Health systems in rural areas:
A comparative analysis in financing
mechanisms and payment
structures between China and India
Shijun Wang
2011
Supervisor: Kjerstin Dahlblom
Abstract
Background: Health is a major concern all over the world, especially for the
developing countries with an extremely large population and limited health resources,
and with wide gaps in every aspect between urban and rural areas. The aim of the
thesis is to analyze the rural health care systems in China and India, through
comparing differences and similarities and putting forward recommendations for
each country.
Methods: This thesis is a literature review. In this thesis the method applied is
Bereday’s classical comparative pedagogy including four steps – description,
interpretation, juxtaposition and comparison.
Results: On the basis of the introduction giving the background and descriptions of
the rural health systems, and then by comparing them regarding structure, financing
mechanisms and reimbursement structures, similarities and differences was found
between these two rural health systems. They both have similar three-level health
centers under the rural health system. The majority of the public health care costs are
paid by the governments, with a much smaller proportion paid by rural individuals;
even most of the costs are free in rural India. However, while under the rural health
system in China, a social insurance as the financing mechanism is running well
through pooling the risks and contributions, a formal comprehensive mechanism is
lacking in India, where the government just provides most of the health care services
for free.
Conclusions: In general the two rural health systems work well both in China and
India to some extent. However, both rural health systems have imperfections. In
China, instead of the standard amounts, different amount of premiums and
reimbursements fixed deductibles and ceilings should be considered depending on
different income levels of the rural population, especially for the extremely poor and
a few rich people. In India, the financial problem that the government could not pay
such high costs for most of the free health services is the first to be solved. The Indian
government is planning to design a financing mechanism like pooling risks and
reimbursement for payments under the rural health system instead of the universal
free health care services in rural areas.
Key words: health system, rural, comparison, China, India
1
Content
Abstract ................................................................................................................ 1
Content ................................................................................................................ 2
Introduction ........................................................................................................ 4
1.1 The rural health care system - A public health issue ............................. 4
1.2 Previous research on comparative analysis in health issues ................ 5
Aims .................................................................................................................... 7
2.1 Overall aim ............................................................................................. 7
2.2 Specific aims .......................................................................................... 7
Materials and Methods ....................................................................................... 8
3.1 Material collection ................................................................................. 8
3.2 Methods of analysis ............................................................................... 9
3.3 Literature search process .................................................................... 10
Results ................................................................................................................ 12
4.1 China ..................................................................................................... 12
4.1.1 Background ................................................................................. 12
4.1.2 New Rural Co-operative Medical Care System in China ...........14
4.1.3 Financing mechanism ................................................................ 15
4.1.4 Reimbursement structure ..........................................................18
4.2 India..................................................................................................... 20
4.2.1 Background ............................................................................... 20
4.2.2 Rural Healthcare System – A Three Tier System in India ....... 22
4.2.3 Financing Mechanism and Payment under RHS ..................... 25
Discussion ......................................................................................................... 28
5.1 Comparability in the two countries ..................................................... 28
5.2 Juxtaposition and comparison ............................................................ 28
5.3 Conclusion ........................................................................................... 32
2
Limitations ........................................................................................................ 35
Acknowledgements ........................................................................................... 36
References ......................................................................................................... 37
3
Introduction
1.1 The rural health care system - A public health issue
According to the global health movement “health for all” [1] undertaken by the World
Health Organization (WHO), health care service is supposed to be a necessary service
provided to the whole population, by means of distributing the health resources
evenly, regardless of wealth or areas. Everyone has the same right to equal treatments
as well as access to essential health care when in need and seeking it.
In fact, “health for all” has been a goal yet to be attained since it was adopted in 1981,
both on a global level and on a national level in a number of countries. From the
international perspective, health resources are not evenly distributed among
countries. One of the most important human resources, the density of physicians
reflects a remarkable inequality all over the world. The Figure 1 from the World
Health Statistics 2010 [2] shows the number of physicians all over the world. In most
developed European countries there were more than thirty physicians per 10,000
populations, meanwhile the estimate number was less than five in many poor African
countries.
Figure 1 Global distribution of physicians (per 10,000 populations) 2000-2009
On a national level, uneven distribution of health resources exists in different aspects
for different countries. In some developing Asian countries, the disparity of health
care resources due to the proportionality of socioeconomic development between
4
rural and urban areas becomes one of the most pressing concerns. To be more
specific in this thesis, the two selected developing Asian countries China and India
have similarities in geographical, demographical, historic, cultural and
socio-economic conditions, which prove the comparability for them to be studied
comparatively. The disparity and inequity between urban and rural areas is serious
because of their complex environment and progress of the social development with
new coming issues such as economic transition. From a macro perspective, health
care system in rural areas is considered to be the most crucial issue which is urgent to
be well developed in these Asian countries. Lacking of health care services in rural
areas may result in more health and even social problems, which might worsen the
health care system, and bring the system in a vicious circle.
1.2 Previous research on comparative analysis in health issues
According to the collected literature, comparative analysis has been used more in
education research than in health. In search for literature on comparative health
systems three articles could be found about international comparison in the topic of
health systems, and among them only one article refers to rural health systems.
