Health systems in rural areas: A comparative analysis in financing mechanisms and payment structures between China and India

Transcription

1 Health systems in rural areas: A comparative analysis in financing mechanisms and payment structures between China and India Shijun Wang 2011 Supervisor: Kjerstin Dahlblom

2 Abstract Background: Health is a major concern all over the world, especially for the developing countries with an extremely large population and limited health resources, and with wide gaps in every aspect between urban and rural areas. The aim of the thesis is to analyze the rural health care systems in China and India, through comparing differences and similarities and putting forward recommendations for each country. Methods: This thesis is a literature review. In this thesis the method applied is Bereday s classical comparative pedagogy including four steps description, interpretation, juxtaposition and comparison. Results: On the basis of the introduction giving the background and descriptions of the rural health systems, and then by comparing them regarding structure, financing mechanisms and reimbursement structures, similarities and differences was found between these two rural health systems. They both have similar three-level health centers under the rural health system. The majority of the public health care costs are paid by the governments, with a much smaller proportion paid by rural individuals; even most of the costs are free in rural India. However, while under the rural health system in China, a social insurance as the financing mechanism is running well through pooling the risks and contributions, a formal comprehensive mechanism is lacking in India, where the government just provides most of the health care services for free. Conclusions: In general the two rural health systems work well both in China and India to some extent. However, both rural health systems have imperfections. In China, instead of the standard amounts, different amount of premiums and reimbursements fixed deductibles and ceilings should be considered depending on different income levels of the rural population, especially for the extremely poor and a few rich people. In India, the financial problem that the government could not pay such high costs for most of the free health services is the first to be solved. The Indian government is planning to design a financing mechanism like pooling risks and reimbursement for payments under the rural health system instead of the universal free health care services in rural areas. Key words: health system, rural, comparison, China, India 1

3 Content Abstract... 1 Content... 2 Introduction The rural health care system - A public health issue Previous research on comparative analysis in health issues... 5 Aims Overall aim Specific aims... 7 Materials and Methods Material collection Methods of analysis Literature search process Results China Background New Rural Co-operative Medical Care System in China Financing mechanism Reimbursement structure India Background Rural Healthcare System A Three Tier System in India Financing Mechanism and Payment under RHS Discussion Comparability in the two countries Juxtaposition and comparison Conclusion

4 Limitations Acknowledgements References

5 Introduction 1.1 The rural health care system - A public health issue According to the global health movement health for all [1] undertaken by the World Health Organization (WHO), health care service is supposed to be a necessary service provided to the whole population, by means of distributing the health resources evenly, regardless of wealth or areas. Everyone has the same right to equal treatments as well as access to essential health care when in need and seeking it. In fact, health for all has been a goal yet to be attained since it was adopted in 1981, both on a global level and on a national level in a number of countries. From the international perspective, health resources are not evenly distributed among countries. One of the most important human resources, the density of physicians reflects a remarkable inequality all over the world. The Figure 1 from the World Health Statistics 2010 [2] shows the number of physicians all over the world. In most developed European countries there were more than thirty physicians per 10,000 populations, meanwhile the estimate number was less than five in many poor African countries. Figure 1 Global distribution of physicians (per 10,000 populations) On a national level, uneven distribution of health resources exists in different aspects for different countries. In some developing Asian countries, the disparity of health care resources due to the proportionality of socioeconomic development between 4

6 rural and urban areas becomes one of the most pressing concerns. To be more specific in this thesis, the two selected developing Asian countries China and India have similarities in geographical, demographical, historic, cultural and socio-economic conditions, which prove the comparability for them to be studied comparatively. The disparity and inequity between urban and rural areas is serious because of their complex environment and progress of the social development with new coming issues such as economic transition. From a macro perspective, health care system in rural areas is considered to be the most crucial issue which is urgent to be well developed in these Asian countries. Lacking of health care services in rural areas may result in more health and even social problems, which might worsen the health care system, and bring the system in a vicious circle. 1.2 Previous research on comparative analysis in health issues According to the collected literature, comparative analysis has been used more in education research than in health. In search for literature on comparative health systems three articles could be found about international comparison in the topic of health systems, and among them only one article refers to rural health systems. Broadening the topics and the key words to search for relevant or similar researches, more papers were collected on the experience of international comparison in health issues. More information about the literature search process and the method for comparative research will be introduced in the methods section (p 10) of this thesis. In this part the three most relevant previous studies are discussed. The most relevant research to the topic found is a PhD dissertation A research on foreign health systems and rural medical care systems by Zhang Kuili in 2008 [3], including a chapter about health care system for rural areas in some developing countries. He described the country profile, existing health situation, entire health system, and rural health system for India, Thailand, Brazil and Mexico, and for Thailand also the health system reform. However, there were no comparisons between the countries or with China. The authors also analyzed the Chinese special setting and draw some lessons in different aspects such as health regulation and supply of health care services from the experience of both developed and developing countries. The suggestions for China only concerned in the overall health system but not specifically in rural health system. Since in this dissertation each country was just described without comparison with other countries or China, the research method is not quite suitable or effective for this thesis. Another research about comparison in health systems is Advanced Asia s health systems in comparison by Robin Gauld et al [4] in The authors compared the countries and regions of Japan, South Korea, Taiwan, Hong Kong and Singapore regarding primary care organization, rationing and cost containment, service quality, and system integration [4]. Although these countries and regions are developed, their health systems differ and problems inevitably exist in each system. In general, the authors gave rough information about the health systems, summed up the 5

