PRESS RELEASE

Report Recommends Deeper Healthcare Reforms in China

July 22, 2016


Study makes case for “people-centered” integrated health care, return to China’s pioneering practice of primary health care to improve services, cut costs

BEIJING, July 22, 2016—China needs to further reform its health system with a number of critical steps to meet the growing health needs of the population and further control spending increases, despite impressive achievements in healthcare reform and rapid progress toward universal health coverage. These include systemic and institutional reform and innovation, adoption of a tiered service-delivery system, a return to greater reliance on community health care and less on more expensive hospital care, according to a sweeping two-year study conducted by the World Bank Group, the World Health Organization, the Ministry of Finance, the National Health and Family Planning Commission, and the Ministry of Human Resources and Social Security of China.

"The report's recommendations, built on robust, comprehensive research and close collaboration by five agencies representing three partners, will contribute positively to the formation of the 13th Five-Year Plan on health reform. We look forward to carefully studying and applying the report's findings, so it will help us push ahead on health reform,” said Liu Yandong, Vice Premier of the State Council of China.

According to the study, Deepening Health Reform in China, Building High-Quality and Value-Based Service Delivery, China has lifted more than 600 million people out of poverty in the last three decades and achieved noteworthy successes in health.

Since the launch of the 2009 health reforms, China has substantially increased investment to expand health infrastructure; strengthened the primary-care system; achieved near-universal health insurance coverage in a relatively short period; reduced the share of out-of-pocket expenses—a major cause of disease-induced poverty—in total health spending; continued to promote equal access to basic public health services; deepened public hospital reform; and improved the availability, equity and affordability of health services. It has also greatly reduced child and maternal mortality and rates of infectious diseases, and improved the health and life expectancy of the Chinese people.

As in much of the rest of the world, China also faces many challenges in reforming and developing its healthcare system. The population is aging and there is a surge in non-communicable diseases such as cancer, diabetes and heart disease. The number of people over 65 years old in China is now at 140 million and is expected to increase to 230 million by 2030.

Infectious diseases have been replaced by non-communicable diseases as the greatest health threat to Chinese people, accounting for more than 80 percent of the 10.3 million deaths every year. Those diseases are exacerbated by high-risk behaviors such as smoking, sedentary lifestyles and alcohol consumption, as well as environmental factors such as air pollution. At the same time, with higher economic growth and personal incomes, people are demanding more and better health care.

Those factors have led to rising healthcare costs. Yet the slowdown in the economy will make it difficult to keep up with the current level of growth in health spending. The study makes an urgent case for China to reform and start instituting a “people-centered” integrated healthcare system to meet new challenges. The government of China has also recognized the need for a strategic change in the health system, and has taken many concrete steps in this direction. 

 

“Decades ago, China’s innovations in health such as barefoot doctors and cooperative health care showed the world it was possible to improve the health and greatly increase the life expectancy for hundreds of millions of people,” said World Bank Group President Jim Yong Kim. “Today, China can once again lead the way with cutting-edge primary health care reform that puts the patient first and shifts away from expensive hospital care that often does little to improve the health of people. If China institutes these reforms, we believe it will improve the health care system for all Chinese—or one in every six people in the world.”

 

The report recommends that China maintain the goal and direction of its healthcare reform, and continue the shift from its current hospital-centric model that rewards volume and sales, to one that is centered on primary care, focused on improving the quality of basic health services, and delivers high-quality, cost-effective health services.

 

“It’s time to put people first,” said Margaret Chan, Director-General of the World Health Organization. “This means strengthening services at all levels, from community through hospital care back to the community, and linking them more effectively, so people get the care they need every step of the way. It’s also time to work more efficiently across sectors, to protect people from risky behaviors like tobacco smoking and unhealthy diet, and prepare them to age healthily.”

Reforms recommended in the study could help China continue to implement comprehensive reforms to reduce health spending. According to the study, without reform, health spending would increase in real terms from 3.5 trillion yuan in 2014 to 15.8 trillion yuan in 2035—an average increase of 8.4 percent per year. Health spending would account for over 9 percent of GDP in 2035, up from 5.6 percent of GDP in 2014. More than 60 percent of the projected growth in health spending would come from increased inpatient services in hospitals.  

The report, which includes 20 commissioned background studies, more than 30 case studies, visits to 21 provinces in China and six technical workshops, proposes practical, concrete steps toward a value-based integrated service model of healthcare financing and delivery. Its eight key recommendations on health service delivery reform include:

  • Creating a new model of people-centered quality integrated health care that strengthens primary care as the core of the health system. This new care model is organized around the health needs of individuals and families and is integrated with higher level care and social services, using electronic tools and better data sharing.
  • Continuously improve health care quality, establish an effective coordination mechanism, and actively engage all stakeholders and professional bodies to oversee improvements in quality and performance across the system, including among public and private sector actors.
  • Empowering patients with knowledge and understanding of health services, so that there is more trust in the system and patients are actively engaged in their healthcare decisions.
  • Reforming public hospitals, so that they focus on complicated cases and delegate routine care to primary-care providers.
  • Changing incentives for providers, so they are rewarded for good patient health outcomes instead of the number of medical procedures used or drugs sold.
  • Boosting the status of the health workforce, especially primary-care providers, so they are better paid and supported to ensure a competent health workforce aligned with the new delivery system.
  • Allowing qualified private health providers to deliver cost-effective services and compete on a level playing field with the public sector, with the right regulatory oversight.
  • Prioritizing public investments according to the burden of disease, where people live, and the kind of care people need on a daily basis.

The report suggests that it will take China about 10 years to fully implement the proposed reforms and reach full scale. 

Contacts:

In Beijing:  Li Li, (86-10) 5861-7850, Lli2@worldbank.org     
Jane Zhang, +1 (202) 473-1376, janezhang@worldbank.org

In Washington: Anu Palan, +1 (240) 565-4078, apalan@worldbank.org
Huma Imtiaz, +1 (202) 473-2409, himtiaz@worldbankgroup.org

WHO: Wu Linlin, +86 10 6532 7191, wul@who.int

 

Visit us on Facebook: http://www.facebook.com/worldbank
Be updated via Twitter: http://www.twitter.com/worldbank

Media Contacts
In Beijing
Li Li
Tel : (86-10) 5861-7850
Lli2@worldbank.org
In Washington
Anu Palan
Tel : +1 (240) 565-4078
apalan@worldbank.org
In WHO
Wu Linlin
Tel : +86 10 6532 7191
wul@who.int


PRESS RELEASE NO:
2016/418/EAP