Broadening the topics and the key words to search for relevant or similar researches,
more papers were collected on the experience of international comparison in health
issues. More information about the literature search process and the method for
comparative research will be introduced in the methods section (p 10) of this thesis.
In this part the three most relevant previous studies are discussed.
The most relevant research to the topic found is a PhD dissertation “A research on
foreign health systems and rural medical care systems” by Zhang Kuili in 2008 [3],
including a chapter about health care system for rural areas in some developing
countries. He described the country profile, existing health situation, entire health
system, and rural health system for India, Thailand, Brazil and Mexico, and for
Thailand also the health system reform. However, there were no comparisons
between the countries or with China. The authors also analyzed the Chinese special
setting and draw some lessons in different aspects such as health regulation and
supply of health care services from the experience of both developed and developing
countries. The suggestions for China only concerned in the overall health system but
not specifically in rural health system. Since in this dissertation each country was just
described without comparison with other countries or China, the research method is
not quite suitable or effective for this thesis.
Another research about comparison in health systems is “Advanced Asia’s health
systems in comparison” by Robin Gauld et al [4] in 2006. The authors compared the
countries and regions of Japan, South Korea, Taiwan, Hong Kong and Singapore
regarding “primary care organization, rationing and cost containment, service quality,
and system integration” [4]. Although these countries and regions are developed,
their health systems differ and problems inevitably exist in each system. In general,
the authors gave rough information about the health systems, summed up the
5
problems and pressures these countries faced, and provided ideas on considerable
opportunities.
The last article which is a comparative study on health system is “Health system
organization and governance in Canada and Australia: A comparison of historical
developments, recent policy changes and future implications” [5] by Donald J.
Philippon and Jeffrey Braithwaite in 2008. The authors did not focus on the policies
and regulations or the content of the health system. Instead, they explored a new
perspective that the health systems in Canada and Australia have evolved in a similar
way and how the policy changes affected on governance of health systems. To
elaborate the changes and the progress, the older health systems before the evolution
are introduced firstly, and then the ongoing structural change is discussed to analyze
how the policy changes affect the governance of the health systems. Finally in the
conclusion part the authors discussed the Canadian experience and Australian
experience respectively and gave the future implications.
These studies in international comparative analysis of health systems concern diverse
angles of view, but most of them focused in one or more aspects of the health system
instead of the system itself. Regarding the research method in health systems in rural
areas, no paper was found applying any standard comparative analysis method to
conduct the comparison study. Instead, in this thesis, the classic four-step
comparative pedagogy by Bereday was employed for the comparison of rural health
system between China and India.
6
Aims
2.1 Overall aim
The overall aim of this study was to explore and compare the financing mechanisms
and payment structures of two rural health systems in China and India.
2.2 Specific aims
To describe the background information of China and India and the structure of
health systems in rural areas.
To interpret and juxtapose the two health systems in structure, financing
mechanisms and payments, and analyze the differences and similarities in order to
compare between two countries.
To provide insights and references and put forward recommendations for each
country on improvement of the rural health systems for both countries.
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Materials and Methods
3.1 Material collection
This thesis is a literature review and the types of literature include official documents,
reports and articles. The sources of the materials are from the websites of health
related organizations and sectors such as the WHO, the government webpages and
the ministry of health webpages, international and national databases and other
useful websites.
In the introduction part, the background information is from the country profiles by
the governments and the WHO, with some data indicating the health situation for
both countries from the WHO statistics. To describe the health systems of China and
India, documentations are required from the government and the Ministry of Health
for China and the Ministry of Health & Family Welfare for India, supplementary
information referred to other official or unofficial websites. A great deal of
information is available and helpful in the official websites of the WHO, the
governments and other relevant official sectors. Besides, several articles and
dissertations were useful for the material collection, giving sources and insights to
activate for new thoughts.
When collecting these materials, databases are the most important instruments and
the internet search engines also work well for searching information. The Chinese
database Wanfang Data and the international database PubMed were used as main
databases. The internet search engines used were also two; one is Google as
international search engine and the other is Baidu as national search engine in China.
Referring to this topic, “rural health system”, “China”, “India” and “comparative
study” were used as the key words in search for the relevant research publications in
the two databases and also through the internet search engines. Other than Pubmed
which is specifically medical database, Wanfang Data covers all the research subjects.
So the category of “medical and health” is set as the default option for searching.
One article which is published in English in 2006, comparing some developed
countries and regions in Asia [4], was translated and published twice in Chinese in a
Chinese journal by two different researchers in 2008. Through comparing the two
versions, the original one and the translated one, it was concluded that it was much
better to read the original article in order to avoid cultural background differences
and misunderstandings. Moreover, in some articles the references were not cited in a
standard way, which was also paid attention to in this study.
In India, all the literal materials such as official documents and articles were written
or published in English, so it was much easier to read and cite directly. However,
8
most of the documents in China were published in Chinese, except for those from the
WHO, which required more time and work for the author in understanding and
translating them from Chinese into English.