7 problems and pressures these countries faced, and provided ideas on considerable opportunities. The last article which is a comparative study on health system is Health system organization and governance in Canada and Australia: A comparison of historical developments, recent policy changes and future implications [5] by Donald J. Philippon and Jeffrey Braithwaite in The authors did not focus on the policies and regulations or the content of the health system. Instead, they explored a new perspective that the health systems in Canada and Australia have evolved in a similar way and how the policy changes affected on governance of health systems. To elaborate the changes and the progress, the older health systems before the evolution are introduced firstly, and then the ongoing structural change is discussed to analyze how the policy changes affect the governance of the health systems. Finally in the conclusion part the authors discussed the Canadian experience and Australian experience respectively and gave the future implications. These studies in international comparative analysis of health systems concern diverse angles of view, but most of them focused in one or more aspects of the health system instead of the system itself. Regarding the research method in health systems in rural areas, no paper was found applying any standard comparative analysis method to conduct the comparison study. Instead, in this thesis, the classic four-step comparative pedagogy by Bereday was employed for the comparison of rural health system between China and India. 6

8 Aims 2.1 Overall aim The overall aim of this study was to explore and compare the financing mechanisms and payment structures of two rural health systems in China and India. 2.2 Specific aims To describe the background information of China and India and the structure of health systems in rural areas. To interpret and juxtapose the two health systems in structure, financing mechanisms and payments, and analyze the differences and similarities in order to compare between two countries. To provide insights and references and put forward recommendations for each country on improvement of the rural health systems for both countries. 7

9 Materials and Methods 3.1 Material collection This thesis is a literature review and the types of literature include official documents, reports and articles. The sources of the materials are from the websites of health related organizations and sectors such as the WHO, the government webpages and the ministry of health webpages, international and national databases and other useful websites. In the introduction part, the background information is from the country profiles by the governments and the WHO, with some data indicating the health situation for both countries from the WHO statistics. To describe the health systems of China and India, documentations are required from the government and the Ministry of Health for China and the Ministry of Health & Family Welfare for India, supplementary information referred to other official or unofficial websites. A great deal of information is available and helpful in the official websites of the WHO, the governments and other relevant official sectors. Besides, several articles and dissertations were useful for the material collection, giving sources and insights to activate for new thoughts. When collecting these materials, databases are the most important instruments and the internet search engines also work well for searching information. The Chinese database Wanfang Data and the international database PubMed were used as main databases. The internet search engines used were also two; one is Google as international search engine and the other is Baidu as national search engine in China. Referring to this topic, rural health system, China, India and comparative study were used as the key words in search for the relevant research publications in the two databases and also through the internet search engines. Other than Pubmed which is specifically medical database, Wanfang Data covers all the research subjects. So the category of medical and health is set as the default option for searching. One article which is published in English in 2006, comparing some developed countries and regions in Asia [4], was translated and published twice in Chinese in a Chinese journal by two different researchers in Through comparing the two versions, the original one and the translated one, it was concluded that it was much better to read the original article in order to avoid cultural background differences and misunderstandings. Moreover, in some articles the references were not cited in a standard way, which was also paid attention to in this study. In India, all the literal materials such as official documents and articles were written or published in English, so it was much easier to read and cite directly. However, 8

