Shouldn’t this story be on p.1 of every newspaper?
Now China’s government has unveiled a controversial plan to achieve universal care that would both increase health-care funding and control prices.
As this morning’s WSJ explains, the proposed plan would be quite a shift for China. The draft plan’s overall goal is to cover 90% of the population within two years and achieve universal care by 2020. It aims to return to non-profit national health care, an idea that was largely abandoned in the country 1980s.
This all stands in contrast to China’s current system, which provides little government funding to government hospitals and requires patients to pay heavy out-of-pocket expenses. The WSJ notes that out-of-pocket payments made up more than 60% of health spending in China at the end of the 1990s.
The plan – drafted in consultation with groups including the World Health Organization, the World Bank, consultant McKinsey & Co. and a few Chinese university-based public health experts – requires all revenue raised by public hospitals to be funneled to the state. The government also aims to set pricing standards for medical services.
Great. I wondered the otehr day on Brian Setser’s blog about China’s willingnees and ability to impose higher consumption. They already had it in hand.
You would expect government control/monopoly to lead to higher prices(increasingly in the form of waiting) and lower output (fewer services supplied).
But the system in China is currently so bad, that if suppliers are given greater assurances of regular payments, output might increase and you might actually see prices fall (less of a cross-subsidy of customers.)
Also, since basic sanitation and basic health care give you the most dramatic increase in outcomes, with China starting from a very low point you could see rapid improvement in basic health outcomes.
However you will also probably see a secondary system spring up offering better services for a price rather quickly.
So this change in China could be a big improvement over their current system.
However the situation in America is very different starting point with very different outcomes.
Maybe you can both increase funding and control prices, but I don’t think in the common sense of the words.
Obviously, anyone who speaks out against the government won’t be getting health care…But who would want socialized health care anyway?
Will they have to stop smoking cigarettes?
But who would want socialized health care anyway?
Canadians, Australians, Europeans, the Japanese…
Who would want private for-profit health care?
Bryan Caplan’s post at econlib.org (http://econlog.econlib.org/archives/2008/10/why_dont_the_ch.html)
hits the nail on the head. This is a good policy if the Communist Party wants to stay relevant (without having to resort to all that overt brutality) and show that they care. Whether it does or does not improve health outcomes is secondary, it buys them some more support.
Mr. econotarian,
You assume nothing else has changed in China from 1978 to 2008, like nutrition, income, etc.
absurd choice … with the help they received I am not surprised they made the wrong decision
I wouldn’t trust those numbers on infant death rates. According to most left-wing sources, the US has the highest infant death rate among developed countries. If any of those numbers were true, why would people from all over the world come to the US for treatment? Every day you read some article in the paper/internet about poor people from the third world coming to the US for life saving treatment. Fact of the matter is, the US has the best treatment for the money, especially if you are criticaly ill. India may be cheaper on an individual basis. But when it comes to treating the massses and timeliness, the US wins. In Canada, you get on a waiting list. That’s not health care.
Jorod,
I think you need to do some reading on what causes IMR, sure health care is important, but far from everything. E.g. US has quite high proportion of teen pregnancies, which also leads to higher IMF. Also, US indeed have very good health care, but it is access that is the problem (well, it is in every system, it is only the ration methodologies that differs) and when rationing by purchasing power that will hit hard on indicators such as IMR.
Get with it guys. You can see a health care professional for $39. We have supermarkets with better health care than most countries…
I have to say as a Brit the fear of nationalised healthcare looks vastly overblown. I’d much rather deal with the NHS than battle insurers or the risk of bankruptcy.
The crucial things about medical care that differs from other goods is that people’s need for it varies wildly by risk, when they need it most they are usually rendered least able to pay for it, and the end user finds it very hard a priori to work out what they need and whether it is any good.
Isn’t “if when consumers wanted to design their own car or computer they were told what they could only design their machine based on arbitrary government mandates that varied state-by-state” an accurate description of the current situation? I’m given to understand that e.g. the famous GM electric car trial in California was not brought to market not because the cars didn’t work but because they couldn’t tick all the regulatory boxes.
The crucial things about medical care that differs from other goods is that people’s need for it varies wildly by risk, when they need it most they are usually rendered least able to pay for it, and the end user finds it very hard a priori to work out what they need and whether it is any good.
Well, Its nice to know that the Chinese government has unveiled a controversial plan to achieve universal care that would both increase health-care funding and control prices. Thanks for this very informative post.
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