3.2 Methods of analysis
This is a study on comparative analysis. When reviewing the collected articles, there
were not many standard methods for comparative analysis found to apply, except for
the notable classical comparative pedagogy [6] by George Z. F. Bereday. Bereday is
professional in education, sociology, juvenile law, and especially well-known for
comparative study in education [7]. His pedagogy has four steps in comparative
analysis – description, interpretation, juxtaposition and comparison. At the first
stage of description, all the relevant information would be collected and described in
detail clearly and logically to make it well understood; at the second stage of
interpretation, it is necessary to look for the factors influencing the health systems
stated at the first stage and analyze how the patterns were taken; at the third stage of
juxtaposition, all the features or factors in the two settings should be systematically
sorted and listed by summarizing and classifying in a certain way; finally at the last
stage of comparison, all the similarities and differences will be figured out and
compared according to the certain list and classification as the third stage.
Examples of studies which applied Bereday’s comparative pedagogy for comparative
analysis in education are “A comparative study on student loan system of high
education between England and Australia” [8], “Comparative analysis on rules of
sports law between China and Japan” [9] and “A comparative of the school societal
interface in three countries” [10], and so on.
Since this method has worked successfully in comparative analysis in education, it
might have been used in other subjects as a research universal tool for comparative
studies. Among the collected literature, there is one article which had used Bereday’s
comparative pedagogy in health in 2008: “Comparison of hospice care policy
between China and the United States” [11]. The authors described, interpreted,
juxtaposed and compared the policies for hospice care between China and the United
States to analyze the differences and similarities in aspects of “plan categories,
beneficiary inclusion criteria, service control mechanism, related regulations, and
fund resources” [11] between two countries. Then the authors found out the
influencing factors for the hospice care policy making – socioeconomic conditions,
the overall quality of the population and the traditional medical theories [11]. This
article could be a test to prove the reasonability of Bereday’s comparative pedagogy in
comparative study in health.
9
3.3 Literature search process
Figure 2 Literature search process
This thesis is a literature review, so one of the most important steps is managing
literature. The Figure 2 shows the whole process of managing literature, including
three stages – searching for literature, filtering the collected literature and looking for
useful information from the filtered literature and citing. There are three categories
of the sources for literature searching, relevant organizations’ official websites and
through the internet search engines.
In the first category database, the international database Pubmed and the Chinese
database Wanfang Data were selected as main database. When searching in the
database, key words “rural health system”, “China”, “India” and “comparative study”
were used, and there were 513 publications found. In Stage 2, reading all the
abstracts, 457 publications were excluded if they were not related to one of the two
criteria; one is relevant to the key words and the other is focusing on the comparative
10
study. In other words, some of the searched publications were not related to the topic
of health system but they used specific methods for comparative study; meanwhile
some were about health system but the authors did not use any comparative analysis.
It would be preferred if the literature matched both criteria.
Skimming for the overview of the 58 publications, there were 39 selected for full text
reading to collect specific information and cite them or study the method for
comparative analysis in this thesis. In the introduction part above some relevant
previous studies were discussed. In the second category, the relevant websites
included WHO, governments of the two countries and health related sectors. Types of
information were documents, reports, country profiles, statistics, tables, graphs and
other literal information like the short Indian history for background description of
India in the results part. Then filtering all the documentations, 27 of them had useful
data for this thesis, such as data about health indicators, short description of
countries’ history and health system, policies from official documents under the
health system and so on.
In the third category, they were two internet search engines, Google as international
one and Baidu as Chinese one. The search engines were for other required additional
information which could not be found out from the first two categories. For example,
when the words “poverty trap” and “Bereday” were introduced the first time in the
thesis, not every audience has knowledge of these words, definitions of the words
were required and they could be searched through the internet search engines.
Another example was the currency rate. In table 1 the expenditure was discussed.
This data was cited from a Chinese articles and the monetary unit was Chinese Yuan.
But in this thesis it was necessary to convert the Chinese Yuan to the US Dollar by
special website searched through Google. Under the literature search process, the
literature were labeled with numbers and sorted in categories.
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Results
In this part the first two steps of Bereday’s comparative pedagogy were applied to
describe the two settings of rural health systems in China and India and interpret the
background and influencing factors for the current situation.
4.1 China
4.1.1 Background
China is one of the oldest civilizations in the world, covering an area of 960 million
square kilometers, full of rich and various natural resources and cultural heritage,
with the largest population, about thirteen billion from the 5th China National Census
in 2000 [12]. The life expectancy at birth is 74 years, which is approximately the
same as the regional 1 average 75 years, and higher than the global average 68 years;
meanwhile the healthy life expectancy at birth is relatively lower at 66 years.
Regardless of the different wealth groups, the Gross National Income per capita
converting into Purchasing Power Parity in 2008 is 6,060 US$; and the per capita
total expenditure on health is a little more than 400 US$ referring the statistics in
2007. In respect to some specific indicators of the utilization of health care services,
setting the births attended by skilled health personnel and the measles immunization
in 1-year-olds as examples, the percentage and coverage reached to 98% and 94% in
2000 [13].
In a tough and long history, China went through several wars and transformations,
during which the country has been richer from poor and backward. After the
founding of the new China in 1949, Planned-Economy system was adopted to
stimulate economic recovery under the government regulations. With this system,
another system named Hukou which is used to manage the population registration,
in which all the citizens are registered as two types, one is Urban Hukou, and another
is Rural Hukou. The two types of registration determine the different treatment and
the welfare between people who are born in urban areas and who are born in rural
areas.