10 most of the documents in China were published in Chinese, except for those from the WHO, which required more time and work for the author in understanding and translating them from Chinese into English. 3.2 Methods of analysis This is a study on comparative analysis. When reviewing the collected articles, there were not many standard methods for comparative analysis found to apply, except for the notable classical comparative pedagogy [6] by George Z. F. Bereday. Bereday is professional in education, sociology, juvenile law, and especially well-known for comparative study in education [7]. His pedagogy has four steps in comparative analysis description, interpretation, juxtaposition and comparison. At the first stage of description, all the relevant information would be collected and described in detail clearly and logically to make it well understood; at the second stage of interpretation, it is necessary to look for the factors influencing the health systems stated at the first stage and analyze how the patterns were taken; at the third stage of juxtaposition, all the features or factors in the two settings should be systematically sorted and listed by summarizing and classifying in a certain way; finally at the last stage of comparison, all the similarities and differences will be figured out and compared according to the certain list and classification as the third stage. Examples of studies which applied Bereday s comparative pedagogy for comparative analysis in education are A comparative study on student loan system of high education between England and Australia [8], Comparative analysis on rules of sports law between China and Japan [9] and A comparative of the school societal interface in three countries [10], and so on. Since this method has worked successfully in comparative analysis in education, it might have been used in other subjects as a research universal tool for comparative studies. Among the collected literature, there is one article which had used Bereday s comparative pedagogy in health in 2008: Comparison of hospice care policy between China and the United States [11]. The authors described, interpreted, juxtaposed and compared the policies for hospice care between China and the United States to analyze the differences and similarities in aspects of plan categories, beneficiary inclusion criteria, service control mechanism, related regulations, and fund resources [11] between two countries. Then the authors found out the influencing factors for the hospice care policy making socioeconomic conditions, the overall quality of the population and the traditional medical theories [11]. This article could be a test to prove the reasonability of Bereday s comparative pedagogy in comparative study in health. 9

11 3.3 Literature search process Figure 2 Literature search process This thesis is a literature review, so one of the most important steps is managing literature. The Figure 2 shows the whole process of managing literature, including three stages searching for literature, filtering the collected literature and looking for useful information from the filtered literature and citing. There are three categories of the sources for literature searching, relevant organizations official websites and through the internet search engines. In the first category database, the international database Pubmed and the Chinese database Wanfang Data were selected as main database. When searching in the database, key words rural health system, China, India and comparative study were used, and there were 513 publications found. In Stage 2, reading all the abstracts, 457 publications were excluded if they were not related to one of the two criteria; one is relevant to the key words and the other is focusing on the comparative 10

12 study. In other words, some of the searched publications were not related to the topic of health system but they used specific methods for comparative study; meanwhile some were about health system but the authors did not use any comparative analysis. It would be preferred if the literature matched both criteria. Skimming for the overview of the 58 publications, there were 39 selected for full text reading to collect specific information and cite them or study the method for comparative analysis in this thesis. In the introduction part above some relevant previous studies were discussed. In the second category, the relevant websites included WHO, governments of the two countries and health related sectors. Types of information were documents, reports, country profiles, statistics, tables, graphs and other literal information like the short Indian history for background description of India in the results part. Then filtering all the documentations, 27 of them had useful data for this thesis, such as data about health indicators, short description of countries history and health system, policies from official documents under the health system and so on. In the third category, they were two internet search engines, Google as international one and Baidu as Chinese one. The search engines were for other required additional information which could not be found out from the first two categories. For example, when the words poverty trap and Bereday were introduced the first time in the thesis, not every audience has knowledge of these words, definitions of the words were required and they could be searched through the internet search engines. Another example was the currency rate. In table 1 the expenditure was discussed. This data was cited from a Chinese articles and the monetary unit was Chinese Yuan. But in this thesis it was necessary to convert the Chinese Yuan to the US Dollar by special website searched through Google. Under the literature search process, the literature were labeled with numbers and sorted in categories. 11

13 Results In this part the first two steps of Bereday s comparative pedagogy were applied to describe the two settings of rural health systems in China and India and interpret the background and influencing factors for the current situation. 4.1 China Background China is one of the oldest civilizations in the world, covering an area of 960 million square kilometers, full of rich and various natural resources and cultural heritage, with the largest population, about thirteen billion from the 5 th China National Census in 2000 [12]. The life expectancy at birth is 74 years, which is approximately the same as the regional 1 average 75 years, and higher than the global average 68 years; meanwhile the healthy life expectancy at birth is relatively lower at 66 years. Regardless of the different wealth groups, the Gross National Income per capita converting into Purchasing Power Parity in 2008 is 6,060 US$; and the per capita total expenditure on health is a little more than 400 US$ referring the statistics in In respect to some specific indicators of the utilization of health care services, setting the births attended by skilled health personnel and the measles immunization in 1-year-olds as examples, the percentage and coverage reached to 98% and 94% in 2000 [13]. In a tough and long history, China went through several wars and transformations, during which the country has been richer from poor and backward. After the founding of the new China in 1949, Planned-Economy system was adopted to stimulate economic recovery under the government regulations. With this system, another system named Hukou which is used to manage the population registration, in which all the citizens are registered as two types, one is Urban Hukou, and another is Rural Hukou. The two types of registration determine the different treatment and the welfare between people who are born in urban areas and who are born in rural areas. Nowadays in China, due to this kind of registration system, inequity between urban and rural areas exists in most social concerns. One of the aspects people concern most is the public health care, such as health resource allocation and health care service delivery. Under the condition that the socio-economic level is too low and all the social resources are limited to share, people born in rural areas with a rural hukou cannot have the same right and the equal treatment for health care services. In a survey on health expenditure for urban and rural residents in China by Zhang YM 1 China is located in the WHO Western Pacific Region. 12

