HEALTH POLICY AND SYSTEMS RESEARCH IN CHINA
Item
- Title
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HEALTH POLICY
AND SYSTEMS RESEARCH
IN CHINA - extracted text
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HEALTH POLICY
AND SYSTEMS RESEARCH
IN CHINA
O. Meng
G.Shi
H. Yang
M. Gonzalez-Block
E. Blas
In partnership:
China Health
Economics
Institute
World Health
Organization, China
UNICEF/UNDP/World
Alliance-HPSR
Bank/WHO
Special Programme for Research and
Training in Tropical Diseases (TDR)
Co intends
Terms and abbreviations
iv
Foreword
v
Executive summary
vi
i
Background
I
2
Policy context and challenges
2.1 The five balances
2.2 Health policy-research dialogue
........ . . 3
4
Research evidence for the nth Five-year Plan
5
3.1 Globalization and macroeconomic trends
....... 5
3.2 Population and health status trends ...
6
3.3 Economic reform and health care financing
7
Sources offunding.....................
....................................................................7
Allocative efficiency
..........
Equity
8
8
Organization and delivery of public health programmes
Ownership and governance
Cost containment and regulation
Provider performance management
National policies - local implementation strategies
9
II
II
12
13
Research needs and systems
4.1 Current research needs to close gaps in knowledge
4.2 Likely future research needs to close gaps in knowledge
4.3 Gaps in research capacity
4.4 Options for closing the gaps
IS
IS
16
I7
I8
18
18
19
19
Insurance
3.4
3.5
3.6
3.7
3.8
4
.... 1
...
............................
Improving the research-policy dialogue
Contracting-out and commissioning of existing institutions ....
Creation of new institutions ....
Capacity building for policy and systems researchers and policy-makers
5
Conclusion, strategy and way forward
20
Annex: Directoryof health policy research institutions
21
References
22
About the Authors ......................... ............................................................................
24
HEALTH POLICY AND SYSTEMS RESEARCH IN CHINA - TDR/GEN/SEB/04 1
3
3
...
Terms and abbreviations
AIDS
Alliance-HPSR
CDC
Acquired immunodeficiency syndrome
Alliance for Health Policy and Systems Research
Center for Disease Control, a public health institution with responsibility for disease prevention
and control in China
CMS
Cooperative Medical System, a community financing scheme for health services in rural areas
of China
COPD
CT
Chronic obstructive pulmonary disease
Computerized tomography
DFID
Department for International Development, UK
DOTS
Directly Observed Treatment Strategy for Tuberculosis
EPI
EU
GDP
Gini coefficient
Expanded Programme of Immunization
European Union
Gross domestic product
A measure of income inequality, is a number between o and t, where o means perfect equality
(everyone has the same income) and i means perfect inequality (one person has all the income,
everyone else has nothing)
HIV
Human immunodeficiency virus
IDRC
International Development Research Centre. Ottawa,Canada
INCO
International Cooperation (EU)
MRI
Magnetic resonance imaging
NGOs
Nongovernmental organizations
PET
Positron emission tomography
R&D
Research and development
SARS
TB
TDR
Severe acute respiratory syndrome
Tuberculosis
UNICEF, UNDP, World Bank, WHO Special Programme for Training and Research in Tropical
Diseases
UK
UNICEF
UNDP
USA
United Kingdom
The United Nations Children's Fund
United Nations Development Programme
United States of America
WHO
World Health Organization
WTO
World Trade Organization
Foreword!
In 2003, the Chinese government proposed its strategy for achieving a Xiao Kang society, which is
people centered and based on a comprehensive, coordinated, and sustainable development concept.
A development plan based on five balances between urban and rural areas, regions, social and eco
nomic sectors, humans and nature, and domestic and global markets, is the main strategy of the new
development concept. Health is an essential element of a Xiao Kang society - if the health of all peo
ple is not improved, it will not be a Xiao Kang society. Thus more attention must be paid to health due
to its importance in social and economic development.
Over the past half century, China has, with very limited resources, made progress in improving the
health status of its people, and this has been recognized throughout the world. China now provides
widely accessible services to most of its 1.3 billion head of population. However, compared to the aims
of a Xiao Kang society, still more needs to be done to improve the health system.
Health sector reform and improvement of the health system requires research to provide scientific evi
dence of the need to re-examine existing health policies and create more effective policies for the
future. Over the past two decades, great progress has been made in health policy and systems
research, and this has impacted positively on health reform and policies.
This document, prepared by the China Network for Health Economics, WHO, TDR, and the AllianceHPSR, is a product of the Health Policy Forum held in May 2004 in Beijing, with the participation of
high-level policy-makers from central and provincial levels as well as researchers. The document
describes the social and economic context of the country, carefully considers the opportunities and
challenges facing the government in public health, and systematically summarizes key research find
ings relevant to policy-making. More importantly, it identifies knowledge gaps and proposes a number
of options for filling these gaps.
I believe that this document will be helpful for Chinese as well as international readers wishing to
understand Chinese health policy-making and systems research, and for identifying areas of coopera
tion I hope the document will be given the attention it deserves.
Renhua Cai
Professor and Executive Director
China Network for Health Economics
October 75, 2004
Executive summary
In the past three decades, along with rapid economic
natural environment, and between the domestic and
development in China, the overall living standards of the
international markets. The five balance policy provides
population have generally improved. However, disparities
both opportunities and challenges for health sector poli
in social and economic development between urban and
cy-makers and practitioners.
IN CHINA • TDR/GEN/SEB/04
1
rural areas, between the eastern and western regions,
and between the rich and the poor have increased The
The context of policy-making has significantly changed
health status of the population has improved, but the
over the past years with increasing awareness among
rate of improvement has reached a plateau. While non-
senior officials of the importance of evidence-based pol
communicable diseases have become the major disease
icy-making. This is primarily a result of greater openness
burden, infectious diseases such as tuberculosis, hepati
in the society to constructive dialogue and critique, i.e.
tis. and schistosomiasis are still the major health prob
to learning from success and failure, including among
lems in poor rural areas HIV/AIDS and other emerging
the political leadership The outbreak of SARS played an
diseases such as SARS have become new threats to pub
important role in opening eyes to the need for critical
lic health. Wide disparities in health status exist, eg.
review of the sector.
infant and maternal mortality are more than two times
higher in rural than in urban areas and in the western
The key research evidence relevant to the nlh Five-Year
compared to the eastern region
Plan can be grouped under eight headings.
• Globalization and macroeconomic trends. The devel
The social and economic transitions experienced since
opment of the labour market might have far reaching
the late 1970s have brought changes to the health sector
health consequences, the changes in lifestyle will
including its partial marketization and privatization.
Concerns have been raised by research related to
financing, efficiency, regulation, equity, quality, and cost
of health services. China faces a number of major chal
lenges in the future, including: increased globalization,
population migration, and demographic and epidemiolog
ical transition. How these challenges are addressed will be
critically important for the coming generations.
Over the past decades, significant changes in Chinese
society have affected the health sector in these ways:
• responsibilities have been rearranged between all five
result in increase of noncommunicable diseases
• Population and health status trends There is evidence
for higher prevalence of communicable diseases and
relatively worse child and maternal health in poor and
migrant populations; new health challenges are facing
China with its social and economic development
• Economic reform and health care financing. The intro
duction of financing through user-fees has significant
ly impacted equity in the society, and there is low effi
ciency in the allocation of public resources for health.
levels of government (national, provincial, prefecture,
• Organization and delivery of public health pro
county (district), township) in the economic and social
grammes. Several changes in policy have had adverse
sectors;
effects on the performance of public health pro
• individual rather than collective arrangements now
play a greater role in providing social services,
grammes and possibly on disease patterns
• Ownership and governance. There is no conclusive sci
• market mechanisms and forces have been applied to a
entific evidence that the new ownership models have
wide range of services and exchanges in the society;
had the intended impact; on the contrary, both the
• part of the public or collective sectors has been pro
gressively privatized.
public and privately owned health services operate
along the same lines and lack willingness to engage in
e g. preventive services.
The n,h Five-Year Plan will address the main shortcom
• Cost containment and regulation. There has been very
ings through the policy of five balances: between rural
limited success, if any, in containing costs in the health
and urban areas, between regions, between economic and
sector because providers find ways to compensate the
social sectors, between economic development and the
losses posed by the control attempts.
fied for the nth Five-Year Plan and beyond, e g. in relation
to:
• transformation of the health financing system in the
context of the economic transition, urbanization, and
globalization of China
• re-orientation and development of the public health
system in the next 10-20 years based on situation
analyses and projections of future health problems
• the opening and regulation of the health care market
• the pricing system reform, the tax waver policy to pri
vate investors in the health sector, and the enforce
ment of regulation in the health care market
• transformation of the health care delivery system in
accordance with regional health planning to promote
improved allocative efficiency in the sector.
• the massive population movement from rural to urban
areas.
However, there are shortcomings in current policy and
systems research in China. These include:
• lack of a health policy and systems research agenda
agreed by policy-makers and the research community
• lack of a bridging mechanism between policy-makers
• Provider performance management. Several cases
suggest that staff bonus systems have had detrimen
tal effects on public health.
• National policies - local implementation strategies.
and researchers
• lack of incentives for researchers to participate in prac
tical policy and systems studies
• weak capacity
Health policy-making in China is very complex and
• customary lack of critical independence
there is evidence of considerable discrepancy between
• unfeasibility of policy recommendations
the actual national policies and what happens on the
• lack of funding opportunities for health policy and sys
ground, including non-compliance with official dis
tems research projects.
ease control policies.