Nowadays in China, due to this kind of registration system, inequity between urban
and rural areas exists in most social concerns. One of the aspects people concern
most is the public health care, such as health resource allocation and health care
service delivery. Under the condition that the socio-economic level is too low and all
the social resources are limited to share, people born in rural areas with a rural
hukou cannot have the same right and the equal treatment for health care services. In
a survey on health expenditure for urban and rural residents in China by Zhang YM
1
China is located in the WHO Western Pacific Region.
12
and Feng XS [14], they showed the results of the survey in two categories between
urban and rural residents. The expenditure is higher for urban residents than rural
residents every year from 1999 to 2006, with a quite low ratio that no more than 0.3
(87.26/25.26), except the year 2006 with the ratio 0.39. The health expenditure is
increasing both for urban and rural residents, and the growths are respectively 153%
for urban and 173% rural residents [14].
Table 1 Per capita health expenditure for urban and rural residents 1999-2006 (US$) 1
Per capita health expenditure
Year
Urban
Rural
1999
87.26
25.26
2000
101.05
26.72
2001
105.41
30.43
2002
122.70
32.24
2003
137.84
34.14
2004
156.87
37.49
2005
139.57
39.60
2006
143.34
54.97
Only when the ones who have much more money than most rural residents, they
could break the barrier to seek more and better health care in cities; nevertheless,
they have to pay at a larger expense than urban citizens without a guarantee for
exactly the same health care services. But for most rural residents, a serious illness
would be considered the same as a natural disaster because of the inaccessibility or
unaffordability for advanced health care services. In order to improve the health care
in rural area and narrow the gap between rural and urban areas, the Chinese
government has established a New Rural Co-operative Medical Care System
(NRCMCS) [15], independent of the health care system for urban residents. It
1 The monetary unit was Chinese Yuan in the original article. The average rate of USD to 1 CNY was
0.124306 in March, 2006.
13
considers the special situation and the particularities of rural region and adapts to the
demands of rural residents.
4.1.2 New Rural Co-operative Medical Care System in China
In the year 2003, the Chinese government initiated the NRCMCS [15], following a
period almost without a formal comprehensive rural medical care system, instead of
the old collectivism-based rural medical system which had lasted for almost 40 years
from 1950s to 1980s [16]. There are several influencing factors in a special economic
and scientific situation seriously impacting the old system to stimulate the reform of
health care system. The most important reason is that the market-oriented rural
reform as the planned-economic system in China was broken. As the old
planned-economic system collapsed, the corresponding old health system could not
work in a new different setting any more, and it encountered the breakup as well. As
a result, seeking health care became more difficult and even impossible for a lot of
rural residents. On one hand, without the collectivism-based medical system, people
had to pay for most health care services by themselves; meanwhile the reality was
that they could seldom afford most services because of extreme poverty and they
were likely to become much poorer and even suffered family bankruptcy because of
paying for the health care services due to illness, a situation named the poverty trap
[17]. On the other hand, the inequity between rural and urban areas reflected not only
in economic and income levels, also in structure such as medical equipment and the
level of skills of health workers, so even though a few people who could afford the
health care services could not have the right medication or treatment. Under this
situation, a new health system for rural area was required urgently in step with the
new environment. The government has defined and cleared the objectives of the new
system: “1) to improve the health of the rural population, 2) to reduce poverty due to
illness, 3) to provide financial risk protection to patients with catastrophic health
problems and 4) to increasing farmers' satisfaction with health services” [18].
This NRCMCS was at first launched as an experimental project in some selected rural
areas in China [16], aiming that the coverage was going to be extended progressively
year by year till the year 2010 when all the rural residents are involved in this system
to access the health care services. In this system, there are three levels of health
centers, which are village clinics, township health centers and county hospitals. At
the lowest level of small village clinics, due to the poor skills and equipment, and the
limited health workers with an average of two doctors per population of 1,000, only
the preventive and the primary health care services are available to rural residents
[19]. It is able to meet the most basic demands of health care services. At the middle
level of the township health centers as out-patient clinics, more different services are
provided and among every 10,000 to 30,000 population there is one such township
health center [19]. Another significant difference from the village clinics is that beds
are provided for patients who need the hospitalized treatment in the township health
centers but with very limited amount. At the third level are county hospitals, staffed
by the professional health workers graduating from authorized medical schools and
14
equipped with a variety of medical instruments with advanced technology. For each
county hospital, 200,000 to 600,000 people are served [19]. As the final level of
health centers they accept the rural patients only if they suffer the most serious
illness and cannot receive the appropriate treatment at the first two level health
centers.
4.1.3 Financing mechanism
Under the NRCMCS, one of the most important parts is the way of financing health
care in rural area, which is also an innovation for the health system reform. It is
called the New Rural Co-operative Medical Scheme (NRCMS), instead of previous
rural co-operative medical scheme [20]. In this scheme, the old collective way of
financing was abandoned, as the user fees had been charged to compensate for the
reduction of the expense by the government as a result the accessibility to health care
for the whole rural population was hardy gained. So it introduces a pool of fund as an
insurance in which a certain financing mechanism and reimbursement structure are
adopted to describe the proportions of the contribution the three stakeholders make
respectively and how to reimburse the rural individual when they actually pay for the
health care services.