14 and Feng XS [14], they showed the results of the survey in two categories between urban and rural residents. The expenditure is higher for urban residents than rural residents every year from 1999 to 2006, with a quite low ratio that no more than 0.3 (87.26/25.26), except the year 2006 with the ratio The health expenditure is increasing both for urban and rural residents, and the growths are respectively 153% for urban and 173% rural residents [14]. Table 1 Per capita health expenditure for urban and rural residents (US$) 1 Year Per capita health expenditure Urban Rural Only when the ones who have much more money than most rural residents, they could break the barrier to seek more and better health care in cities; nevertheless, they have to pay at a larger expense than urban citizens without a guarantee for exactly the same health care services. But for most rural residents, a serious illness would be considered the same as a natural disaster because of the inaccessibility or unaffordability for advanced health care services. In order to improve the health care in rural area and narrow the gap between rural and urban areas, the Chinese government has established a New Rural Co-operative Medical Care System (NRCMCS) [15], independent of the health care system for urban residents. It 1 The monetary unit was Chinese Yuan in the original article. The average rate of USD to 1 CNY was in March,

15 considers the special situation and the particularities of rural region and adapts to the demands of rural residents New Rural Co-operative Medical Care System in China In the year 2003, the Chinese government initiated the NRCMCS [15], following a period almost without a formal comprehensive rural medical care system, instead of the old collectivism-based rural medical system which had lasted for almost 40 years from 1950s to 1980s [16]. There are several influencing factors in a special economic and scientific situation seriously impacting the old system to stimulate the reform of health care system. The most important reason is that the market-oriented rural reform as the planned-economic system in China was broken. As the old planned-economic system collapsed, the corresponding old health system could not work in a new different setting any more, and it encountered the breakup as well. As a result, seeking health care became more difficult and even impossible for a lot of rural residents. On one hand, without the collectivism-based medical system, people had to pay for most health care services by themselves; meanwhile the reality was that they could seldom afford most services because of extreme poverty and they were likely to become much poorer and even suffered family bankruptcy because of paying for the health care services due to illness, a situation named the poverty trap [17]. On the other hand, the inequity between rural and urban areas reflected not only in economic and income levels, also in structure such as medical equipment and the level of skills of health workers, so even though a few people who could afford the health care services could not have the right medication or treatment. Under this situation, a new health system for rural area was required urgently in step with the new environment. The government has defined and cleared the objectives of the new system: 1) to improve the health of the rural population, 2) to reduce poverty due to illness, 3) to provide financial risk protection to patients with catastrophic health problems and 4) to increasing farmers' satisfaction with health services [18]. This NRCMCS was at first launched as an experimental project in some selected rural areas in China [16], aiming that the coverage was going to be extended progressively year by year till the year 2010 when all the rural residents are involved in this system to access the health care services. In this system, there are three levels of health centers, which are village clinics, township health centers and county hospitals. At the lowest level of small village clinics, due to the poor skills and equipment, and the limited health workers with an average of two doctors per population of 1,000, only the preventive and the primary health care services are available to rural residents [19]. It is able to meet the most basic demands of health care services. At the middle level of the township health centers as out-patient clinics, more different services are provided and among every 10,000 to 30,000 population there is one such township health center [19]. Another significant difference from the village clinics is that beds are provided for patients who need the hospitalized treatment in the township health centers but with very limited amount. At the third level are county hospitals, staffed by the professional health workers graduating from authorized medical schools and 14

