The Chinese Healthcare System

How is it different?

The Chinese Health Care System is mainly regulated by the central government under the auspices that every citizen is required to receive basic health care services. The central government is responsible for legislation, policy, and administration. Local governments, on the other hand, carry out the basic health care services. This coverage, in 2011, was near universal at approximately 95%. Private insurance for more advanced coverage or “severe-disease health insurance” is available and purchased primarily by wealthier citizens. While no statistics are available on how much of the population buys these premier packages, the market is rapidly expanding, and even foreign insurance companies are entering the market (Fang, 2016).

In short, this is a largely publicly funded system. The major payer is the local and central government and the residents, or patients, pay the premiums. The benefits of such a system are that local governments can in theory adapt to address health disparities that may be regionally specific. However, local governments across a country as large as China are inherently not created equal and large disparities exist, especially between urban and rural municipalities. Further, “basic health care services” provided are highly variable with high copayments, high deductibles, low reimbursements, and exclusion of certain drugs from the market (Fang, 2016; Nofri, 2015).

Where is it heading?

To that end, three major health insurance structures were created in order to address the disparities between 1998-2007. These three entities are the Basic Medical Insurance for Urban Employees, Basic Medical Insurance for Urban Residents (not eligible for Urban Employees), and the New Rural Cooperative Medical Insurance. Reforms over the past ten years have and will continue to improve the disparities in healthcare coverage with the central and local governments intending to consolidate their insurance delivery (Fang). However, with these reforms the cost of healthcare per capita are similarly skyrocketing (CNY584 (USD164) per capita in 2004 to CNY2,582 (USD725) in2014) (National Health and Family Planning Commission, 2015).

Overall, the Chinese healthcare system faces one of the same looming giants that the US does. It is cripplingly expensive to take care of sick people. Sick populations require identifying, monitoring, funding, treating, and finally, preventing illnesses. However, the Chinese healthcare structure also allows for interesting perks that may help address these challenges. For example, there are currently more clinical trials in China due to accommodating system of regulations for experimentation, low cost of labor, and in-house precision manufacturing. China could be a robust biotechnology competitor for the US (Crow, 2018). Some concepts in the pipeline include on-line prescriptions and other forms of telemedicine. Large companies such as Alibaba and Tencent have already made significant investments in the healthcare sector (Nofri, 2015).

Additionally, the Chinese people tend to save more disposable income than the average family. This number is upwards of 50% due to the families’ fear of having to pay for catastrophic medical expenses. Proponents of a more comprehensive healthcare system, meaning one that provides coverage for both prevention and treatment, argue that more disposable income would be spent on consumer goods, shifting the Chinese economy from one that is based on exports to one that is supported by domestic consumption with the end goal of mitigating the risks of poverty (Sun, 2015).

Since the collapse of the Chinese healthcare systems in the 1970s and 1980s, multiple reforms have been installed. With China’s large-scale movements within the healthcare and biotechnology field, as well as transportation, technology, and education, it will be exciting to see how population healthcare will be radically rehabilitated for the better.


Crow, David. Healthcare: Cancer breakthrough leads China’s biotech boom. The Big Read Biotech. April 10, 2018. Accessed 4/12/2018.

Fang, Hai. The Chinese Health Care System. International Health Care Systems Profiles. August 8, 2016. Accessed 4/12/2018.

National Health and Family Planning Commission, 2015. Accessed 4/12/2018.

Nofri, Edoardo Maria. The Chinese Healthcare System: How It Works and Future Trends. Alberto Forchielli, November 13, 2015. Accessed 4/17/2018.

Sun, Celine. Domestic consumption set to become China’s main economic driver. South China Morning Post, January 21, 2015. Accessed 4/17/2018.