Possible options for closing the gaps in research capacity
In the past decade, health policy and systems research in
could include improving research-policy dialogue by the
China has made significant contributions to knowledge
contracting of existing institutions through rigorous
and understanding of the complex transition of the soci
competitive processes rather than through the creation
ety, and there are concrete examples of research which
of new institutions.
has been translated into policy. However, many policies
are still formulated on the basis of weak or no evidence,
and health policy implementation is not systematically
evaluated. There is a long way to go before health policy
and systems research reaches its full potential. Improved
communication and dialogue between researchers and
policy-makers will be critical to achieving this. Several
health policy and systems research needs can be identi
<sr_:
HEALTH POLICY AND SYSTEMS RESEARCH IN CHINA - TDR/GEN/SEB/04 ’
1 Background
Over the past two decades, China has experienced dra
[Ministry of Health, 2004a] While noncommunicable
matic changes in both its social and economic structures.
diseases have become the major disease burden, infec
The market-oriented economic reform successfully sus
tious diseases are still prevalent and are the major health
tained an average growth rate of 8.3% in gross domestic
problems in poor rural areas Tuberculosis, hepatitis, and
product (GDP) between 1980 and 2000 [Hu and Hu.
schistosomiasis are the common public health problems,
2003], and the per capita GDP reached US$ 1090 in 2003.
while HIV/AIDS and other emerging diseases such as
While the overall population growth rate has slowed due
SARS have become new threats to public health In addi
to effective family planning policies since the mid 1970s,
tion, the ageing population and the changes in lifestyle,
the urban population has increased significantly due to
including smoking and dietary habits, are resulting in
migration Along with economic development, the over
changes in health service needs
improved. Monthly disposable income of urban and rural
Wide disparities in health status exist, eg. infant and
residents increased from 478 and 191 Yuan in 1980 to
maternal mortality are more than two times higher in
1049 and 337 Yuan in 2002, respectively, after adjustment
rural than urban areas and in western compared to east
for inflation [National Bureau of Statistics, 2003].
ern regions
Disparities in social and economic development between
China's health care system was developed in three tiers,
urban and rural areas, between the eastern and western
ie village doctors and clinics, township health centres,
regions, and between the rich and the poor have grown.
and general hospitals in rural areas; and community
There are, at present, 30 million people in rural areas liv
health centres (stations), district hospitals, and tertiary
ing in poverty according to official reports, most of whom
hospitals in urban areas. In addition, there are specialized
live in the western regions [Gong, 2004]. Using the USS 1
hospitals, disease control centres, and maternal and child
per day standard, it is estimated that 12.5% of the rural
health institutions. Significant improvement has been
population, i.e. about 162 million people, live in absolute
achieved in health care quality, access to health
poverty [World Bank, 2003]. How to decrease the dispar
resources, and number of qualified health workers.
ities has become one of the prime concerns for the gov
However, the social and economic transition experienced
ernment
since the late 1970s also brought changes to the health
sector, including marketization and privatization of part
The health status of China's population has greatly
it, and concerns have been raised that the system is no
improved over the past five decades, especially between
longer as effective as it used to be The government
the early 1950s and the mid 1980s, starting from a low
might, therefore, need to rethink and adjust its strategies
baseline and with an emphasis on provision of primary
for health sector development The main concerns raised
health care. Life expectancy reached 71.8 years in 2001.
by research are:
From 1990 to 2000. infant mortality decreased from 65
• Financing. Collection and allocation of resources for
to 31 per thousand live births, and maternal mortality
health care services are inequitable In 2003, 79% of
decreased by nearly 50 per cent [Yuan, 2004] However,
the rural population and 45% of the urban population
the rate of improvement in some health status indicators
was not covered by any health insurance [Ministry of
has reached a plateau. For example, the under-five mor
Health. 2004b]. The uninsured are charged the same
tality rate declined rapidly,from 202 to 51.1 per thousand
fees for a given health problem regardless of econom
between 1960 and 19851 Since then, the rate of decrease
ic status. There is no price differential according to
has slowed and the mortality rate of under-fives
income in the premiums collected by rural health
decreased from 51.1 to 35 per thousand in 1985-2002
insurance schemes. Unemployed workers in urban
1 www.yaolan.com/shiqi/Toddler/app/toddler_article.asptarticle-1009.
HEALTH POLICY AND SYSTEMS RESEARCH IN CHINA • TDR/GEN/SF.8/041
all living standards of the population have generally
areas face financial difficulties in paying for health
care even though almost all of them are covered by the
urban health insurance scheme. Very few people who
migrate from rural to urban areas are covered by
health insurance, as migrants are not included in the
current urban social health insurance policies.
• Efficiency. The majority of health resources are allocat
ed to urban services and tertiary hospitals. Public
funding is not sufficient to ensure provision of basic
primary health care in rural areas. Drugs and high
technologies consume a large proportion of health
2
resources, while unnecessary provision of services and
HEALTH POLICY AND SYSTEMS RESEARCH IN CHINA - TDR/GEN/5EB/O4.1
irrational prescription of drugs result in wastage of
resources
• Regulation. The health regulations lack coordination
between line sectors, e.g. the departments of health,
public security, drug administration, and finance
Enforcement is not well undertaken due to insuffi
cient financial resources and shortage of capable reg
ulators, especially in rural areas.
• Equity. Inequities in health status and access to health
care between geographical areas and social groups are
growing [Gao et al., 2002, Zhan et al, 2004] Disparities
of health status are evident between regions and pop
ulation groups.
• Quality. The quality of health care has improved, espe
ology of disease, lifestyle and health of the Chinese
people.
• Population migration. Population movement from
rural-agrarian to urban-industry/service environments
has increased rapidly and may even increase faster in
thecomingyears.constitutingan unprecedented pop
cially in cities and large hospitals. However, in rural
ulation move. How to address health care provision
areas, quality lags behind, as measured in terms of
under such conditions will be a massive challenge.
qualification of health workers and services provided
• Cost. During the past two decades, medical costs have
• Demographic and epidemiological transition. The suc
cess of the 'one child’ policy, combined with better
escalated by far in excess of income and inflation.
health and living conditions, will compress the demo
Utilization of high technologies and expensive drugs,
graphic transition and lead to a population with a high
and the low occupancy rate of hospital beds are some
proportion of elderly people in China within one gen
of the critical factors contributing to this cost escala
eration, as compared to two or three generations in
tion.
Europe. While population ageing appeared in devel
oped countries when per capita GDP reached US$ 10
China faces a number of major challenges. How these
000. in China, ageing of the population began when
challenges are addressed will be critical forfuture gener
per capita GDP was less than US$ rooo [Gong, 2004J.
ations. They include:
This poses significant challenges as the health system
• Increased globalization. China is moving towards the
centre of the world with all that this entails in terms of
ideological and economic change, as well as of impact
of global production and trade processes on epidemi
has to deal with the high prevalence of both commu
nicable and noncommunicable diseases using limited
resources.
2, Policy context and challenges
2.1 l he five balances
in the Five Balances Policy statement, which will guide
the formulation and implementation of the nth Five-Year
The economic transition that began in the late 1970s has
led to profound changes in the social and production sec
tors of the country. These changes have directly or indi
rectly influenced health sector development, including
policy formulation and implementation. At the macro
level, these changes include:
• Reduced role of all five levels of government (national,
provincial, prefecture, county [district], township) in eco
nomic and social sectors. In the health sector, this
Plan.
Balance t: Between rural and urban areas. While it is
recognized that the gaps cannot be filled in the short
term, more efforts are proposed, including adopting fis
cal and taxing policies to increase transfer payments and
reduce tax burdens for the rural areas Other measures,
such as adjusting the rural labour structure and urbaniz
ing the rural people, are also considered.
change implied reduced public financing of public hos
Balance 2: Between regions. Strategies to reduce the
pitals and increased funding by user fees.
gap will include the National Strategy in Developing the
• Increased reliance on individual rather than collective
Western Areas, and China's Guideline to Reduce Poverty
arrangements for social services. In the health sector
in Rural Areas. The fiscal transfer payment system will be
this has affected preventive as well as curative health
further developed and investment encouraged to gradu
care Further, disestablishment of the collective econo
ally reduce the gap in social and economic development
my in rural areas led to a collapse of the rural
between the eastern and western parts of the country
Cooperative Medical System.
Balances: Between economic and social sectors.
• Application of market mechanisms andforces to a wide
Measures proposed include: expanding the social insur
range of services and exchanges in the society This has
ance system to protect vulnerable groups, increasing the
led, in the health sector, to focusing on revenue gener
inputs in the public health care system, and adjusting
ation by both institutions and professionals, at times
the income distribution system towards greater equi
at the expense of public health interests.
tability.
• Privatization ofpart of the public or collective sectors. In
the health sector this has included converting village
level clinics from collective to private ownership, and.
in some areas, converting township/county and refer
ral hospitals from government to private ownership.
This has led to fragmentation and relegation of public
Balance 4: Between economic development and
the natural environment. This balance includes two
points: saving natural resources for production, and pro
tecting the environment Regulation enforcement
will be strengthened to control environmental pollu
tion.
health services.
Balance 5: Between domestic and international markets.