16 equipped with a variety of medical instruments with advanced technology. For each county hospital, 200,000 to 600,000 people are served [19]. As the final level of health centers they accept the rural patients only if they suffer the most serious illness and cannot receive the appropriate treatment at the first two level health centers Financing mechanism Under the NRCMCS, one of the most important parts is the way of financing health care in rural area, which is also an innovation for the health system reform. It is called the New Rural Co-operative Medical Scheme (NRCMS), instead of previous rural co-operative medical scheme [20]. In this scheme, the old collective way of financing was abandoned, as the user fees had been charged to compensate for the reduction of the expense by the government as a result the accessibility to health care for the whole rural population was hardy gained. So it introduces a pool of fund as an insurance in which a certain financing mechanism and reimbursement structure are adopted to describe the proportions of the contribution the three stakeholders make respectively and how to reimburse the rural individual when they actually pay for the health care services. To operate the financing mechanism, there are two separate accounts for the insurance fund, one is the personal account, in which is the premium paid by each individual rural resident, another is the mutual account that collects the premium from the revenue of the central government and the local governments [15]. For the three stakeholders - the central government, local governments and the individuals - the proportions and the amount of premium are stipulated. The central government sets the minimum standard for the premium in principle; meanwhile the specific payment level could be decided by the provincial government itself adapting their own local situation such as socio-economic status and income of rural people above the minimum standard stipulated by the central government. The provincial government as a unit receives a proportion of the funding from the national financial allocation and put them into the mutual account. This is the contribution to the NRCMS by the central government as the first stakeholder. Then is the share of the local government. Since the provincial-level government is set as a unit to collect funding from the central government, the provincial government is the second stakeholder that is responsible for another part of the total contributions. This part is rolled into the mutual account as well with the funding from the central government. The two contributions of pooled premium are managed by the provincial government and are going to be allocated to counties and towns for reimbursement. That is the way the new system is pooling the risks and the contributions. As the individual stakeholder, the rural residents share the smallest proportion of the contributions. The payment from rural individuals goes to the personal account and is in the charge of the township financial bureau. The contributions of three proportions are collected once a year from each stakeholder [15]. 15

17 However, due to the serious differences in both socio-economic development and people s income between relatively better developed regions in the eastern part of China and the poorer regions in the middle and the western parts of China, the real proportions of contributions from the central government and the local government are not the same. Only for the areas in the middle and the western China, where the economic status is bad and people are poor, would the central government shares a part of the premium. For the rest parts, including the eastern rural areas and few better areas in the middle and western parts, the contributions are mainly paid by the provincial government without the subsidies from the national financing allocation by the central government. So in the complex situation of China, people in urban and rural areas, or in developed and developing regions have different health systems, as well the NRCMCS does, having different standards in different settings. In the year 2003, the first official document about implementing the NRCMCS was released by the Ministry of Health in China [15], indicating the financing mechanism of pooling the fund. In that document, a total amount of premium was set at 4.40 US$ 1 per person. Among the 4.40 US$ premium, 1.47 US$ for the personal account, that was only about 33% of the total premium, was collected from rural individuals. For another 2.93 US$, in the middle and western parts of China, the central government and provincial government paid 1.47 US$ each into the mutual account; in the eastern part of China the provincial government would be responsible for the rest 2.93 US$. Besides, in some developed provinces, the amount of the premium might be increased a little, which could be decided by the provincial government itself. When this document was released the first time, the new system was considered as an experimental project only in some selected counties. The system has been improved year by year, more and more counties have adopted the trial. The NRCMCS has been officially established and about to gradually cover the entire China. Progresses have been made since the system initiated in 2003, reflecting on the level of premium. The first change happened in 2006 [21]. The central government decided to increase the premium as the GDP increased with a higher income and costs for living in China. The previous level of premium was not enough to pool the risks among rural population in order to afford all necessary expense on health care services. The first improvement happened in 2006 in the official document by the Ministry of Health in China, aiming to reach the amount of premium from 1.47 US$ to 4.40 US$ both by the central government and the provincial government during 2006 and This policy was carried out for farmers living in the middle and western parts of China and farmers in better developed eastern part were still supported mainly by the provincial government without the national financial allocation. Henceforth the level of the pre-paid premium has been raised gradually in the year 2008, 2009 and 2010 [22]; moreover, since 2008 the central government to some extent has contributed a small proportion of subsidies to the NRCMS for farmers in the eastern part of China 1 The monetary unit was Chinese Yuan in the original documents. To compare the money in Table 2, it is refered to the currency rate in January, USD to 1 CNY was