To operate the financing mechanism, there are two separate accounts for the
insurance fund, one is the personal account, in which is the premium paid by each
individual rural resident, another is the mutual account that collects the premium
from the revenue of the central government and the local governments [15]. For the
three stakeholders - the central government, local governments and the individuals the proportions and the amount of premium are stipulated. The central government
sets the minimum standard for the premium in principle; meanwhile the specific
payment level could be decided by the provincial government itself adapting their
own local situation such as socio-economic status and income of rural people above
the minimum standard stipulated by the central government. The provincial
government as a unit receives a proportion of the funding from the national financial
allocation and put them into the mutual account. This is the contribution to the
NRCMS by the central government as the first stakeholder. Then is the share of the
local government. Since the provincial-level government is set as a unit to collect
funding from the central government, the provincial government is the second
stakeholder that is responsible for another part of the total contributions. This part is
rolled into the mutual account as well with the funding from the central government.
The two contributions of pooled premium are managed by the provincial government
and are going to be allocated to counties and towns for reimbursement. That is the
way the new system is pooling the risks and the contributions. As the individual
stakeholder, the rural residents share the smallest proportion of the contributions.
The payment from rural individuals goes to the personal account and is in the charge
of the township financial bureau. The contributions of three proportions are collected
once a year from each stakeholder [15].
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However, due to the serious differences in both socio-economic development and
people’s income between relatively better developed regions in the eastern part of
China and the poorer regions in the middle and the western parts of China, the real
proportions of contributions from the central government and the local government
are not the same. Only for the areas in the middle and the western China, where the
economic status is bad and people are poor, would the central government shares a
part of the premium. For the rest parts, including the eastern rural areas and few
better areas in the middle and western parts, the contributions are mainly paid by the
provincial government without the subsidies from the national financing allocation
by the central government. So in the complex situation of China, people in urban and
rural areas, or in developed and developing regions have different health systems, as
well the NRCMCS does, having different standards in different settings.
In the year 2003, the first official document about implementing the NRCMCS was
released by the Ministry of Health in China [15], indicating the financing mechanism
of pooling the fund. In that document, a total amount of premium was set at 4.40
US$ 1 per person. Among the 4.40 US$ premium, 1.47 US$ for the personal account,
that was only about 33% of the total premium, was collected from rural individuals.
For another 2.93 US$, in the middle and western parts of China, the central
government and provincial government paid 1.47 US$ each into the mutual account;
in the eastern part of China the provincial government would be responsible for the
rest 2.93 US$. Besides, in some developed provinces, the amount of the premium
might be increased a little, which could be decided by the provincial government
itself.
When this document was released the first time, the new system was considered as an
experimental project only in some selected counties. The system has been improved
year by year, more and more counties have adopted the trial. The NRCMCS has been
officially established and about to gradually cover the entire China. Progresses have
been made since the system initiated in 2003, reflecting on the level of premium. The
first change happened in 2006 [21]. The central government decided to increase the
premium as the GDP increased with a higher income and costs for living in China.
The previous level of premium was not enough to pool the risks among rural
population in order to afford all necessary expense on health care services. The first
improvement happened in 2006 in the official document by the Ministry of Health in
China, aiming to reach the amount of premium from 1.47 US$ to 4.40 US$ both by
the central government and the provincial government during 2006 and 2007. This
policy was carried out for farmers living in the middle and western parts of China and
farmers in better developed eastern part were still supported mainly by the provincial
government without the national financial allocation. Henceforth the level of the
pre-paid premium has been raised gradually in the year 2008, 2009 and 2010 [22];
moreover, since 2008 the central government to some extent has contributed a small
proportion of subsidies to the NRCMS for farmers in the eastern part of China
1 The monetary unit was Chinese Yuan in the original documents. To compare the money in Table 2, it is
refered to the currency rate in January, 2010. USD to 1 CNY was 0.146476.
16
without certain specific amount or proportion. According to the latest official
document about the NRCMCS, till 2010 the total pre-paid premium is set at 21.98
US$, with 4.40 US$ paid by individuals which takes up only 20% of the total amount
and the rest 17.58 US$ contributed by the central government and the provincial
government [23].
Table 2 Annual contributions of pre-paid premium by individuals and the government
2003-2010 (US$)
Year
2003-2005
2006-2007
2008
2009
2010
Individual farmer
1.47
1.47
2.93
2.93
4.40
2.93
5.86
8.79
11.72
17.58
4.40
7.32
11.72
14.66
21.98
Central/Provincial
Government
Total
Obviously the trend of the input of pre-paid premium has been largely rising every
time a newer version of the official document released. From 2003 to 2010, the total
premium increased by 400% from 4.40 US$ to 21.98 US$; among them, the share of
individuals raised much slower at the rate of 200% than the total amount and the
share of the government with 500% high growth. Comparing the two different payers,
the growth rate of the government’s contribution is quite higher than that of the
individuals’ contribution. The proportion of individual’s payment decreased， with an
increased proportion from the government’s payment. It is easy to find out that the
Chinese government has carried out a series of policies and provide more financial
supports to ensure the successful implementation of the NRCMCS.