China has made significant progress in improving the
Growth of the economy through development of the
general standard of living as a result of economic growth
domestic market will be given more attention.
over the past 25 years. However, economic growth is not
Implementation of the Five Balances Policy will substan
a panacea to all problems in society. On the contrary, this
tially impact all aspects of the social and economic sec
growth has created problems of its own, including.
tors. The new development paradigm, as expressed
increasing the gaps in development between regions,
through the Five Balances Policy, emphasizes improve
resources and environmental problems, and increasing
ment in quality of life rather than mere economic
social conflict. All of this requires new thinking and new
growth. This is directly related to development of the
strategies. With this background, the government of
health sector Social services units, including the health
China has embarked on a new paradigm for develop
sector, are facing new opportunities and challenges to
ment, putting the people first, and aiming for coordinat
meet the requirements of the Five Balances development
ed and sustainable development. The goal is a balance
goal, especially in reducing the gaps between rural and
between economic and social development as reflected
urban areas and between regions.
2.2 Health policy-research dialogue
Adaptation of the health system to a market economy
llLLZUL
has involved a number of difficult policy decisions, while
the changing economic and health profile has made
many more policy options available. During the period of
jri
1
planned economy in China, policies and decisions were
usually made without sufficient empirical evidence. This
was mainly the result of three factors. First, policy-mak
ing was dominated by political processes and policy
critique of official policy was not welcome. Third, the
HEALTH POLICY AND SYSTEMS RESEARCH IN CHINA - 1DR/GEN/5EB/O4.1
makers were reluctant to use research evidence. Second,
4
cy and action were lacking.
skills for conducting research and translating it into poli
The context for policy-making has significantly changed
over the past years with increasing awareness among
senior officials of the importance of evidence-based pol
icy-making. This is primarily a result of the greater open
ness in the society, including among the political leader
ship. to constructive dialogue and critique, including
learning from successes and failures. The outbreak of
SARS, further, has played an important role in opening
the eyes of policy-makers to critical reviews of the sector
The ongoing health sector reforms have also called for
more research evidence in proposal and project design
and implementation. For example, evidence has been
sought to improve the effectiveness of the regional
health planning project, the urban health insurance
reform, and the funding policy for public health services.
Under this increased receptiveness by policy-makers, the
challenge is how to organize research systems and
devise mechanisms for translating evidence into policy
improved the capacity of academic institutions to con
duct research. A number of international organizations
including the United Nations Children's Fund (UNICEF),
the World Health Organization (WHO), TDR, the Alliance
for Health Policy and Systems Research (Alliance-HPSR),
the World Bank, the European Union (EU) under its
International Cooperation (INCO) programme, and bilat
eral support programmes including the International
Development Research Centre (IDRC) and the UK
Department For International Development (DFID), have
provided support for health policy and systems research
through funding of research projects, policy seminars,
workshops, publications, and formal and informal discus
and practice.
sions between policy-makers and researchers.
Interaction between research and policy has gradually
increased since the mid-1980s.
Departments of social
medicine and health management have been estab
lished within medical universities, starting health policy
and systems-related training and research on a larger
scale. From the early 1990s, China’s Network of Health
Economics involving ten leading medical universities and
institutions was set up with support from the World
Bank and Ministry of Health. This programme has
expanded health policy and systems research and
3o Research evidence for
fthe 111th five-year plan
This section summarizes the major health policy and sys
regions and between the poor and rich within the same
tems research findings in China from the past decade,
region also widened. This all indicates a rapid growth of
grouped into eight themes; Globalization and macroeco
inequality in the society. Poverty related diseases such as
nomic trends, population and health status trends, eco
TB are more prevalent in poor compared to rich areas
nomic reform and health care financing, organization
[World Bank, 2002).The widened income gaps constitute
and delivery of public health programmes, ownership
barriers for the poor in access to health care [Gao et al.,
and governance reform, cost-contamment, provider per
2002]
implementation One aim is to provide a digest of evi
Over the past two decades, China has experienced dra
dence from research on the particular situation of
matic changes in both social and economic sectors
China's health care system which should be considered
During the economic transition, the public sector share
by policy-makers, in order to better appreciate the oppor
of the total economy almost halved, i.e. decreased from
tunities and challenges of the new development para
60% in 1980 to 33.9% in 2003 [Fulin 2004], and the pri
digm. Another aim is to provide a basis for the identifica
vate economy increased accordingly.
tion of key gaps in knowledge as well as health policy
research capacity in the country, and to propose strate
China has increasingly found a central place in the world
gies to fill such gaps in the coming five-year period and
economy and production processes Labour intensive
beyond
manufacturing and service processes have increasingly
3.1 Globalization and
macroeconomic trends
or have developed as business areas in China in response
China has sustained a high GDP growth and improved
These global production processes include a wide range
living conditions for most people. Between 1980 and
of permutations of wholly owned Chinese companies
been either moved to China from elsewhere in the world
to world market demand
2000, GDP values doubled. According to the national
involved in primary production, joint ventures between
development goal for the next two decades, in 2020 GDP
domestic and foreign companies, contract production,
will be double that of 2000, household incomes will
support and infrastructure, etc.. Common to all is the
increase at the same rate as in the past two decades
need to establish market prices for both inputs and out
[Gong, 2004]
puts, and to operate in a highly competitive environ
The most serious concern in economic development is
of planned economy and has greatly influenced both the
ment. This is contrary to the situation during the period
the disparity between regions and population groups.
labour market and the way the society as a whole func
The Gini coefficient2 of income was 0.22.0.39 and o 45 in
tions.
1980, 1995. and 2002, respectively [Yuan, 2004] The
income ratio of urban residents over rural residents
The tough world market competition requires Chinese
increased from 2.7 in 1995 to 3.1 in 2002 [National Bureau
producers to keep their costs as low as possible, which, in
of Statistics. 2003]. A study indicated that if non-cash
turn can lead to the compromising of environmental and
incomes were included, the income gap ratio between
occupational safety and health standards
urban and rural residents would be 6 [Gong. 2004].
Besides disparities of income between urban and rural
With an almost inexhaustible supply in China of cheap
areas, gaps in income between the western and eastern
labour, and with outdated labour and registration laws.
2 the Gini coefficient, a measure of income inequality, is a number between o and 1. where o means perfect equality
(everyone has the same income) and 1 means perfect inequality (one person has all the income, everyone else has nothing).
HEALTH POLICY AND SYSTEMS RESEARCH IN CHINA - IDR/GEN/SEB/04.1
formance management, and national policies - local
globalization has also meant an influx of labourers from
graphic structure and rapid migration from rural to
rural to urban areas. These labourers accept very low
urban areas leads to changes in health care needs and
wages and no or limited job security and health care cov
service utilization and. therefore, requires different
erage.
arrangements for health services financing and provi
HEALTH POLICY AND SYSTEMS RESEARCH IN CHINA - TDR/GEN/SEB/O4
1
sion
Globalization has impacted China not only in the eco
The infant mortality rate in wealthier provinces such as
nomic sector, but in all aspects of the society, including
Beijing and Shanghai is now below 9 per 1000 live
ideology, technology, and lifestyle. China today is more
births; in poorer provinces such as Qinghai, Guizhou, and
open, and global thoughts and values have been adapted
Gansu, the infant mortality rate ranges from 30-44 per
through international exchange The lifestyle, especially
rooo live-births [World Bank, 2002] A similar pattern can
smoking, diet and physical activity, is also being influ
be found for maternal mortality, which is more than 5-
enced through increased advertisement, communica
fold higher in poorer than wealthier provinces. There
tion, and development of trade and consumerism: these
were 4 7 million pulmonary TB cases in China in 2000
changes are likely to have an indirect impact on the
The prevalence rate was 254 per 100 000 population in
prevalence of noncommunicable diseases such as cancer,
wealthier provinces and almost twice as high, 1 e 451 per
diabetes and cardiovascular disease.
100 000 population, in poorer provinces [National TB
3.2 Population and health
status trends
tions combined with problems of access to health care
Survey, 2002]. Congested and generally poor living condi
services are likely to lead to high TB prevalence also in
sub-groups, such as migrant workers and their families.
The population growth rate has been successfully con
trolled in China. During the past five years, the net annu
The demographic and lifestyle changes are likely to result
al increase in population was 9.2 million It is predicted
in a substantial increase in noncommunicable diseases
that the net annual increase of population will be 8 4
in the next ten to twenty years. An estimated 350 million
million during 2005 to 2010. and 8 million a year during
Chinese smoke, and it is predicted that about 1.2 million
2010 to 2020 [Wu and Sun, 2003]. This will significantly
will die from smoking related diseases every year*. The
change the population structure over the coming gener
population with hypertension is now more than 100 mil
ation Migration from rural to urban areas has increased
lion, and with diabetes and chronic obstructive pul
over the past 25 years In 2000, there were 121 million
monary disease (COPD) is 20 million [Kong, 2002].
migrants, including 70 million moving from rural to
Cardiovascular and COPD were the first reasons for death
urban areas and 20 million moving between cities
in cities and rural areas respectively [Kong, 2002]. The
[Gong, 2004] In 2003, about 140 million people of rural
case rates of hypertension, diabetes and COPD were 26.2,
origin were working or temporarily residing in cities
5.6, and 7.5 per thousand, respectively, in the third survey
[Gong, 2004]. In 2010. it is expected that about 160 mil
for health services In urban areas, changes in lifestyle,
lion population will move from rural to urban areasS
including in diet and in physical inactivity, have rapidly
In addition to poorer health, the migrants also have seri
such as diabetes and hypertension. Unintentional
resulted in increasing prevalence of chronic diseases
ous problems with access to health services, leading to.
injuries have become the first reason of death among
for example, worse outcome of pregnancy in terms of
children in China. Traffic accidents and drowning are the
premature births and deaths compared to non-migrant
leading causes of death among children in cities and
women [Zhan, Sun and Blas, 2002). Changes in demo
rural areas respectively [Jiang and Ding, 2000]. Health
3 the challenges for the implementation of child development protocol and woman development protocol in China, 2004
http://www.cinfo.org.cn/lgxg/zynr/o14 htm[
4 www.tobaccocontrol.com.cn/view.asp/id3i43
For public, collective and private village health clinics,
user charges, especially drug mark-ups, were the domi
nant sources of financing. In township and county health
institutions, only a proportion of staff salaries could be
covered by the government budget so the remainder was
generated from user charges This form of financing has
moved attention away from preventive, promotive, and
other population based health interventions towards
individual clinical care, which can be charged to the
patient. The result has been a negative impact on the TB
and schistosomiasis control programmes [Zhan et al.,
2004; Bian et al., 2004].
from 2000 indicates that about 50% of the operating
costs of disease control institutions were covered by user
charges [The United Nations Task Force on Health, 2000].
