China's failed experiment with the market
From A National, Centrally Planned Health System To A System Based On The Market: Lessons From China
By Jin Ma, Mingshan Lu and Hude Quan
Health Affairs
July/August 2008
No other country has undergone health care reforms as dramatic as China’s. Starting in 1978, China reformed its health system from a governmental, centrally planned, and universal system to a heavily market-based one. Now, three decades later, the Chinese government openly acknowledges that the reforms failed and seeks new directions. This paper adds to the literature by examining China’s health care from a system perspective, describing its health services delivery, access, outcomes, and population health in the post-reform era. It also identifies the main issues in the current system and highlights the key lessons learned from China’s reform process.
http://content.healthaffairs.org/cgi/content/abstract/27/4/937
When Incentives And Professionalism Collide
By William C. Hsiao
As Jin Ma and colleagues observe, an unfettered market approach in China has reduced access to care, increased patients’ financial burden, and reduced emphasis on prevention and may have caused declines in quality and outcomes. A major driving force was that perverse incentives altered physicians’ behavior toward self-interest at the expense of patients, even where professional ethics dictated otherwise. Other nations, including India, are grappling with the profit motive and its consequences. Chinese leaders are attempting to deal with these problems by expanding public investment and reducing perverse incentives. However, profit motives remain a powerful, potentially offsetting feature of a reformed system.
http://content.healthaffairs.org/cgi/content/abstract/27/4/949
Comment:
By Don McCanne, MD
Fundamental human ethics and mores are the same the world around.
There are those of us who believe that the people of the United States possess some sort of a superior intellect that allows us to use the sterile tools of market economics to provide a better life for all of us, at least for those of us who are willing to put in a greater effort, without any compromise whatsoever in our ethical and moral principles.
Some of the intellectuals in China had decided that using market dynamics was just the solution that they needed to help modernize the Chinese health care system. Sterile, amoral business decisions allow the leeway to bring out the best in us… and the worst. China got the best for a few, and the worst for the many.
Our health care system represents both the best and the worst, but now is so expensive that we have reached a point that we must realign incentives to promote the best for everyone, and discourage the worst that is draining our resources while benefiting primarily those who are capitalizing on the market.
China’s great experiment with free market health care demonstrates, once again, that mankind’s mores and ethics are best supported by social solidarity, rather than by the market, when establishing policies designed to benefit us all. It is a lesson that most other nations have learned, but one with which we are still struggling.