The Financial Implications of the Chinese Healthcare System

Abstract

Since the inception of the People’s Republic of China in 1949, the Chinese healthcare system has gone through many different phases and reforms. This paper introduces the state of China’s current healthcare system, the financial importance of the healthcare system, the government healthcare structure, hospital structure, and insurance system. The financial challenges of the Chinese healthcare system will be discussed, including shifts in demographics, insurance and out-of-pocket costs, national healthcare costs, overcrowding of large urban hospitals, divides between urban/rural and rich/poor healthcare, and overuse of medication. Next, the major reforms, which aimed to solve many of the financial challenges of the healthcare system, will be examined. The reforms will be studied based on five categories: insurance coverage and cost, individual and out-of-pocket costs, governmental costs, financial incentives to over-prescribe and over-treat, and medical outcomes and access to medical care. Afterward the outcomes will be analyzed to determine the efficacy of the reforms. The author will discuss her primary research to ensure the most recent opinions regarding the healthcare system have been included. Next, recommendations will be given for Chinese healthcare improvement based on the findings in the paper. Finally, the author will examine how the Chinese healthcare system impacts the field of finance as a whole.