A study which included detailed analyses of income at
ten schistosomiasis control stations in Hunan Province.
education towards changing the lifestyle, and cross-sec
toral coordination between the departments of health
and transportation, need to be given more attention.
3.3 Economic reform and health
care financing
found that user-fees constituted, on average. 62% of
total income, ranging from about 30% to about 85%
[Bian et al., 2004].
Allocative efficiency
Health resources are often inappropriately spent on
high-technology equipment and drugs with low utiliza
Sources of funding
tion and cost-effectiveness [Liu and Wei, 1996]. Public
The reduced role of the state has led to increased respon
funding has not been appropriately allocated either to or
sibility of individual health institutions and of other sec
within public health programmes One case in point is
tors. Public hospitals are financed through three sources;
the schistosomiasis control programme, where it was
government subsidies, user fees, and drug mark-ups
found that public funding had been diverted into dis
Government subsides mainly come from local govern
count prices for individual care of questionable cost
ments. Provincial, county, and township governments are
effectiveness in order to generate revenue for the control
responsible for their own hospitals. The balance between
station [Bian et al., 2004].
the three sources of income has changed significantly
over the past 25 years. In 1980, government subsidies and
income from user fees and drug sales constituted.
respectively, 21 4%, 18.9% and 377% of total income. By
2000, government subsidies had fallen to 87%, while
The proportion of total health expenditure in rural areas
covered by government sources has also decreased. In
1993. government funding accounted for 34.9% of total
health expenditures; this had decreased to 24.9% in 1998
[Wang, Meng, and Bian, 2001].
income from user fee and drug sales had increased to
40.2% and 47.1% respectively [Ministry of Health, 1980
The allocation of public funds for rural health is not com
and 2000]
mensurate with the health care needs and size of the
HEALTH POLICY AND SYSTEMS RESEARCH IN CHINA ■ TOR/GEN/SEB/041
It is a concern that, from the mid 1980s, user fees were
also introduced in public health programmes. A report
rural population. In 1998, only 39% of the total govern
bursement of the insured for only major medical costs
ment health budget was allocated to rural areas where
does not guarantee freedom from economic hardship for
70% of the total population resided [Zhao, Wan and Gao,
less costly events. This might affect the willingness to
.
2003]
Because of disestablishment of the collective
subscribe Second, local government in poor areas may
economy, rural health sector development relies much
not be able to provide matching funds, which would neg
less on collective resources and, as a result, drug sales are
atively affect the scheme's sustainability. Third, qualified
the main source of income, accounting for 90% and 66%
personnel to manage the insurance fund are lacking in
in village clinics and township health centres respective
many places Lastly, the catastrophic payments that are
ly [Wei, 1999].
being averted by the scheme are not easy to define as
they are often relative to the specific situation of a cov
Finally, the distribution of resources between preventive
ered individual.
and curative care is not appropriate Health expenditures
HEALTH POLICY AND SYSTEMS RESEARCH IN CHINA ■ TDR/GEN/SEB/04.1
8
on curative care accounted for 8r .8% of total government
Health insurance in urban areas has, in turn, two modal
health expenditure, while expenditures for public health
ities. By the end of 2003. about 54% of urban residents
programmes accounted for only 10.9% of total expendi
were covered by health insurance, including 27% by the
ture [Zhao. Wan and Gao, 2003]. The remaining 7.3% rep
resents expenses for rehabilitative care, ancillary services
to health care, health administration, and capital invest
ment. which account for 06%, 2.0%. 1.6%, and 3.2%
respectively [Ministry of Health. 2003]
Urban Social Health Insurance scheme [Ministry of
Health. 2004b; Ministry of Labor and Social Security,
2003]. The rest of the population, including economic
dependents of the insured, paid out of pocket for their
medical care. However, the expansion of insurance cover
age and increased ability of insurers to reimburse were
Insurance
Insurance to protect against potentially catastrophic
found to increase health care utilization by the insured
when experiencing health problems [Liu et al., 2002]
payments for health care has been evolving in China fol
The urban health insurance system faces a number of
lowing different schemes for rural and urban areas.
challenges. First, how supplementary insurance can be
Economic reform in rural areas from the late 1970s sub
set up for pooling the catastrophic risks is still a concern.
stantially changed the financial context for the health
In most cities, only a small portion of the population is
sector owing to collapse of the Rural Cooperative Medical
covered by supplementary health insurance; the majori
System (CMS), mainly due to the disestablishment of the
ty who are so covered are government employees [Chen
collective economy
Reorganization of the CMS is the main strategy to
improve the rural health care financing system and cov
ered about io% of the total rural population by the end
of 2003 [Ministry of Health, 2004b]. For the poorer
provinces, a centra! government subsidy of io Yuan per
capita per year, matched by the provincial and county
governments, is allocated to support revitalization of the
CMS. Each individual covered should then contribute
about io Yuan per year as an individual premium. This
funding is only sufficient to cover major medical costs
that threaten economic well-being. However, in some
areas outpatient services are also covered. A pilot scheme
has covered more than 300 counties in China, but there
are some concerns for its design and implementation
even if there is no hard evidence at present First, reim
et al, 2002]. Second, the expansion of urban health insur
ance to all urban residents is challenging, especially so
for the poor who are not able to pay the insurance premi
um [Cai, 2000; Meng. 2002] Lastly, the efficiency of oper
ating existing insurance schemes should be improved.
particularly to reduce administrative costs. Even though
some success has been achieved, there is a need to fur
ther investigate how to sustain the balance between
insurance income and expenditure through cost contain
ment, among other measures
Equity
While health institutions have gained considerable inde
pendence from political and bureaucratic control, costs
have risen and barriers in access to health care have been
created for vulnerable groups [Bloom, 1998; Bloom and
vent and control diseases through actions such as immu
for the poor have not been effectively implemented,
nization, mass treatment, health education, regulation,
mainly due to the absence of a dedicated public subsidy
etc. In the case of TB and sexually transmitted diseases,
to compensate providers for loss of income resulting
public health programmes encourage individuals to
from providing the exemption [Meng, Sun and Hearst,
come forward for treatment in order to stop the spread
2002].
of disease
The current health financing mechanisms have deep
ened the inequalities in society First, access to health
care is more constrained for the poor than for the rich
and for the uninsured than for the insured.The very large
percentage of patients who require hospitalization but
do not gain access to care due to financial constraints is
as high as 75% in rural areas and 56% in urban areas
[Ministry of Health, 1999] Public health programmes,
such as TB detection and observed treatment (DOTS),
have not been effectively delivered to the communities
in poor areas due to financial constraints [Meng et al,
2004a]
Coverage
by
Expanded
Programme
on
Immunization (EPI) activities was different between
poorer and richer areas by 10 to 25 per cent, especially for
hepatitis B immunization [Sun and Meng, 2004]. In cer
tain urban areas, only 40% of migrant women received
pre-marital medical examination, 48% antenatal exami
nation, and 13% postnatal examination, which was 20-
40% lower than for permanent residents [Han, Shi and
Liu, 2001] Such differences have been shown to lead to
worse outcome of pregnancy [Zhan.Sun and Blas, 2002].
Second, payment for health care is not equitable
[Ministry of Health, 1999]. It was found that poorer
households spent 8% of household income on health
care compared to 5% for higher income households [Han,
Shi and Liu. 2001]. Inequity has also been found in disease
control programmes such as schistosomiasis control,
where it was found that payment is extracted from
The 'three-tier' health care delivery system in both urban
and rural areas forms the basic structure of health care
organization in China. In rural areas, village clinics and
township health centres provide primary health care, and
county hospitals provide specialty medical services. In
urban areas, community health units and district hospi
tals provide primary health care services. Municipal and
provincial hospitals provide tertiary medical services to
both urban and rural people
Over the past five decades, the size of the health care
delivery system has continued to expand in terms of
number of health institutions and workforce. By the end
of 2003, there were close to 806 000 health institutions,
including 515 000 village clinics, 17 800 general hospitals,
44 300 township health centres, 3600 centres for disease
control (CDCs, which provide public health programmes
addressing infectious diseases, health education, food
security, environmental health, etc.), 3000 maternal and
child care institutions, and 1700 disease specific treat
ment institutions. There were o 87 million village health
workers and 4.3 million health workers in township and
higher level health institutions [Ministry of Health,
2004a]. Expansion of the health care delivery system has
not been even in distribution; qualified health workers
and advanced equipment are concentrated in urban
areas and at tertiary hospitals [Liu and Wei, 1996].
patients to the limit of their ability to pay, something
which is likely to hurt the poor more than the rich [Bian
et al., 2004].
