Health & Insurance
Public Healthcare in China
Establishing public healthcare in China has always posed a tremendous challenge: The country covers an area of 9.6 million km² and is now home to 1.355 billion people, some of whom live in remote rural regions.
A National Health System Emerges
The beginnings of national healthcare in China date back to the foundation of the People’s Republic in 1949. Early government efforts focused mainly on two aspects.
Firstly, they were meant to improve sanitation, disease control, and nutrition. By working to provide clean water and hygienic kinds of waste disposal, as well as by exterminating vermin and parasites, local authorities could eradicate such contagious diseases as cholera or bubonic plague.
Secondly, as the country had a much lower urbanization rate, basic healthcare in China’s rural regions was given priority. Thus, a three-tier system of village doctors, regional township hospitals, and urban facilities was introduced.
However, due to political and economic developments, some of these issues were badly undermined. The failure of the "Great Leap Forward" (Mao’s collectivization campaign) ended with mass famine, leading to death from starvation, illness from malnutrition, and dropping fertility levels.
While the Cultural Revolution may then have benefitted rural healthcare in China, the collapse of the socialist welfare system in the 1970s and 1980s did not. A huge divergence between healthcare in China’s urban and non-urban areas, as well as coastal and interior provinces, emerged once more. Moreover, the out-of-pocket spending for associated expenses increased vastly.
Public Health Today
Despite temporary setbacks, the key indicators of public health show an overall positive trend. Today, the average life expectancy at birth is 75 years. Mortality rates among infants and children have dropped considerably, even within the last 25 years. 92% of the Chinese population has access to clean water, and two-thirds are provided with improved sanitation facilities.
As for medical staff, there are 146 doctors per 100,000 people, as well as 3.8 hospital beds per 1,000 residents. To choose a random comparison, in tiny Denmark, there’s a slightly lower quota of hospital beds (3.5 beds per 1,000 inhabitants), but a much higher number of physicians, i.e. 342 per 100,000 people.
The available physicians and clinics are still unevenly distributed between urban centers and the countryside. But the current policy for healthcare in China is trying to redress this. The quality of care also varies wildly, especially between public and private facilities.
Last but not least, people need a way to pay for their treatment, medication, etc. A new social insurance reform was introduced for this purpose.
The Social Insurance Schemes of 2011
In 2011, the new social insurance legislation set out to reform China’s healthcare system. There are now three insurance schemes providing basic coverage for 95% of the population.
The Urban Employee Basic Medical Insurance (UEBMI) applies to workers and employees living in cities. Their contributions are deducted from their salary via payroll taxes.
The money is divided between a pooled government fund and a personal savings account. The fund covers expenses for hospitalization and serious illness, while the personal savings pay for deductibles and outpatient treatment.
The Urban Resident Basic Medical Insurance (URBMI) covers the non-working population in Chinese cities, such as children, the elderly, etc. The scheme is partly financed through contributions from individual households, but mostly through government subsidies.
URBMI only reimburses the costs of hospitalization and treatment for catastrophic illnesses. Outpatient treatment and other expenses need to be covered by out-of-pocket spending.
The New Rural Cooperative Medical System (NRCMS) is supposed to revitalize healthcare in China’s countryside. Funds are raised through a mixture of individual contributions, support from collective enterprises, and government subsidies.
There are various NRCMS reimbursement schemes in different areas. At the most basic level, every non-urban resident should have access to catastrophic illness insurance.
Individual out-of-pocket spending on these costs has dropped significantly since 2002, when it accounted for 58% of all medical expenditures. However, patients still need to pay upfront for healthcare in China. Depending on their insurance scheme and treatment, they may be reimbursed for some of the costs – or none at all.
Therefore, several forms of supplementary coverage are quite popular. There is a special insurance scheme for civil servants, and companies may offer their staff additional insurance plans, too. Those who can afford it often take out private insurance.
Insurance for Expats
How do expats fit into this? The 2011 legislation didn’t only reform social security and healthcare in China. It also extended all coverage to foreign residents moving there for work (i.e. old-age pensions, compensation for workplace accidents, unemployment benefits, maternity leave, and medical insurance). However, this isn’t always an advantage for expatriates.
There are still ongoing debates about whether the benefits are attractive for expats or if they get access to them in the first place. Most foreign individuals with a Chinese work visa have to leave the country when they lose their job. But they could still be required to pay into the fund for unemployment benefits.
So far, the legislation for foreign nationals has been implemented in about 25 cities. In Beijing, for instance, expats contribute to all social security schemes. However, other cities, like Shenzhen, only levy contributions to the pension plan and to healthcare in China.
Some Chinese cities (e.g. Shanghai) haven’t yet implemented the law at all. Foreign-invested enterprises (FIEs) are very important for their local economy. Thus they want to remain financially attractive for FIEs by avoiding the associated costs for employers and employees.
If you work in a city where the social insurance coverage for foreign residents has come into effect, don’t worry! Usually, the contributions for employees amount to roughly 11% of their salary.
However, expats often prefer private hospitals with English-speaking staff to public healthcare facilities anyway. International insurance coverage (which may not be recognized by all public hospitals) is a must for many. If you are interested in getting private healthcare in China, have a look at our article on the topic!
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