In principle the NRCMCS and the NRCMS are voluntary. That means farmers in
rural areas could decide whether to participate in this scheme or not and nobody
would be constrained to enroll in it. However, due to the active encouragement from
the government with a large amount of subsidies and improved health care services
to secure farmers’ primary health care, most farmers changed their attitude to
participate in the scheme. As a result, the coverage among rural population has
rapidly extended during these years, from tens of pilot counties to almost the entire
rural population nowadays.
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4.1.4 Reimbursement structure
The central government formulates several main models for the insurance benefits
and the reimbursement. These main models guiding how to use the premium funds
to pay for the health care services are covering both inpatient and outpatient care,
covering inpatient and high cost outpatient care, covering inpatient care only and
covering inpatient care with pooled government contributions and covering
outpatient care using household contributions as savings accounts [20] – an account
shared within a family in which there should be a certain proportion of each family
member’s premium was rarely used and finally abolished because of its weak
function. In practice, since situations and socio-economic levels varies widely in the
whole country, each provincial government has the authority on the base of these
main models to make the specific regulations and standards for the reimbursement
in their own province and the counties within it are responsible for the
implementation and administration of the scheme. So every provincial government
has designed a specific benefit package determined by the available funds from the
government and individuals, farmers’ income and costs of the health care services in
rural areas. They set the deductible that is the minimum payment by the individual
farmers and the ceiling that is the maximum reimbursement supported from the
pooled premium contributions. The government prefers to use most of the funds to
pay for higher cost services which are coming more from the inpatient care services,
according to the third model mentioned above – covering inpatient care only, for the
total contributions pooled from the individuals and subsidies earmarked from the
government have not yet been enough for most health care services. But recent years
the government has concerned about outpatient health care a little more than before.
Thus in a few provinces policies in reimbursements for outpatient health care
services have come out.
In general among the whole country the average reimbursement rate is estimated of
30% to 80% for inpatient services [20]. The reasons why the top rate and bottom rate
vary much are firstly different provinces have different levels for reimbursement on
the basis of their economic levels and health care conditions, secondly different
reimbursement rates are also determined by different medical facilities and
equipment and various health care services. In respect to the three levels of health
centers, the payments covered by the scheme have differences as the rate of
reimbursement is approximately from 70% to 80% for the health care services at the
lowest level village clinics and the middle level township hospitals and about 60% at
the highest level county hospitals. For some rare illnesses which are not able to be
cured in the three levels of health centers, there is a policy about referring these
patients to larger hospitals in cities outside the counties. Under this circumstance,
the costs would be covered at about only 30% by the scheme and the rest have to be
paid by the farmers themselves.
18
Example 1
Here is an example about the reimbursement in Jiangxi Province in the middle part
of China. According to the official document released by the Department of Health in
Jiangxi Province in 2006 [24], in this model the scheme focused on covering the
costs for inpatient health care services which cost more than outpatient health care
services.
Table 3 Reimbursement structure for inpatient care in Jiangxi Province in 2006
Deductibles
Ceilings
Reimbursement
(US$ )
(US$)
rates
Township hospitals
12.79
1917.78
60%
County hospitals
38.36
1917.78
50%
Appointed advanced
76.71
1917.78
40%
102.28
1917.78
30%
Levels of hospitals
1
hospitals outside county
Un-appointed advanced
hospitals outside county
As in Table 3, for the inpatient care, the deductibles of the payment were 12.79 US$,
38.36 US$, 76.71 US$ and 102.28 US$ respectively for health care service for one
single disease at township hospitals, county-level hospitals, appointed advanced
hospitals outside the county and un-appointed advanced hospitals outside the county.
Farmers had to pay what was below the deductibles by themselves and the excess
amounts over the deductibles were paid by the scheme. The corresponding
reimbursement rates for the four types of hospitals were 60%, 50%, 40% and 30%.
The ceiling amount of the reimbursement was fixed at 1917.78 US$ within one year.
In addition, every case of childbirth would receive an additional fixed subsidy of 19.18
US$ and the fees for the childbirth would be paid as usual. When farmers were
treated by the traditional Chinese treatments and medicines in appointed hospitals,
the imbursement rates could raise by 10% in the same level hospitals [24].
1 The monetary unit was Chinese Yuan in the original report. The average rate of USD to 1 CNY was
0.127851 in December, 2006.
19
Example 2
Another example is from Shanxi Province. In the speech debrief from Shanxi
provincial government in a national conference about the NRCMCS in 2007 [25],
data about the imbursement amounts and rates were reported. In the year 2004, the
total amount of imbursements was 1,554,630 US$ 1 by the NRCMS; meanwhile there
was 1,145,102 US$ covering the inpatient health care services, which took up 74% of
the total imbursements. Among the total expenditures for inpatient care both from
farmers’ out-of-pocket money and from the scheme, the proportion by the scheme
was 28% and the rest 72% was coming from out-of-pocket money. In the year 2006,
the total amount of imbursements was 52,938,600 US$ by the scheme, increasing a
lot by 3300% compared with the amount in 2004; the amount of imbursements for
inpatient health care services was 47,373,260 US$, 89% out of the total. Among the
total expenditure for inpatient care the proportion by the scheme was increasing to
35% from 28% in 2004. Compared with non-imbursements for outpatient health care
services in Jiangxi Province [24], the Shanxi provincial government made efforts to
covering some of the costs of outpatient health care services.