The private health sector has grown, as shown by the
fact that, at village level, about 50% of clinics now oper
ate as private enterprises. In urban areas, the number of
private hospitals has increased rapidly especially in some
3.4 Organization and delivery of
public health programmes
southern provinces. One of the challenges in rural areas,
with the increased number of private clinics, is how pub
lic health programmes can be effectively delivered. It was
Public health programmes are organized to address the
found that neither private nor public village clinics were
health of the whole population or of groups within the
willing to provide preventive care without reimburse
population. They operate at the population level to pre
ment. This was mainly because the operation of public
HEALTH POLICY AND SYSTEMS RESEARCH IN CHINA - TDR/GFN/SfB/04.1
Tang, 2004] Well intended fee exemption programmes
ing basis for all health providers regardless of the cost
turer's exit price was based on production costs plus a 5%
structure of the individual health institution [Meng et
profit margin, to which a 15% mark-up was added for the
al.. 2002].
wholesale price A further 15% margin constituted the
A high prevalence of unnecessary drug use has been
and retailers including hospitals were fixed, expensive
found to be one of the reasons for the escalation of phar
drugs were preferred. In order to attract wholesalers and
maceutical expenditures in China. Unnecessary prescrip
hospitals to their products, manufacturers would set
retail price Since profit margins for both wholesalers
HEALTH POLICY AND SYSTEMS RESEARCH IN CHINA - TDR/GEN/5EB/O4.1
12
tion of drugs is caused by both the health provider and
higher-than-cost prices Under this system, drug prices
the user For the provider, drug prescription generates
were recognized by government to be unreasonably
revenue; for the user, drugs are the most visible treat
high, which led. in 2000. to a change in the government’s
ment for their health problem and are therefore in
drug pricing strategy from controlling the entire cascade
demand [Xiang, 2002]. Revenue generated from the use
of prices for all pharmaceuticals to controlling the retail
of high technology was another important source of
price of selected products only However, drug expendi
hospital financing. A study in 33 hospitals between 1994
tures for all patients still increased rapidly after imple
and 1997 showed that investment in high technologies
mentation of the new pricing strategy [Cheng, 2004].
such as magnetic resonance imaging (MRI) and comput
After the price of drugs was reduced by the central and
erized tomography (CT) scanners has resulted in a mas
provincial governments, the hospitals studied tended
sive waste of resources [Ci, 1997], For exam pie, the utiliza
to prescribe more drugs for patients to maintain their
tion of positron emission tomography (PET) was shown
level of income. This meant that quantity more than
to be as low as 30% to 60% of the potential workload. To
price became the determinant for drug expenditure.
compensate for this underutilization, prices charged to
Improvement in rational use of drugs and correcting the
the user were set at exorbitant levels; targeted clients
present perverse incentive structure for hospitals will be
were mainly the insured and rich [Bian et al, 2002].
important challenges for containment of drug expendi
tures [Cheng, 2004]. A study in Shanghai suggested that
Some studies assessing the urban health insurance
the use of a drug list and capping the annual growth rate
reform have shown there has been a positive impact on
of hospital incomes might be effective in controlling the
cost containment and access to health care.These stud
rapid increases in drug expenditures [Hu et al., 2001]
ies found that replacing fees for services by contractual
However, there is no conclusive evidence for the effec
relationships between the insurer and the health
tiveness of this strategy in other areas.
provider led to control of hospitals' use of resources
[Meng et al.. 2004b, Yip and Eggleston, 2001). However,
the studies did not provide evidence about the effect of
3.7 Provider performance
management
the new payment methods on quality and equity.
In order to stimulate health workers to increase their
Pharmaceutical expenditure in China was US$ 28 billion
productivity, a bonus system was introduced in the hos
in 2001, and accounted for 44.4% of total health expen
pital sector in the mid-1980s based on a flat rate Later,
ditures [Zhao, Wan & Gao, 2003]. This figure is 15% to
bonuses were introduced elsewhere in the health sector
30% higher than in most developed or middle-income
and increasingly performance based methods were
countries. The hospital sector is the main retail supplier
brought in, including elements such as revenue generat
of drugs, and drugs have been the most profitable fee
ed and quality and volume of service. However, it has
item in hospitals since the early 1980s.
been found that income is the main element encourag
ing health professionals to provide as much service as
Between 1980 and 2000, the government controlled the
possible, including drugs, and thus induces doctors to
entire cascade of drug prices, from the manufacturer’s
over-treat and over-prescribe [Xu et al, 2001]. Several
exit price, to the wholesale and retail price. The manufac
studies have shown that, in public health programmes,
health providers under-provide less profitable services,
On the other hand, health is a sector that is closely relat
over-prescnbe drugs, and over-provide more profitable
ed to many other departments, e g. the departments of
services. One study, for example, showed that TB health
planning and reform, finance, labour and social security,
care providers did not meet the minimum requirements
civil affairs, administration of food and drugs, and so
for visits to TB patients’ homes because such care did not
when a health policy is made at a particular level, all the
provide financial returns for the staff [Meng et al,
departments concerned should be involved.
2004a). Another study on TB care showed that, in addi
prehensive analysis of needs and within the overall
health providers reduced preventive interventions in
development framework Central policies can then be
order to save costs and increased emphasis on profitable
implemented at the local level with consideration of the
clinical care activities [Bian et al., 2004].
specific situation. However, this approach also has poten
tial problems, e.g. leakage of authority, risk of low compli
An internal contracting system was introduced in the
ance in implementation.
hospital sector from the early 1990s, following recom
mendations by the health authorities, in an attempt to
There are no incentives for local policy-makers to active
improve both departmental and individual staff per
ly develop polices that may be more suitable for their
formance including quality of care. This contract system
own situations. In addition, local financing limitations
is an internally administrated mechanism within each
might inhibit the implementation of centralized policies
hospital division and usually has four components: vol
which require local government funding. Only a few
ume of work, quality of service, revenue generated, and
studies have addressed this area of policy research.
patient satisfaction. No systematic assessment has been
undertaken to date of the impact of this approach on
One study found that, for TB control programmes, overall
performance. However, in a study in Shandong and
performance was better in wealthier areas than that in
Henan provinces, it was found that clinical departments
poorer areas, partly because the poorer counties were
were concentrating on revenue generation because
not able to match the funding provided by the World
income had become the most important indicator in
Bank loan project [Meng et al., 2004a] Another study
assessments by hospital managers [Xu et al.. 2001].
showed significant delays in implementing policies man
dated from higher levels. For example, in 1996 the central
3.8 National policies - local
implementation strategies
The health policy-making process in China is complex.
government asked for price adjustments to health care
services. However, up to 2001, this policy had not been
implemented for various reasons [Meng et al.. 2002].
Other studies found that the local governments did not
This is due partly to the five levels of government admin
implement central government policies for disease con
istration and to the transition towards more autonomy
trol. Guidelines issued by the Ministry of Health on TB
in health care financing and regulation for provinces and
prevention and control, including use of the DOTS strate
counties. Decentralization has given local governments
gy and provision of free or subsidized services, were not
greater power in making decisions on the management
implemented; instead some inappropriate interventions
of local public affairs. This means that local government
were included in the local policy [Zhan et al., 2004].
can make policy for local affairs and adapt the policies
from higher level government in light of local circum
stances. From this point of view, the governments at all
levels are both policy-makers and policy-implementers
13
1
make policies for the country as a whole based on a com
.
2004]
In schistosomiasis control programmes, the
1DR/GEN/SLB/O4
implementation is that the central government can
tion to case detection and contact follow-up [Zhan et al.,
■
The advantage of this approach to policy-making and
HEALTH POLICY AND SYSTEMS RESEARCH IN CHINA
tion. the providers extended treatment, provided unnec
essary tests and drugs to patients, and paid less atten
ing basis for all health providers regardless of the cost
turer's exit price was based on production costs plus a 5%
structure of the individual health institution [Meng et
profit margin, to which a 15% mark up was added for the
al., 2002].
wholesale price. A further 15% margin constituted the
A high prevalence of unnecessary drug use has been
and retailers including hospitals were fixed, expensive
found to be one of the reasons for the escalation of phar
drugs were preferred In order to attract wholesalers and
maceutical expenditures in China. Unnecessary prescrip
hospitals to their products, manufacturers would set
retail price. Since profit margins for both wholesalers
HEALTH POLICY AND SYSTEMS RESEARCH IN CHINA - TDR/GEN/SEB/04.1
12
tion of drugs is caused by both the health provider and
higher-than-cost prices. Under this system, drug prices
the user. For the provider, drug prescription generates
were recognized by government to be unreasonably
revenue; for the user, drugs are the most visible treat
high, which led. in 2000, to a change in the government's
ment for their health problem and are therefore in
drug pricing strategy from controlling the entire cascade
demand [Xiang, 2002]. Revenue generated from the use
of prices for all pharmaceuticals to controlling the retail
of high technology was another important source of
price of selected products only. However, drug expendi
hospital financing. A study in 33 hospitals between 1994
tures for all patients still increased rapidly after imple
and 1997 showed that investment in high technologies
mentation of the new pricing strategy [Cheng, 2004].
such as magnetic resonance imaging (MRI) and comput
After the price of drugs was reduced by the central and
erized tomography (CT) scanners has resulted in a mas
provincial governments, the hospitals studied tended
sive waste of resources [Ci. 1997J. For example, the utiliza
to prescribe more drugs for patients to maintain their
tion of positron emission tomography (PET) was shown
level of income. This meant that quantity more than
to be as low as 30% to 60% of the potential workload. To
price became the determinant for drug expenditure.
compensate for this underutilization, prices charged to
Improvement in rational use of drugs and correcting the
the user were set at exorbitant levels, targeted clients
present perverse incentive structure for hospitals will be
were mainly the insured and rich [Bian et al. 2002].
important challenges for containment of drug expendi
tures [Cheng, 2004]. A study in Shanghai suggested that
Some studies assessing the urban health insurance
the use of a drug list and capping the annual growth rate
reform have shown there has been a positive impact on
of hospital incomes might be effective in controlling the
cost containment and access to health care. These stud
rapid increases in drug expenditures [Hu et al., 2001)
ies found that replacing fees for services by contractual
However, there is no conclusive evidence for the effec
relationships between the insurer and the health
tiveness of this strategy in other areas.
provider led to control of hospitals' use of resources
[Meng et al., 2004b; Yip and Eggleston, 2001]. However,
the studies did not provide evidence about the effect of
the new payment methods on quality and equity.
