Health Care Reform: A Bull in China’s Apothecary Shop?

As the healthcare debate continues raging in the US, universally covered Europeans look on smugly from the sidelines.  (Well, not all Europeans.    Tim Worstall argues that high US health spending is the successful application of the will of the market.) 

Meanwhile, President Obama has been telling his staff to read Atul Gawande on the weak relationship between spending and the quality of health provision across the US.  Gawande argues that high costs are driven by unnecessary treatment rather than better care. 

There’s a similar story to tell across the Pacific.  In the 1970s, China had a cooperative medical system that provided coverage to 90 percent of the rural population.  A series of reforms since then have introduced fee for service and health insurance schemes.  These reforms have increased costs, but it is hard to see much impact on improved levels of health.  Per capita health spending increased seven-fold in rural areas over the period 1990-2002, but rates of progress in health outcomes have dramatically slowed. 

That’s in part because the quality of care provided can be pretty grim, not least because of the incentives of the fee for service model.  Over-prescription of drugs is a particularly big problem.  In 1999, a study of eight village clinics in Chongquing and Gansu provinces found less than 0.06% of prescriptions handed out were deemed reasonable by the doctors in the survey team.  

China isn’t the United States, of course.  But it does provide stark evidence that health care reform can have a dramatic impact on the efficiency of provision –for good or ill.

1 thought on “Health Care Reform: A Bull in China’s Apothecary Shop?

  1. That’s a scary comparison. I frankly am concerned that we have a government intent on ramming this down the American throat without giving us the chance to review something so crucial let alone not having read it themselves.

    It’s craziness.

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