18 without certain specific amount or proportion. According to the latest official document about the NRCMCS, till 2010 the total pre-paid premium is set at US$, with 4.40 US$ paid by individuals which takes up only 20% of the total amount and the rest US$ contributed by the central government and the provincial government [23]. Table 2 Annual contributions of pre-paid premium by individuals and the government (US$) Year Individual farmer Central/Provincial Government Total Obviously the trend of the input of pre-paid premium has been largely rising every time a newer version of the official document released. From 2003 to 2010, the total premium increased by 400% from 4.40 US$ to US$; among them, the share of individuals raised much slower at the rate of 200% than the total amount and the share of the government with 500% high growth. Comparing the two different payers, the growth rate of the government s contribution is quite higher than that of the individuals contribution. The proportion of individual s payment decreased,with an increased proportion from the government s payment. It is easy to find out that the Chinese government has carried out a series of policies and provide more financial supports to ensure the successful implementation of the NRCMCS. In principle the NRCMCS and the NRCMS are voluntary. That means farmers in rural areas could decide whether to participate in this scheme or not and nobody would be constrained to enroll in it. However, due to the active encouragement from the government with a large amount of subsidies and improved health care services to secure farmers primary health care, most farmers changed their attitude to participate in the scheme. As a result, the coverage among rural population has rapidly extended during these years, from tens of pilot counties to almost the entire rural population nowadays. 17

19 4.1.4 Reimbursement structure The central government formulates several main models for the insurance benefits and the reimbursement. These main models guiding how to use the premium funds to pay for the health care services are covering both inpatient and outpatient care, covering inpatient and high cost outpatient care, covering inpatient care only and covering inpatient care with pooled government contributions and covering outpatient care using household contributions as savings accounts [20] an account shared within a family in which there should be a certain proportion of each family member s premium was rarely used and finally abolished because of its weak function. In practice, since situations and socio-economic levels varies widely in the whole country, each provincial government has the authority on the base of these main models to make the specific regulations and standards for the reimbursement in their own province and the counties within it are responsible for the implementation and administration of the scheme. So every provincial government has designed a specific benefit package determined by the available funds from the government and individuals, farmers income and costs of the health care services in rural areas. They set the deductible that is the minimum payment by the individual farmers and the ceiling that is the maximum reimbursement supported from the pooled premium contributions. The government prefers to use most of the funds to pay for higher cost services which are coming more from the inpatient care services, according to the third model mentioned above covering inpatient care only, for the total contributions pooled from the individuals and subsidies earmarked from the government have not yet been enough for most health care services. But recent years the government has concerned about outpatient health care a little more than before. Thus in a few provinces policies in reimbursements for outpatient health care services have come out. In general among the whole country the average reimbursement rate is estimated of 30% to 80% for inpatient services [20]. The reasons why the top rate and bottom rate vary much are firstly different provinces have different levels for reimbursement on the basis of their economic levels and health care conditions, secondly different reimbursement rates are also determined by different medical facilities and equipment and various health care services. In respect to the three levels of health centers, the payments covered by the scheme have differences as the rate of reimbursement is approximately from 70% to 80% for the health care services at the lowest level village clinics and the middle level township hospitals and about 60% at the highest level county hospitals. For some rare illnesses which are not able to be cured in the three levels of health centers, there is a policy about referring these patients to larger hospitals in cities outside the counties. Under this circumstance, the costs would be covered at about only 30% by the scheme and the rest have to be paid by the farmers themselves. 18

20 Example 1 Here is an example about the reimbursement in Jiangxi Province in the middle part of China. According to the official document released by the Department of Health in Jiangxi Province in 2006 [24], in this model the scheme focused on covering the costs for inpatient health care services which cost more than outpatient health care services. Table 3 Reimbursement structure for inpatient care in Jiangxi Province in 2006 Levels of hospitals Deductibles (US$ 1 ) Ceilings (US$) Reimbursement rates Township hospitals % County hospitals % Appointed advanced hospitals outside county % Un-appointed advanced hospitals outside county % As in Table 3, for the inpatient care, the deductibles of the payment were US$, US$, US$ and US$ respectively for health care service for one single disease at township hospitals, county-level hospitals, appointed advanced hospitals outside the county and un-appointed advanced hospitals outside the county. Farmers had to pay what was below the deductibles by themselves and the excess amounts over the deductibles were paid by the scheme. The corresponding reimbursement rates for the four types of hospitals were 60%, 50%, 40% and 30%. The ceiling amount of the reimbursement was fixed at US$ within one year. In addition, every case of childbirth would receive an additional fixed subsidy of US$ and the fees for the childbirth would be paid as usual. When farmers were treated by the traditional Chinese treatments and medicines in appointed hospitals, the imbursement rates could raise by 10% in the same level hospitals [24]. 1 The monetary unit was Chinese Yuan in the original report. The average rate of USD to 1 CNY was in December,