3.7 Provider performance
management
In order to stimulate health workers to increase their
Pharmaceutical expenditure in China was US$ 28 billion
productivity, a bonus system was introduced in the hos
in 2001, and accounted for 44.4% of total health expen
pital sector in the mid-1980s based on a flat rate. Later,
ditures [Zhao, Wan & Gao. 2003]. This figure is 15% to
bonuses were introduced elsewhere in the health sector
30% higher than in most developed or middle-income
and increasingly performance based methods were
countries. The hospital sector is the main retail supplier
brought in, including elements such as revenue generat
of drugs, and drugs have been the most profitable fee
ed and quality and volume of service However, it has
item in hospitals since the early 1980s.
been found that income is the main element encourag
ing health professionals to provide as much service as
Between 1980 and 2000, the government controlled the
possible, including drugs, and thus induces doctors to
entire cascade of drug prices, from the manufacturer's
over-treat and over-prescribe [Xu et al, 2001]. Several
exit price, to the wholesale and retail price.The manufac
studies have shown that, in public health programmes,
health providers under-provide less profitable services,
On the other hand, health is a sector that is closely relat
over-prescribe drugs, and over-provide more profitable
ed to many other departments, e.g. the departments of
services. One study, for example, showed that TB health
planning and reform, finance, labour and social security,
care providers did not meet the minimum requirements
civil affairs, administration of food and drugs, and so
for visits to TB patients'homes because such care did not
when a health policy is made at a particular level, all the
provide financial returns for the staff [Meng et al,
departments concerned should be involved.
implementation is that the central government can
tion to case detection and contact follow-up [Zhan et al.,
make policies for the country as a whole based on a com
2004] In schistosomiasis control programmes, the
prehensive analysis of needs and within the overall
health providers reduced preventive interventions in
development framework. Central policies can then be
order to save costs and increased emphasis on profitable
implemented at the local level with consideration of the
clinical care activities [Bian et al., 2004].
specific situation. However, this approach also has poten
tial problems, e.g leakage of authority, risk of low compli
An internal contracting system was introduced in the
ance in implementation.
hospital sector from the early 1990s. following recom
mendations by the health authorities, in an attempt to
There are no incentives for local policy-makers to active
improve both departmental and individual staff per
ly develop polices that may be more suitable for their
formance including quality of care. This contract system
own situations In addition, local financing limitations
is an internally administrated mechanism within each
might inhibit the implementation of centralized policies
hospital division and usually has four components: vol
which require local government funding Only a few
ume of work, quality of service, revenue generated, and
studies have addressed this area of policy research.
patient satisfaction. No systematic assessment has been
undertaken to date of the impact of this approach on
One study found that, for TB control programmes, overall
performance. However, in a study in Shandong and
performance was better in wealthier areas than that in
Henan provinces, it was found that clinical departments
poorer areas, partly because the poorer counties were
were concentrating on revenue generation because
not able to match the funding provided by the World
income had become the most important indicator in
Bank loan project [Meng et al., 2004a]. Another study
assessments by hospital managers [Xu et al., 2001].
showed significant delays in implementing policies man
dated from higher levels. For example, in 1996 the central
3.8 National policies - local
implementation strategies
government asked for price adjustments to health care
services. However, up to 2001, this policy had not been
implemented for various reasons [Meng et al., 2002].
The health policy-making process in China is complex.
Other studies found that the local governments did not
This is due partly to the five levels of government admin
implement central government policies for disease con
istration and to the transition towards more autonomy
trol. Guidelines issued by the Ministry of Health on TB
in health care financing and regulation for provinces and
prevention and control, including use of the DOTS strate
counties. Decentralization has given local governments
gy and provision of free or subsidized services, were not
greater power in making decisions on the management
implemented; instead some inappropriate interventions
of local public affairs. This means that local government
were included in the local policy [Zhan et al., 2004].
can make policy for local affairs and adapt the policies
from higher level government in light of local circum
stances. From this point of view, the governments at all
levels are both policy-makers and policy-implementers.
HEALTH POLICY AND SYSTEMS RESEARCH IN CHINA - 1DR/GLN/SEB/O4
The advantage of this approach to policy-making and
essary tests and drugs to patients, and paid less atten
1
2004a] Another study on TB care showed that, in addi
tion, the providers extended treatment, provided unnec
HEALTH POLICY AND SYSTEMS RESEARCH IN CHINA ■ TDR/GEN/SEB/04.1
4= Research needs and systems
China has made significant leaps forward in health poli
cy and systems research, and in knowledge generation
4.1 Current research needs
to close gaps in knowledge
and dissemination in the past two decades. Although
Balance 1: Between rural and urban areas. Addressing
research projects conducted over the past ten years, the
this balance includes transfer of payment between
number is probably in three digits. The projects were sup
urban and rural areas, changes in the labour market
ported by the Chinese government (all levels) as well as
structure, and increased urbanization Addressing the
international agencies such as the WHO, World Bank, EU,
rural-urban divide, and the integration of health systems
TDR, and Alliance-HPSR. Some NGOs such as the Ford
between cities and industrializing peri-urban areas, are
Foundation, and bilateral development agencies such as
some of the major challenges for the coming years and
DFID, have also provided funds. As well, technical assis
will affect very large parts of the population Research
tance for the projects was received from international
needs are.
academic
institutions
such
as
the
Institute
of
Development Studies at the University of Sussex (UK),
• The contributions made by health investment to eco
nomic development and rural-urban disparities.
Harvard School of Public Health (USA), and other sources.
• Challenges and strategies in the regulation and man
Some of the findings have already been translated into
agement of the health care market in both rural and
health policy by the central and provincial governments.
urban settings during the continuing transition from
Two examples are worth citing:
• Recommendations for promoting the health security
planned to market economy in China.
• The functioning of the health care system in a society
system, reallocation of health resources in urban and
which is in a large-scale and long-lasting transition.
rural areas, partnership between the public and pri
• Strategy and policy on systems of medical assistance
vate sectors in health care service delivery, as well as
and social health insurance for floating populations.
re-regulation and deregulation of the health care serv
• Access to health care services by the poor, including
ice market, were integrated into The Decision on
Health Reform and Development enacted by the
equity and outcome issues.
• Evaluation of Basic Medical Insurance for Urban
Central Committee of the Communist Party of China
Employees and the New Cooperative Medical System
and the State Council in 1997.
in rural areas, in terms of access to health care, quality
• The Cooperative Medical System was re-established in
2002, using earmarked funds transferred from the
of health care, responsiveness of hospitals, and cost
containment.
Ministry of Finance and Department of Finance of the
Provincial Government, as well as from the Prefecture
Balance 2: Between regions. Addressing the imbalance
Government.This policy is based on recommendations
between eastern, central and western areas will require
from research on the rural community health financ
ing system conducted by the China Network [Wei,
19971-
encouragement and incentives for economic activities in
some areas. Addressing the regional effects will call for
multidisciplinary and timely case-study type of research
in order to capture the 'unexpected'. Health policy
However, many policies are still formulated on the basis
research could include:
of weak or no evidence and health policy implementa
• The constraints and options for fiscal transfer for
tion is not systematically evaluated. There is a long way
health from Central Government and Eastern areas to
to go before health policy and systems research reaches
Central and Western areas of China.
its full potential. Improved communication and dialogue
• Strengthening of endemic diseases control in Central
between the researchers and the policy-makers will be
and Western China; formulation and application of
critical to achieving this.
specific policies; balance between preventive and cura
tive services.
• Public and private partnership in health care delivery
in central and western areas of China.
15
HEALTH POLICY AND SYSTEMS RESEARCH IN CHINA - TDR/GEN/SEB/04.1
there are no formal statistics about the total number of
disease (lung cancer, liver cancer, etc.) prevalence.
• Impact of the increased economic activity on the envi
ronment and health status.
• Preventive policy and regulations on pollution transfer
from the developed world to China in the environment
• The labour market, health status and access issues
of globalization
Balance 3: Between economic and social sectors
• Quality-adjusted life years and economic losses effect
Addressing this balance will involve both an increase in
and redistribution of resources between sectors and
within the health sector. Policy and systems research can
ed by ecological degradation in China.
