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Time:March 18-20, 2017
Beijing Diaoyutai State Guesthouse
Sponsor:Development Research Center of the State Council
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Mizuho Financial Group:Health Policy in China Lessons from Japan

Abstract


Since 2009 China has made giant strides in both public health infrastructure and provision of care to her citizens, achieving near-to-universal health insurance coverage of over 98% in 2012, and bringing its numbers of hospital bed figures in line with OECD nations. However, medical resources, including doctors and medical equipment, are disproportionately allocated to third tier hospitals located in cities. This means that patients tend towards these institutions, leaving general hospitals underutilized, contributing to issues such as low bed occupancy rates.


There is a clear need for more efficient medical and long-term care service delivery infrastructure. Health care expenditure in China is already USD665.6 billion (second in the world after the United States), with forecasts projecting it to grow to USD1.1 trillion in 2021 due to increasing numbers of elderly citizens and an increase in lifestyle diseases. The Chinese government has begun to take measures—primary care infrastructure, promotion of the hierarchical (tiered) system, and trial projects in long-term care, among others—to further improve access to health care and increase efficiency of provision systems to stop “the country getting old before it gets rich”. “Healthy China 2030”, a government roadmap published in 2016, places great emphasis on preventing diseases to both curb the spread of illness and release pressure on government spending. It will be important to watch to what extent the country can achieve the goals set out in this roadmap.


Japan previously succeeded in tackling a similar issue as the one China is currently faced with, achieving a universally accessible and egalitarian health care system by promoting development of service delivery systems. However, in the 1990s keeping the social welfare system afloat both financially, and in terms of care provision became an issue as the country entered a period of population onus (where the percentage of the population which is working age is exceeded by the percentage of non-working age) during which insurance premium receipts fell due to a falling working age demographic. This, together with the higher cost of medical and long-term care due to increasing longevity and an ongoing transition towards demand for treatment for lifestyle diseases, coupled with shortages of medical professionals, have presented a number of challenges for the country.


The Japanese government launched the Comprehensive Reform of Tax and Social Security (2012), an ongoing initiative to secure financing for the country's social welfare system through increases in the rate of consumption tax, and overhauling provision frameworks for medical and long-term care, to achieve the goal of effectively utilizing resources to meet the peak in advanced medical and long-term care needs projected for 2025. The two main ways the plan sets out to achieve this are: through better distribution of clinical functions and the introduction of a community-based integrated care system. These kind of reforms, which are gaining momentum, are characterized by ideas such as the introduction of incentives and systems aimed at preventing illness(as opposed to the traditional treatment based model) as well as initiatives in utilizing private sector expertise and capital to improve the quality of public sector services. We feel that using Japan's experience as a case study will be beneficial to China because it shows how a country in a similar position actually approached the issue, as well as what could have been done better in hindsight.


We believe that the Chinese government will need to build in the flexibility needed to deal with a lower birthrate and shrinking population to its service delivery frameworks from square one. We propose the following two points.


The first is a community-based integrated care system for China. A community-based integrated care system is designed to allow elderly patients who require constant care to live out the rest of their lives in familiar surroundings. It makes medical and long-term care resources work harder through a system of collaboration in service delivery, encompassing living arrangements, medical and long-term care, and other everyday clinical and non-clinical support. We believe that integrating primary care institutions in rural areas, and use of the hierarchical (tiered) system in urban areas, is an effective way to both improve access to health care and establish efficient service delivery systems.


The second point is the introduction of a “Wellness Point” project as an incentive-based system. As China improves its health infrastructure and achieves universal access to health care for all citizens, there is a high probability that it will also experience an increase in citizens apathetic towards their health and wellbeing, just as Japan did. We feel that by introducing an incentive-based system similar to Japan's Wellness Point Project, China will be able to change the mindsets of its citizens who may not currently pay enough attention to their health and wellbeing, whereby stemming the increase of future medical and long-term care expenditure. 


Increased longevity is often seen as a negative; an increase in social welfare spending. But we feel that there are a number of potential benefits that can be enjoyed by both countries and citizens, provided that those countries support their elderly populations in leading long and fulfilling lives. We also reason that there is a clear need for the government to create systems that focus on continuous re-education and re-training of workers already in the workforce.


Universal good health is one of the keys to the future prosperity of China as a global superpower.


 
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