Introduction

Before the era of economic reform, China achieved widely recognised accomplishments in healthcare: central government established a well-organised and efficient health system that provided a low-cost medical service and wide coverage for the general public. However, the economic reforms widened health inequalities, excluding a large number of poorer people from access to basic healthcare. Healthcare reform was criticised by an official report as having ‘failed’ (PTDRC, 2005). Against this background, this chapter examines China's healthcare measures since 1978 and discusses their impact on the well-being of Chinese citizens.

Healthcare provision before the economic reforms

The main features of China's health system during the planned economy were well-organised provision, wide coverage and preventive care (PTDRC, 2005), as is explored in more detail below.

Well-organised provision

Healthcare provision in cities and rural areas was systematically delivered through a three-tier network. In urban areas, street clinics formed the lowest level of healthcare units by providing outpatient facilities for residents. District hospitals were the middle-tier health institutions, giving treatment to patients referred by street clinics. All complicated cases would be treated at city hospitals. And, government work units with more than 100 employees ran their own clinics, providing primary care services. Large SOEs even set up their own hospitals, while medium- and small-sized firms operated clinics or healthcare stations (Dong, 2001). Thus, the different levels of healthcare institutions were systematically designed to be closely linked together.

The three-tiered health system was also found in rural areas, based around the rural Cooperative Medical Scheme (CMS), ‘village medical stations’ and ‘barefoot doctors’. Production brigades collected medical fees and then submitted them to their commune's ‘trusted unit’. Medical subsidies were also provided for poor people and ‘Five Guarantees households’.