21 Example 2 Another example is from Shanxi Province. In the speech debrief from Shanxi provincial government in a national conference about the NRCMCS in 2007 [25], data about the imbursement amounts and rates were reported. In the year 2004, the total amount of imbursements was 1,554,630 US$ 1 by the NRCMS; meanwhile there was 1,145,102 US$ covering the inpatient health care services, which took up 74% of the total imbursements. Among the total expenditures for inpatient care both from farmers out-of-pocket money and from the scheme, the proportion by the scheme was 28% and the rest 72% was coming from out-of-pocket money. In the year 2006, the total amount of imbursements was 52,938,600 US$ by the scheme, increasing a lot by 3300% compared with the amount in 2004; the amount of imbursements for inpatient health care services was 47,373,260 US$, 89% out of the total. Among the total expenditure for inpatient care the proportion by the scheme was increasing to 35% from 28% in Compared with non-imbursements for outpatient health care services in Jiangxi Province [24], the Shanxi provincial government made efforts to covering some of the costs of outpatient health care services. 4.2 India Background India, a neighbor country of China in South Asia, has the second largest population of 1,181,412 thousands in the world, out of which there is 71% population living in rural areas, and covers the land 298 millions square kilometers. The life expectancy at birth and the healthy life expectancy at birth for both sexes are 64 years and 56 years, referring to the year 2007 [26]. Both are lower than China by 10 years. The Gross National Income per capita converting into Purchasing Power Parity is 2,930 US$, at a quite low level compared with the regional 2 average 3,063 US$ and the global average 10,307 US$ [26], so that it is conceivable that per capita total expenditure could not be high. As the same as the regional average level, it has only been about 40 US$ in the year In terms of the utilizations of health care services, considering the same indicators as China, the coverage of births attended by skilled health personnel and the measles immunization in 1-year-olds are respectively 47% and 70% from the latest statistics in 2000 [26]. Since India is another large and historic country besides China, it is not only well known for its self-sufficient agricultural production and electronic industry, and also for credible histories, namely the Ancient History [27], Medieval History [28] and Freedom Struggle History [29], especially for the last one the Indian Freedom 1 The monetary unit was Chinese Yuan in the original report. The average rate of USD to 1 CNY was in December, India is located in the WHO South-East Asia Region. 20

22 Struggle lasting from 1857 to After a long and tough struggle named a non-violent resistance for independence the colony by the United Kingdom was terminated and India became an independent nation in the year 1947 [29]. At the same time, a planned economy system based on the mixed economy was established to relatively balance the relation among different interest groups through controlling of industry by the central government. This system met the needs of various features of different social classes and had worked well as it successfully stimulated the economic progress till the 90 s in twenties century. Afterwards, shortcomings appeared gradually to slow and even impede the further progress, which pushed the Indian government to abolish the planned economy system and adjust the policies to eliminate the barriers, so that new free market principles were initiated in 1990 [30]. Due to the economy transformation, the population below the poverty line became smaller as the economies grow. However, India faced a similar situation in China that the gap in socioeconomic development between urban and rural areas was larger and larger, and the income of different groups increased in a significant non-proportional way, resulting in a serious inequity in wealth and social resources. A marked difference exists in allocation of health care resources and the skills of health workers and the level of medical equipment in rural areas could not compare with that in urban areas. In Figure 2, the situation could be illustrated obviously in a set of data collected every five years about the coverage of population using improved water and sanitation. From 1990 to 2010, for rural areas the percentages of population using improved drinking-water sources rose from about 65% to 75% and that using improved sanitation facilities rose from no more than 10% to about 15%. As above the numbers for urban areas are respectively from 90% to 95% and from 45% to 50%. Though the numbers increase at a higher rate in rural than in urban areas, there is still a big gap between the two groups [13, 26]. Comparatively, in the early 90s, the situation of improved drinking-water sources in China was not better than India, even with wider gap between urban and rural areas. In urban area the percentage has almost been 100% from 1990 to 2010, meanwhile the coverage in rural area was in a low level and has been improved well, from less than 60% to about 80%. For the improved sanitation facilities, the difference between urban and rural areas is smaller than India, due to the relatively higher percentage of rural residents. In a word the same trend as in India is that the coverage of improved drinking-water and sanitation facilities is both increasing in the two decade years [13]. 21