4.2 India
4.2.1 Background
India, a neighbor country of China in South Asia, has the second largest population of
1,181,412 thousands in the world, out of which there is 71% population living in rural
areas, and covers the land 298 millions square kilometers. The life expectancy at
birth and the healthy life expectancy at birth for both sexes are 64 years and 56 years,
referring to the year 2007 [26]. Both are lower than China by 10 years. The Gross
National Income per capita converting into Purchasing Power Parity is 2,930 US$, at
a quite low level compared with the regional 2 average 3,063 US$ and the global
average 10,307 US$ [26], so that it is conceivable that per capita total expenditure
could not be high. As the same as the regional average level, it has only been about 40
US$ in the year 2007. In terms of the utilizations of health care services, considering
the same indicators as China, the coverage of births attended by skilled health
personnel and the measles immunization in 1-year-olds are respectively 47% and 70%
from the latest statistics in 2000 [26].
Since India is another large and historic country besides China, it is not only well
known for its self-sufficient agricultural production and electronic industry, and also
for credible histories, namely the Ancient History [27], Medieval History [28] and
Freedom Struggle History [29], especially for the last one the Indian Freedom
1 The monetary unit was Chinese Yuan in the original report. The average rate of USD to 1 CNY was
0.13574 in December, 2007.
2
India is located in the WHO South-East Asia Region.
20
Struggle lasting from 1857 to 1947. After a long and tough struggle named a
non-violent resistance for independence the colony by the United Kingdom was
terminated and India became an independent nation in the year 1947 [29]. At the
same time, a planned economy system based on the mixed economy was established
to relatively balance the relation among different interest groups through controlling
of industry by the central government. This system met the needs of various features
of different social classes and had worked well as it successfully stimulated the
economic progress till the 90’s in twenties century.
Afterwards, shortcomings appeared gradually to slow and even impede the further
progress, which pushed the Indian government to abolish the planned economy
system and adjust the policies to eliminate the barriers, so that new free market
principles were initiated in 1990 [30]. Due to the economy transformation, the
population below the poverty line became smaller as the economies grow. However,
India faced a similar situation in China that the gap in socioeconomic development
between urban and rural areas was larger and larger, and the income of different
groups increased in a significant non-proportional way, resulting in a serious inequity
in wealth and social resources. A marked difference exists in allocation of health care
resources and the skills of health workers and the level of medical equipment in rural
areas could not compare with that in urban areas.
In Figure 2, the situation could be illustrated obviously in a set of data collected every
five years about the coverage of population using improved water and sanitation.
From 1990 to 2010, for rural areas the percentages of population using improved
drinking-water sources rose from about 65% to 75% and that using improved
sanitation facilities rose from no more than 10% to about 15%. As above the numbers
for urban areas are respectively from 90% to 95% and from 45% to 50%. Though the
numbers increase at a higher rate in rural than in urban areas, there is still a big gap
between the two groups [13, 26]. Comparatively, in the early 90s, the situation of
improved drinking-water sources in China was not better than India, even with wider
gap between urban and rural areas. In urban area the percentage has almost been
100% from 1990 to 2010, meanwhile the coverage in rural area was in a low level and
has been improved well, from less than 60% to about 80%. For the improved
sanitation facilities, the difference between urban and rural areas is smaller than
India, due to the relatively higher percentage of rural residents. In a word the same
trend as in India is that the coverage of improved drinking-water and sanitation
facilities is both increasing in the two decade years [13].
21
Places of residents:
Urban
Rural
Total
Figure 2 Population using improved water and sanitation in India (above) and China (below)
Under this circumstance, the Indian government also made a special Three Tier
system – the Rural Healthcare System, to solve the problem that it is too hard for
rural residents to seek health care services and reduce or eliminate the inequality and
inequity between different regions.
4.2.2 Rural Healthcare System – A Three Tier System in India
After the independence of India colonized by the United Kingdom, a western model
of health care system had been applied following the history of the colonial period. In
this institutionalized western model, the power was centralized by the top level and
all the policies were implemented from top to down; thus the policy makers in the
central government could barely concern what the population at the bottom of the
society really lacked and needed. That was easily resulting in unfairness between
people living in different classes in the society, reflecting in treating people as objects
rather than subjects [31]. Since India is a country with an absolute majority
population in poor rural areas which was no less than 71% [26], this kind of selective
system has caused a majority of the whole population neglected by the policy makers
22
and living without a necessary secure health condition. Therefore, abolishing the
backward system which was very inappropriate for India’s situation and establishing
a new one became an imperative issue for the country.
Furthermore, the inequity between urban and rural areas has been a long lasting
social problem. In order to stimulate and make the social production recovered from
the colonial period, the Indian government put more efforts in the economic
development, but ignoring the basic structure for people’s education, health care and
the living condition. The increases of the income for workers in urban and rural areas
were not proportional markedly. Although as the economy grew rapidly the number
of the people living under the poverty line became a little smaller, the way of focusing
only on boosting the economic development led to a much wider gap in each aspect
such as education and health care between urban and rural areas, which would push
the country as a whole into a worse imbalance. So the Indian government had to
concern more with the rural situation and reduce the differences for the balance of
the entire society.