•
Implementation and impact of health-related inter
ventions to address environmental issues.
contribute to both policy formulation and evaluation of
policies. An increasing resource base for health provides
Balance 5: Between domestic and international mar
an opportunity to do more, but also poses a challenge to
kets. Development of the domestic market is likely to
do the right thing in order not to waste the society's
accelerate globalization in terms of increased marketing
resources Research could include:
of manufactured consumer goods, some of which may
•
Empirical studies on the relationship between social
be harmful to public and individual health Market forces
development - including education, R&D, and poverty
will, by nature, drive activities to where the greatest prof
alleviation programmes - and health status in China
• Theefficiencyofallocation of resources, cost-effective
ness. and returns on investments in health.
• The impact of reforms to local tax systems on health
finance.
•
The interrelationship between health development
strategies and measures to reform local government
to make it more accountable to the community
•
Measures to enable people to become better
informed users of health services, and to improve the
capacity of local representative bodies to monitor and
influence health system performance
• National health accounts
• The disparities between health status and social fac
tors such as gender, occupation, social group, and
income group.
its are found, hence will often be on a collision course
with public health and require strong evidence to sup
port the public and political debates This can only come
from critical and independent research Specific studies
could be on• Survey of occupational injury and diseases, and the
impact of China's access to the World Trade Organi
zation (WTO) on socioeconomic development.
• The challenges to and policy on tobacco control after
China deregulated the retail price, the wholesale
entrance policy, the manufacture and the import of
tobacco, according to its WTO commitments
• The alert and response system to infectious diseases
emerging across borders.
• Regulation of food safety.
• Regulation of the health care market, i.e the private,
semi-private and public markets.
Balance 4: Between economic development and
the natural environment. Continued rapid growth,
• The effect of different models of ownership and gover
nance on the health sector.
including one that has social objectives and involves
attempts to geographically regulate the growth, will
potentially have an adverse impact on the environment
and will directly and indirectly impact the health of the
population. Addressing the relationship between eco
4.2 Likely future research needs
to close gaps in knowledge
Experience from the past decade has shown that prob
nomic development and nature, with its links to health, is
lem-oriented health policy and systems research has an
a challenge that requires critical independent policy and
important role to play in improving the process of health
systems research. Specific studies that could be under
policy-making and implementation. Extensive dialogue
taken include;
and close collaboration among researchers, policy-mak
• Development and application of policies for protect
ing the environment and health.
• Empirical studies on environmental degradation and
ers and medical workers have played, and will continue
to play, a critical role in the development of the health
sector in China
Development of the socioeconomic environment, includ
nate activity in this area. However, there is a need to
ing the health sector, which by all measures has been
improve shared priority-setting. The Ministry of Health
extremely rapid, will continue for a long time, probably
has not set up the health policy development agenda
for more than one generation. Health policy and systems
agreed by relevant departments in the central govern
lenges of the nth Five-year Plan. In addition, health poli
ment and the research community.
• The lack of a bridging mechanism between the policy
makers and health policy and systems researchers
cy and systems research is needed to prepare for the 12th
In spite of the China Network on Health Economics,
Five-year Plan and beyond. Long-term health policy and
policy-makers lack sufficient access to the results of
systems research is needed on:
policy and systems studies as well as to the skills need
• Transformation of the health financing system to one
ed to assess and use these results for policy-making
which is equitable and sustainable
The policy researchers, on the other hand, are often
• The re-orientation and development of the public
unaware of the needs of health policy-makers, and lack
health system in the next 10-20 years based on situa
the skills and channels to communicate their results
tion analyses and projections of future health prob
lems
• The opening and regulation of the health care market:
effectively.
• The lack of incentives for researchers to participate in
practical policy and systems studies
pricing system reform, tax waver policy to private
At present, researchers are hesitant to conduct practi
investors in the health sector, and enforcement of reg
cal research because of the lack of financial support.
ulation in the health care market
including
from
local
health
authorities;
the
• Transformation of the health care delivery system in
researcher’s top priority is promotion in his/her aca
accordance with regional health planning to promote
demic position rather than practical research findings.
efficient allocation of health resources.
Greater research commissioning is required to attract
• The massive population movement from rural to
urban areas.
the most talented researchers to the field.
• Weak capacity in policy and systems research
Researchers have insufficient training on policy and
The above are broad areas of research which need to be
systems related subjects, and most policy researchers
further developed and defined
have little experience on which to integrate theory
into practice. Most policy and systems research
4.3 Gaps in research capacity
There are important gaps in research capacity in China,
including in priority-setting and skills for translating
research findings into health policy and practice. It is nec
requires
a
multidisciplinary
team,
but
many
researchers have little experience in managing and
participating in such teams.
• Customary lack of critical independence
For historical reasons, many researchers abstain from
essary for China's government to demand research to
making conclusions that critique existing policies.
meet their policy needs, and for the research community
Policy-makers, on the other hand, are slowly beginning
to push health policy and systems research forwards to
to realize the value of critical independent policy
meet the future challenges. The gaps between needed
health policy and systems research and current research
performance include
research.
• The unfeasibility of policy recommendations
Researchers tend to underestimate the obstacles to
•The lack of a health policy and systems research agenda
policy implementation in the real world, and often get
agreed by policy-makers and the research community
frustrated when their recommendations are not taken
China has made exemplary progress in developing a
up immediately and in the form that they are made.
well functioning network of health systems research
institutions and has national institutions that coordi
17
HEALTH POLICY AND SYSTEMS RESEARCH IN CHINA - IDR/GEN/SLB/04.1
research, therefore, will need to operate with a short
term horizon, addressing the immediate needs and chal
• The lack offunding opportunities for health policy and
able through close dialogue between researchers and
systems research projects
policy-makers at national and provincial level. Many
In China, only a small proportion of research funds are
strategies can be used to promote health policy and sys
used for policy-oriented research, while funds from
tems research in China, including multidisciplinary
international donors directed to policy and systems
research collaboration, research capacity building
research are insufficient to meet the needs. Policy
through training, research activities, and dialogue and
makers have no recurrent earmarked funds to support
communication between policy-makers and researchers.
research. Most funds for health policy and systems
There is also room for organizational development,
research come from foreign sources.
including establishing research and training networks
within provinces and internationally, and for technical
4.4 Options for closing the gaps
HEALTH POLICY AND SYSTEMS RESEARCH IN CHINA - IDR/GEN/SEB/O4.1
18
China has made some progress in closing the gaps
assistance and funding support from the national and
provincial governments as well as from international
donors
between the requirements for conducting health policy
and systems research and the capacity of the research
Improving the research-policy dialogue
institutionsand researchers. For instance,China Network
Much research-policy dialogue has taken place on an ad
has sent 26 trainees to participate in the World Bank
hoc basis, depending on individual funding and project
Flagship Training Program on Health Sector Reform and
opportunities In order to bring researchers and policy
Sustainable Financing since iggy.The China Network has
makers closer together, dialogue needs to be more for
also held 24 training courses on health economics and
malized and could,for e g, include
health policy for trainers and researchers from the 10 key
medical universities in China, and has held another 28
training programmes for officials from the health
authorities at provincial/prefecture government level
Moreover, the China Network has coordinated eight
Senior Policy Seminars in which critical issues in health
policy were discussed and new research findings dissem
inated to officials from relevant departments of central
and provincial government TDR has supported training
programmes on health economics and management,
• National and provincial health policy research fora.
which might e.g. bring policy-makers and researchers
together once a year to discuss new research findings
as well as policy challenges and research needs
• Publication and dissemination of regular policy briefs.
providing digests of research findings in a language
and form relevant to policy-making
• Establishment of a website for mapping research
needs and opportunities, including calls for proposals,
funding, etc.
and case-study research, among other things. DFID has
also provided funds to support dissemination of health
policy research findings, while the Alliance-HPSR has
supported training for Chinese researchers and policy
makers in taking research into policy and practice and
has also funded a number of projects.
The concept of evidence-based development of health
systems has been accepted by officials, and a greater
Improved dialogue will help researchers and policy-mak
ers develop a common understanding of the issues as
well as a common vocabulary, which eventually will facil
itate communication and uptake of recommendations.
Contracting out and commissioning of
existing institutions
number of policy-makers are now aware of the impor
More and more health policy-makers at national level
tance of concrete evidence in terms of the health prob
emphasize research findings in the process of policy-
lems, health interventions, health outcomes, and per
making. However, they frequently complain that they
formance of health financing schemes and health care
cannot find the reliable evidence they need, while offi
delivery systems. So there is increased demand for scien
cials from provincial level have difficulty in finding appli
tific health policy and systems research, which is achiev
cable research results relevant to their local situations. At
the same time, many researchers conduct their research
Creation of new institutions
according to personal interest and funding opportunities
At present, some policy-makers and researchers think it
rather than according to priorities for health policy
necessary to establish a national health policy research
Frequently, the quality of research undertaken is wanting
centre, and that a national institution should coordinate
due to a combination of lack of skills and the fact that
activities such as health policy and systems research pri
many policy and systems researchers work in isolation,
ority-setting, communication between senior policy
i.e. are not exposed to the rigorous peer review process
makers and researchers, and management of resources
which characterizes science in many places
to support research However, others suggest that the
option to increase contracting and commissioning with
because:
whom are listed in the Annex. Suggestions for making
• There are already many national health policy and sys
better use of, and further developing, existing capacity
tems research institutions, such as the China Health
and structures, include:
Economics Institute, the China Hospital Management
• Health authorities and relevant departments at
Institute and, in addition, every province has several
national and provincial levels should develop priorities
universities which could conduct health policy and
in health policy and systems research based on the
systems research What is needed is the challenge,
macro-socioeconomic environment and critical health
funding, and bridging of research to policy.
problems as well as on the evolution of health care
• Re-constructing and re-organizing the existing health
management. Government funds from national and
policy and systems research institutions in China could
provincial levels must be made available for health
policy and systems research
• Contracting out or commissioning of health policy and
lead to more benefits in a shorter period of time.
