessary to shore up the system and ensure social stability. In a fourth and ongoing phase of evolution, they officially abandoned the experiment with a health care system based pre- dominantly on market principles and committed to providing af- fordable basic health care for all Chinese people by 2020. By 2012, a government-subsidized insur- ance system provided 95% of the population with modest but com- prehensive health coverage (see table).3 China also launched an effort to create a primary care system, including an extensive nationwide network of clinics.3

Though China’s extensive 2008 reforms are still in process, a number of problems, mostly con- cerning tertiary hospital care, con- tinue to challenge its leadership. First, many of the country’s pub- licly owned but profit-driven ter- tiary hospitals successfully resisted the latest reform efforts — a re- ality that probably ref lects the hospitals’ power within China’s political system. As a result, frustrated authorities sought to

China’s Rapidly Evolving Health Care System

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use market forces once again to bring the hospital sector into line.

In 2012, the leader- ship announced that they would invite pri- vate investors to own

up to 20% of China’s hospitals by 2015, double the preexisting rate.4

Second, major inequities con- tinue between the health care available in poor rural areas and that in more aff luent cities.5

Third, China continues to strug- gle with creating a high-quality, trusted, professionalized physician workforce. One legacy of China’s market experiment is a wide- spread perception that physicians put their economic welfare ahead of patients’ interests.

Though China’s health care system is still rapidly evolving, several potentially useful lessons emerge from its recent history.

The first is that in low-income countries, and perhaps high- income ones as well, community health workers such as China’s barefoot doctors can significant- ly improve the health status of local populations.

Second, relying largely on mar- kets to fund and distribute health services creates risks that need careful consideration. Though gov- ernment price setting created market distortions, these do not fully explain the problems with quality, access, and cost that China experienced in the second phase of its recent history. Health care is subject to serious market failures. Asymmetries in information be- tween patients and health care providers make it difficult for pa- tients to make sound choices in free health care markets, and pa- tients’ lesser knowledge may be exploited by clinicians. Patients’ resulting vulnerability, resent- ment, and distrust can be social- ly destabilizing — and may in- tensify when patients are heavily exposed to the costs of care, as they were until recently in China.

Third, physician professional- ism may be underappreciated as a foundation for effective mod- ern health care systems. The in- culcation of professional norms during and after training and the existence of professional institu- tions that reinforce these norms certainly do not guarantee that professionals will act only in the interest of their patients and the public. But there seems little question that the lack of a widely shared tradition of professional- ism has complicated China’s ef- forts to create a health care work- force that its leaders and the public trust to do the right thing.

Finally, China’s health care experience shows that it may be

China’s Rapidly Evolving Health Care System

PREGNANCY AND CHILDBIRTH

A healthy 23-year-old woman is pregnant for the first time.

Ms. Wang lives in rural China. Her perinatal care, which is relatively uniform throughout China, relies on the country’s three-tiered system for essential health services: village or neigh- borhood clinics provide preventive and basic primary care ser- vices, township or subdistrict health centers staffed by primary care physicians provide more advanced outpatient services and have beds for observing patients who are not very ill, and county hospitals provide basic specialty care and inpatient services.

Ms. Wang registers with the village clinic as required to re- ceive the maternity services covered by China’s rural insurance: five prenatal visits, various routine prenatal and postnatal tests, hospital delivery, and four postnatal visits. Though routine tests are free, she must pay the full charge for some services consid- ered elective, such as advanced three- or four-dimensional ultra- sound. She has to pay a 10 to 20% copayment ($35 to $70) for her delivery in the 300-bed county hospital; she would pay 10 times as much at a tertiary care hospital.

At weeks 12 and 28 of her pregnancy, Ms. Wang visits the township health center 3 miles away for examinations by a physi- cian with 3 to 4 years of medical training. She receives prenatal screening tests, a routine ultrasound, and counseling. Starting at week 29, Ms. Wang visits the township health center every 3 to 4 weeks for monitoring of blood pressure, weight, and fundal height. The village doctor does regular follow-up after these visits.