23 Places of residents: Urban Rural Total Figure 2 Population using improved water and sanitation in India (above) and China (below) Under this circumstance, the Indian government also made a special Three Tier system the Rural Healthcare System, to solve the problem that it is too hard for rural residents to seek health care services and reduce or eliminate the inequality and inequity between different regions Rural Healthcare System A Three Tier System in India After the independence of India colonized by the United Kingdom, a western model of health care system had been applied following the history of the colonial period. In this institutionalized western model, the power was centralized by the top level and all the policies were implemented from top to down; thus the policy makers in the central government could barely concern what the population at the bottom of the society really lacked and needed. That was easily resulting in unfairness between people living in different classes in the society, reflecting in treating people as objects rather than subjects [31]. Since India is a country with an absolute majority population in poor rural areas which was no less than 71% [26], this kind of selective system has caused a majority of the whole population neglected by the policy makers 22

24 and living without a necessary secure health condition. Therefore, abolishing the backward system which was very inappropriate for India s situation and establishing a new one became an imperative issue for the country. Furthermore, the inequity between urban and rural areas has been a long lasting social problem. In order to stimulate and make the social production recovered from the colonial period, the Indian government put more efforts in the economic development, but ignoring the basic structure for people s education, health care and the living condition. The increases of the income for workers in urban and rural areas were not proportional markedly. Although as the economy grew rapidly the number of the people living under the poverty line became a little smaller, the way of focusing only on boosting the economic development led to a much wider gap in each aspect such as education and health care between urban and rural areas, which would push the country as a whole into a worse imbalance. So the Indian government had to concern more with the rural situation and reduce the differences for the balance of the entire society. What is different from China is that the top official organization of health in China is the Ministry of Health and that in India is the Ministry of Health & Family Welfare. Most documents and regulations are released by them. When the Indian government intended to run a universal healthcare system to ensure the entire population could afford the basic health care services, the Ministry of Health & Family Welfare established and maintained the healthcare system. Out of the whole health care system covering the entire country, the government established a special three tier system in India as a Rural Healthcare System (RHS) in the early 80s in 20 th century, with the most important official document in health sector in India the National Health Policy, which was firstly endorsed in 1983 and updated years later in 2002 [32]. As the name three tier system implies, similar as China as well, there are three levels for the rural health care services structure and they are Sub-Centers (SCs), Primary Health Centers (PHCs) and Community Health Centers (CHCs) from the bottom level to the top level. Upper levels of health centers take charge of larger populations. Here is the table to show the scales of different health centers at different levels. Due to different conditions of geographical environment, the numbers are distinct on one level of healthcare centers, as the two columns below plain areas and hilly or tribal areas. 23

25 Table 4 Structure at three tiers in Rural Healthcare System in India Population Norms Referral unit Centers Hilly/Trib Plain Area al Area Staff Beds for lower-level Sub-centers 5,000 3, Primary Health Centers Community Health Centers 30,000 20, ,000 80, The first tier sub-center (SC) is the most peripheral health center, which is staffed with only three persons, one female health worker, one male health worker and a voluntary worker. Every six sub-centers are under supervision of a certain lady health worker. Each sub-center will take care of 5,000 and 3,000 rural populations respectively in plain areas and hilly or tribal areas as the tale showing above [32]. The sub-centers have two main duties. The first one is the communication work like assigning tasks. The second one is providing healthcare services and some basic drugs. All the services provided by the sub-center relate to the basic health needs, such as immunization, nutrition, maternal health, communicable diseases control and so on. Compared with the primary health center and the community health center, the sub-center is only responsible for the healthcare services about the most basic and essential needs, but not about the very complex diseases to be diagnosed and cured, due to the limited resources of health workers and techniques [32]. The second tier is the primary health center (PHC). Some primary health centers are originated from the upgraded rural dispensaries. It is in charge of the state governments. Every primary health center ought to be a referral unit and a supervisor for six sub-centers and cover the populations of 30,000 in plain areas and 20,000 in hilly areas [32]. The primary health center has much more workers and equipment than the first tier the sub-center, with one medical officer and another 14 skilled health workers in various aspects, and 4 to 6 beds. It functions to provide preventive, promotive and curative healthcare services, instead of essential health needs, for which it is at an advanced level compared with the sub-center. But it is only able to deal with the diseases not so serious. For those who are very ill or need the hospitalized treatment, they will be referred to the community health centers or even upper-levels of health centers and hospitals that are not belonging to the structure of the Rural Healthcare System [32]. The third tier is the community health center (CHC). As the top level of health center in Rural Healthcare System, every community health center covers 120,000 and 80,000 populations respectively in plain areas and hilly or tribal areas, with 30 beds 24