• The provincial governments will have more immediate
benefit from restructuring existing research capacity
systems research should be based on concrete princi
because this will ensure local relevance and sustain
ples and transparent process. Independent and techni
ability, including providing training opportunities for a
cally competent review committees should be involved
in evaluating proposals and reviewing results.
new generation of local researchers.
• Large institutions with secure funding tend to lose
Competitive selection of researchers and projects is of
innovation and quality over time due to not being con
paramount importance for the process
stantly challenged to improve performance
• There is a need to strengthen exchange and capacity
building programmes for conducting multidisciplinary
health policy research in order for Chinese academic
institutions to support the next generation of
researchers Participating in concrete and externally
Capacity building for policy and systems
researchers and policy-makers
Capacity building includes more than mere provision of
reviewed research projects is the best way to give
training courses. For it to be sustainable, a comprehen
young researchers a feel for, and the skills to conduct,
sive capacity building programme would include e g. the
high quality research.
following elements:
• Provision of opportunities for research dialogue, fund
Use of existing capacities, provided that appropriate
structures for commissioning are in place, makes good
ing. peer review, and international exposure.
• Integration of health policy and systems research into
sense in terms of economy and sustainability. Further,
the curricula for researchers and policy-makers to be.
through a competitive model, researchers are challenged
• Specific skills training, including conduct of multidisci
to continuously improve the quality of their research.
plinary case-study research.
19
TDR/GEN/Sl 8/04 I
existing institutions, as described above, is preferable,
rently involved in policy and systems research, some of
HEALTH POLICY AND SYSTEMS RESEARCH IN CHINA
A large number of individuals and institutions are cur
way forward
To maintain the social values in Chinese society, it will be
critical to develop a fair, efficient and sustainable health
care system during the coming two decades in accor
dance with the new development paradigm. Health pol
icy and system research can provide the evidence to
improve policy-making towards this goal.
Research undertaken in China in the past ten years,
mostly by Chinese researchers, has proved to be a valu
able tool to identify problems in the health system and
to help resolve operational bottlenecks. Building on this
sound basis, research priorities can now be identified and
HEALTH POLICY AND SYSTEMS RESEARCH IN CHINA - TDR/CEN/SEB/04.1
20
resources dedicated to research can be increased
To make new investments more productive, specific
strategies for improving health policy and systems
research and translation should be formulated These
should include capacity building for researchers and pol
icy-makers. exercises for setting research agendas, coor
dinating research at the national and provincial levels,
and disseminating research findings to policy-makers.
More funds and resources should be allocated to support
health policy and systems research programmes With
assistance from international agencies, the China
Ministry of Health should launch research projects tar
geting priorities in the context of the new development
framework. Formal and informal dialogue between
researchers and policy-makers, funding for research, and
uptake of findings should be included in the formulation
of the nth and 12th Five Year plans for health develop
ment.
It is our hope that the review presented this document
will contribute to the debate and facilitate the way
towards improved health, equity and health care delivery
in China and elsewhere in the coming years.
Annex: Directory of health policy
research institutions
Renhua Cai
Zhengzhong Mao
Jin Ma
Director
Professor
Professor
National Health Economics Institute
Health Executive Training Center,
Shanghai Second Medical University,
PO Box 218, Beijing Medical University,
Huaxi Medical University,
No. 227 Chongqinglu RD. 200025
Beijing, PRC 100083
Renmin Nanlu, Chengdu, Sichuan,
Wangpan@proxy.cnhei.edu.cn
PRC 610044
Hxh e@mail.sccninfo.net
Jiwei Zhang
Deputy Director
China Health Economics Magazine,
Ming Wu
41 Xiangshun Jie. Xiangfang District,
Professor
Shanlian Hu
Health Executive Training Center,
Professor
Harbin, Heilongjiang. PRC 150036
Beijing Medical University
Health Executive Training Center,
CHE@public hr.hl cn
Xueyuan Lu, Haidian District,
Shanghai Medical Univ.
Beijing, PRC 100083
138 Yixueyuan Lu, Shanghai, PRC 200032
Yuan Liping
Whong@public.bta.net.cn
Slhu@fudan ac.cn
Senior Project Officer POLICY
Guoxiang Liu
Junfeng Chen
Chma/USAID HIV/AlDs Program
Professor
Associate Professor
I yuan@policych 1 n a. com.c n
Health Executive Training Center,
Health Management Dept..
Hai Wen
Harbin Medical University
Dalian Medical Univ.,465 Zhongshan
199 Dongdazhi Jie, Nangang District,
Lu, Shahekou District, Dalian,
Professor
Harbin, Heilongjiang,
Liaoning Province, PRC 116027
Center for Health Policy &
PRC 150001
iohn5151@163.com
Management, Peking University
lgx@mail.hl.cn
Shuiyuan Xiao
Zhang Kaining
Qingyue Meng
Professor
Professor
Professor
Public Health School, Hunan Medical
Kunming Medical college
Center for Health Management and
Univ, 22 Beizhan Lu, Changsha, Hunan
Policy, Shandong University, 44 Wenhua
Province. PRC 410078
Xi Rd, Jinan, Shangdong 250012, PRC
Sphhmu@public cn.csh
Zuo Xuejin
Professor
Shanghai Academy of
Social Sciences
qmeng@sdu.edu.cn
Zhifeng Wang
Weifang Medical College.
Hu Angang
Yinchun Chen
Professor
Professor
Shengli Dajie, Kuiwen District, Weifang,
Professor
Health Executive Training Center,
Shandong Province, PRC 261042
Chinese Academy of Social Sciences
Tongji Medical University,
z hlifen gwang@163.com
Jing Jun
N0.13, Hangkonglu, Wuhan,
Professor
Hubei Province, PRC 430030
Qicheng Jiang
Chenyc2@sina.com.cn
Professor
Faculty of Sociology.
Health Management College,
Tsingua University
Jianmin Gao
Anhui Medical Univ. Anhui. PRC 230032
Professor
aydjqc@mail hfah.cn
Zhang Xiuran
Professor
Health Management Dept.
Xi'an Medical University, Zhuque Dajie,
Jianghong Rao
Institute of Social Security, Beijing
Xi’an, Shaanxi. PRC 710061
Professor
Normal University
Weig@irix.xamu.edu.cn
Social Science Dept., Jiangxi Medical
College, 161 Bayi Dadao, Nanchan,
Jiangxi Province, PRC 330006
Zhenhua Chu
Professor
Jiangsu Medical Information Institute.
No. 129, Hanzhong Lu. Nanjing. Jiangsu,
PRC 210029
HEALTH POLICY AND SYSTEMS RESEARCH IN CHINA - TDR/GEN/SEB/04.1
Project/Futures Group International
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About the authors
Qingyue Meng, MD. MPH, MA(Econ), is Professor of Health
roles of government in the health sector Recently he was
Economics and Director of the Centre for Health Management &
involved in preparing major policy papers on key health issues in
He is a Member of the
China, which were presented to the Chinese government by the
Policy, Shandong University, China
Advisory Committee of Health Management and Policy to the
WHO Representative in China.
Ministry of Health. His research areas include cost-effectiveness
analysis of health programmes and health care financing, and
Miguel A. Gonzalez-Block graduated from Cambridge University
his research team has addressed the development of costing
and obtained a Doctorate in Social Sciences from El Colegio de
methodology for hospitals, cost-effectiveness and financial
Mexico His research interests cover health policy and systems,
analysis of public health programmes, and the impact of health
reproductive health, and primary health care. He was the
care financing reform on tuberculosis control programmes.
Founding Director for Health Policy Research at the National
Shi Guang is Deputy Director of the Department of Health Policy
the Mexican Health Foundation in the design and development
Research and Associate Professor at the China Health Economics
of health policy options Gonzalez-Block was Health Specialist for
Institute of Public Health of Mexico, and collaborated through
Institute. He holds a Master’s Degree in Social Science and
the Inter American Development Bank, in charge of health sector
Health Management from Harbin Medical University. He has
analysis and loan projects for Nicaragua. Panama and Belize. He
conducted health policy and systems research in the China
is currently Manager of the Alliance for Health Policy and
Health Economics Institute since 1997 and has published many
Systems Research.
papers on health care financing, health delivery system re-con
struction, the governance mechanism in public health organiza
Erik Blas is Programme Manager of the UNICEF/UNDP/World
tion, and performance assessment of public hospitals in China,
Bank/WHO Special Programme for Research and Training in
in journals on health policy and management at home and
Tropical Diseases (TDR).Witn a background in public health and
abroad.
corporate management, he has long experience of addressing
large-scale health programmes in developing countries from
Mr. Yang Hongwei, MPPM, a National Programme Officer in the
both a research and implementation perspective. He has held
WHO Representative's Office, China, is working in the field of
positions such as Programme Coordinator for the Expanded
health development and health policy. He has worked on health
Programme on Immunization in Tanzania; Chief of the Planning,
related issues for more than 15 years, accumulating much expe
Management, and Training unit of the Global Programme on
rience and knowledge on health policies and their application.
AIDS; Chief Technical Advisor to the Central Board of Health in
After graduating from the University of Southern California, he
Zambia; and has authored several publications on health sector
focused on the issues of health and macroeconomics, and the
reform.
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