RPT-China to spend $124 billion on health-care reform

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BEIJING, Jan 22 (Reuters) - China plans to spend about 850 billion yuan ($124 billion) on health-care reforms over the next three years, according to a cabinet blueprint for change in the sector.

The State Council issued the three-year reform plan during a meeting on Wednesday, according to a statement on the central government's website (www.gov.cn).

The reforms aim to improve the coverage of basic medical insurance, to set up a system of "basic medicines" covered by the medical insurance system, expand the network of local-level clinics, improve the public health system and initiate pilot reforms to the operation of public hospitals, it said.

"According to initial estimates, all levels of government will spend around 850 billion yuan over the next three years to ensure these five reforms," the State Council said.

It did not spell out how much of that would be new spending or disclose details of how the reforms would be carried out.

The health care sector is one of the weak links in the social welfare system -- together with under-funded education and social security systems -- that creates a drag on domestic consumption and increasingly serves as a source of discontent.

Faced with poor medical coverage and soaring costs, millions of households are forced to set aside savings in case a family member falls ill, rather than spend. (Reporting by Jason Subler; Editing by Ken Wills)