Financing and organization of China's health care.

The development of a health-care system depends on a country’s economic, political, social and cultural background. Because of China’s transformation over the last 20 years from a socialist economy to a market economy, China’s healthcare services have been converted from social and public goods to market goods without government planning or intervention. Liu’s article (1) in this issue clearly describes the transformation and its consequences for both urban and rural health-care systems. Differences in economic growth and in financing, organization and resources between urban and rural regions have made China a country with two health-care systems. The urban system has more resources and is better organized, but is faced with major financing and organization issues and concerns about cost-containment, whereas the rural system lacks resources and is not well organized, and difficulty of access causes concern. Liu correctly points out that two key control points in health-care reform are organization and financing: they are interrelated and require coordination for health-care services to function efficiently and equitably. In China, however, the financing and administration of health services are segmented: the Ministry of Labour and Social Security is responsible for the urban health insurance sector, the Ministry of Health for the rural sector, and the Ministry of Civic Affairs for poor urban and rural households. The Ministry of Health is therefore in a weak position to lead the necessary reform of the health-care system at the central government level. In towns, decentralized health insurance organizations manage health-care financing for at least half the population, and this structure can be built on to expand and reinforce the financing and delivery of health services at the local level. In rural areas, however, such facilities are lacking. Numerous rural health insurance experiments Financing and organization of China’s health care Teh-wei Hu1