April 6, 2009 / 1:27 PM / 11 years ago

China eyes completing health care reforms by 2020

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BEIJING, April 6 (Reuters) - The Chinese government aims to complete landmark health care reforms by 2020 to ensure safe and affordable coverage for its more than one billion citizens, state media said on Monday.

Beijing has already announced that it will spend about 850 billion yuan ($124.4 billion) on the initial stage of the programme up to 2011, though it has yet to spell out how much of that would be new spending or disclose details of the reforms.

"By 2020, China will have a basic health care system that can provide safe, effective, convenient and affordable health services to urban and rural residents," the official Xinhua news agency said in a synopsis of a policy document on the reforms.

"The core principle of the reform is to provide basic health care as a ‘public service’ to the people, which requires much more government funding and supervision," it added.

More than 90 percent of the population is expected to be covered by basic medical insurance by 2011, the report said.

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.

That has worried a government which is trying to encourage domestic consumption as a way of boosting economic growth which has been hit by a dry-up in export orders from key markets in Europe and North America due to the global financial crisis.

"The reform is aimed at solving pressing problems that have caused strong complaints from the public," Xinhua said, a reference to growing public complaints that health services are expensive and hard to access.

To this end, the government will better regulate the price of drugs and health services, focusing on essential treatment and basic medications, it added.

"Public hospitals will continue to be dominant providers of medical services, while more priority will be given to the development of grassroots-level hospitals and clinics in cities and rural areas," Xinhua said.

Other measures Beijing has taken or is considering taking to encourage Chinese to save less and spend more include raising old-age pensions, extending free education to children from poor families and cutting taxes on low-income households. ($1=6.834 Yuan) (Reporting by Ben Blanchard; Editing by Jeremy Laurence)

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