Ms. Wang would stay at the county hospital 3 days for a nor- mal delivery. However, China has a high incidence of cesarean section, partly because it is more lucrative for physicians. When she’s discharged, she will be visited by the village doctor three times in the first month. After 42 days, she’ll return to the hospi- tal for examination and tests.

An interactive graphic is

available at NEJM.org

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easier to reform health insurance than delivery systems and that in creating effective delivery systems, primary care seems to play a vi- tal role.

A review of China’s health care journey reveals that its leadership has made significant errors but has also acted with flexibility and decisiveness in correcting its mistakes. China’s willingness to undertake major health care ex- periments will make its system an interesting one to continue to observe in the future.

Disclosure forms provided by the authors are available with the full text of this article at NEJM.org.

From the Commonwealth Fund, New York (D.B.); and the Department of Health Policy and Management, Harvard T.H. Chan School of Public Health, Boston (W.H.).

1. Yip W, Hsiao WC. What drove the cycles of Chinese health system reforms? Health Systems and Reform 2015;1:52-61. 2. Blumenthal D, Hsiao W. Privatization and its discontents — the evolving Chinese health care system. N Engl J Med 2005;353: 1165-70. 3. Chen T-M. Early results of China’s historic health reforms: the view from Minister Chen Zhu. Health Aff (Millwood) 2012;31:2536-44. 4. Loo D. China’s Rx: foreign-owned hospi- tals. Bloomberg Business. June 28, 2012 (http://www.bloomberg.com/bw/articles/2012 -06-28/chinas-rx-foreign-owned-hospitals). 5. Fu R, Wang Y, Bao H, et al. Trend of urban- rural disparities in hospital admissions and medical expenditure in China from 2003 to 2011. PLoS One 2014;9(9):e108571.

DOI: 10.1056/NEJMp1410425

MYOCARDIAL INFARCTION

A 55-year-old man with no serious health conditions has a moder- ately severe myocardial infarction.

Management of myocardial infarction in China varies consid- erably between rural and urban areas, and Mr. Li lives in a rural area, where he’s covered by rural health insurance. He develops chest pain around midday. An hour later, he calls the village doc- tor, who arrives at his home about 30 minutes later and adminis- ters nitroglycerin tablets. When the pain is not alleviated, the doctor calls a senior internist at the county hospital, who advises the patient to call an ambulance to transport him to the hospital, which is 30 minutes away. As is customary in China, however, Mr. Li waits for his daughter to come home from work so she can accompany him. He arrives at the hospital around 7 p.m.

There, electrocardiography and myocardial-enzyme tests con- firm that he’s having a myocardial infarction. He has two treatment options: intravenous thrombolysis at the county hospital or cardiac catheterization at a tertiary care hospital. His doctor recommends the latter, since it’s too late for thrombolysis to be effective.

Mr. Li hesitates because of the added expense of care at the tertiary facility: treatment at the county hospital requires a $300- to-$600 copayment, as compared with $2,000 to $2,500 at the tertiary facility. His family’s annual income is only $6,000. Never- theless, he opts for the tertiary hospital.

Mr. Li undergoes angiography and receives two stents. He stays in the hospital for 2 weeks, spending half that time in the cardiac intensive care unit. He is discharged on aspirin, clopido- grel, an angiotensin-converting–enzyme inhibitor, a beta-blocker, spironolactone, and a statin. His insurance pays 60% of the cost of these medicines up to a maximum of $800, leaving him with out-of-pocket medication expenses of $700 to $800 per year.

Mr. Li receives very little counseling about preventive mea- sures such as smoking cessation or hypertension or lipid man- agement. He returns to his village with no arrangements for pri- mary care follow-up.

Informed Consent and the First Amendment Wendy K. Mariner, J.D., M.P.H., and George J. Annas, J.D., M.P.H.

For more than two decades, states have been adding to the things that physicians must say and do to obtain “informed consent” — and thereby testing the constitutional limits of states’

power to regulate medical prac- tice. In 1992, the Supreme Court upheld states’ authority to require physicians to provide truthful information that might encour- age a woman to reconsider her

decision to have an abortion, finding that such a requirement did not place an “undue burden” on the woman.1

Now, there is a potential vehi- cle for a new Supreme Court ex-

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