Health care should be diversified, official says;
Private sector should get a larger role in overhaul, vice-minister of finance argues

NEWS; Pg. 4

Josephine Ma in Beijing

Beijing will encourage the private sector to take a bigger role in health care as the government hammers out an ambitious plan to overhaul the inefficient health system, says Vice-Minister of Finance Wang Jun .

Speaking at a forum on public-private partnerships (PPP) co-hosted by the central government and the World Bank's investment arm, the International Finance Corporation, Mr. Wang said: "For the next step, the Chinese government will encourage and channel social capital into the sector so that investment in health care provision is diversified and multi-channeled."

Health Minister Gao Qiang had said in an interview with the Southern Weekend newspaper that the government would reduce the number of public hospitals but increase investment in them.

Speaking on the sidelines of the conference yesterday, Vice-Minister of Health Chen Xiaohong said an inter-ministerial working group on medical reform was mulling how many public hospitals the mainland should have.

At present, 2,027, or 10.8 per cent, of the hospitals operating and 146,000, or 50.4 per cent, of medical institutes nationwide were privately run, he said. Only 3 per cent of beds are in private hospitals, and the private health care sector employs only 9 per cent of medical staff, suggesting it has room to play a bigger role.

However, Mr. Chen reiterated the government's stance that the public sector would be the main provider of health care services, and warned that government procurement of health care services from private institutes could result in higher costs.

IFC vice-president Farida Khambata said it would take more experiments before China could find the right model, given the relatively small proportion of health care services provided by the private sector.

"Since the involvement by the private sector in health care in China is relatively new, the process of establishing the right mix of public and private support will remain experimental until the right balance is found," she said.

Henk Bekedam, the World Health Organization representative in China, said there was a consensus that the mainland's health care system was "sick" and the diagnosis was clear - health care is unaffordable and inaccessible.

But he cautioned that more government medical expenditure may not necessarily solve those problems. People might still face big medical bills and could be plunged into poverty if reforms did not work despite increased government investment in the medical system, he said.

Guan Zhiqiang , director of the division of health insurance research at the National Institute of Social Security, said the government was looking at the efficiency of public spending on health care in other countries.

The institute is run by the Ministry of Labour and Social Security.

March 21, 2007