 Financing reforms of public health services in China: lessons for other nationsXingzhu Liu and Anne Mills Social Science & Medicine, 2002, vol. 54, issue 11, 1691-1698 Abstract: Financing reforms of China's public health services are characterised by a reduction in government budgetary support and the introduction of charges. These reforms have changed the financing structure of public health institutions. Before the financing reforms, in 1980, government budgetary support covered the full costs of public health institutions, while after the reforms by the middle of the 1990s, the government's contribution to the institutions' revenue had fallen to 30-50%, barely covering the salaries of health workers, and the share of revenue generated from charges had increased to 50-70%. These market-oriented financing reforms improved the productivity of public health institutions, but several unintended consequences became evident. The economic incentives that were built into the financing system led to over-provision of unnecessary services, and under-provision of socially desirable services. User fees reduced the take-up of preventive services with positive externalities. The lack of government funds resulted in under-provision of services with public goods' characteristics. The Chinese experience has generated important lessons for other nations. Firstly, a decline in the role of government in financing public health services is likely to result in decreased overall efficiency of the health sector. Secondly, levying charges for public health services can reduce demand for these services and increase the risk of disease transmission. Thirdly, market-oriented financing reforms of public health services should not be considered as a policy option. Once this step is made, the unintended consequences may outweigh the intended ones. Chinese experience strongly suggests that the government should take a very active role in financing public health services. Keywords: User; fees; Government; budget; Public; health; services; China (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:socmed:v:54:y:2002:i:11:p:1691-1698 Ordering information: This journal article can be ordered from Access Statistics for this article Social Science & Medicine is currently edited by Ichiro (I.) Kawachi and S.V. (S.V.) Subramanian More articles in Social Science & Medicine from Elsevier |
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