What is different from China is that the top official organization of health in China is
the Ministry of Health and that in India is the Ministry of Health & Family Welfare.
Most documents and regulations are released by them. When the Indian government
intended to run a universal healthcare system to ensure the entire population could
afford the basic health care services, the Ministry of Health & Family Welfare
established and maintained the healthcare system. Out of the whole health care
system covering the entire country, the government established a special “three tier
system” in India as a Rural Healthcare System (RHS) in the early 80s in 20th century,
with the most important official document in health sector in India – the National
Health Policy”, which was firstly endorsed in 1983 and updated years later in 2002
[32]. As the name “three tier system” implies, similar as China as well, there are three
levels for the rural health care services structure and they are Sub-Centers (SCs),
Primary Health Centers (PHCs) and Community Health Centers (CHCs) from the
bottom level to the top level. Upper levels of health centers take charge of larger
populations. Here is the table to show the scales of different health centers at
different levels. Due to different conditions of geographical environment, the
numbers are distinct on one level of healthcare centers, as the two columns below
plain areas and hilly or tribal areas.
23
Table 4 Structure at three tiers in Rural Healthcare System in India
Population Norms
Centers
Staff
Plain Area
Sub-centers
Primary Health
Centers
Community Health
Centers
Referral unit
Beds
Hilly/Trib
for
lower-level
al Area
5,000
3,000
3
--
--
30,000
20,000
15
4-6
6
120,000
80,000
25
30
4
The first tier sub-center (SC) is the most peripheral health center, which is staffed
with only three persons, one female health worker, one male health worker and a
voluntary worker. Every six sub-centers are under supervision of a certain lady health
worker. Each sub-center will take care of 5,000 and 3,000 rural populations
respectively in plain areas and hilly or tribal areas as the tale showing above [32]. The
sub-centers have two main duties. The first one is the communication work like
assigning tasks. The second one is providing healthcare services and some basic
drugs. All the services provided by the sub-center relate to the basic health needs,
such as immunization, nutrition, maternal health, communicable diseases control
and so on. Compared with the primary health center and the community health
center, the sub-center is only responsible for the healthcare services about the most
basic and essential needs, but not about the very complex diseases to be diagnosed
and cured, due to the limited resources of health workers and techniques [32].
The second tier is the primary health center (PHC). Some primary health centers are
originated from the upgraded rural dispensaries. It is in charge of the state
governments. Every primary health center ought to be a referral unit and a supervisor
for six sub-centers and cover the populations of 30,000 in plain areas and 20,000 in
hilly areas [32]. The primary health center has much more workers and equipment
than the first tier the sub-center, with one medical officer and another 14 skilled
health workers in various aspects, and 4 to 6 beds. It functions to provide preventive,
promotive and curative healthcare services, instead of essential health needs, for
which it is at an advanced level compared with the sub-center. But it is only able to
deal with the diseases not so serious. For those who are very ill or need the
hospitalized treatment, they will be referred to the community health centers or even
upper-levels of health centers and hospitals that are not belonging to the structure of
the Rural Healthcare System [32].
The third tier is the community health center (CHC). As the top level of health center
in Rural Healthcare System, every community health center covers 120,000 and
80,000 populations respectively in plain areas and hilly or tribal areas, with 30 beds
24
for patients and a total of 25 workers [32]. Among these workers, there are four
medical officers, who are specially trained in Surgeon, Obstetrician, Physician and
Pediatrician each and one of them also should be qualified in Public Health. The basic
specialty healthcare services are able to be provided as the four skilled medical
specialists could offer. Similar as the primary health center for the sub-center, the
community health center acts as a referral unit for four primary health centers. If
patients in rural areas could not be cured in the community health centers, they will
be referred to the sub-divisional level health centers or even upper ones like district
level or regional level [32].
The three tiers of health centers play different roles in Rural Healthcare System to
provide health care services to rural people. The clarification of the definitions and
targets makes a good division of work since health centers on every level would
clearly understand their own duties and tasks. Till March 2007, under the Rural
Healthcare System, the total number of the sub-centers reached to 145,272, the
number of primary health centers was 22,370 and for the community health centers
there were 4,045 [33]. Moreover, in order to strength the Rural Healthcare System
and provide the accessible, affordable, accountable and effective primary health care
for the very poor population, in 2005 the Indian government carried out a plan of
National Rural Health Mission (NRHM) through a serious of policies [33].
4.2.3 Financing Mechanism and Payment under RHS
The Indian government aims to establish a universal healthcare system, especially for
the poor rural areas, where there is about 71% population out of the total number in
this country [26]. It implies that the government should have played an important
role in issues related to financing, to ensure the healthcare system covering the whole
population, at least in public health expenditure. In fact, the disparity between urban
and rural areas apparently exists. Except that the healthcare system structure is
distinct, the investment of resources in urban and rural areas becomes a critical
factor. Since the government has much more input in urban area and has neglected
the rural area historically, the overall situation in urban area bears comparison with
the average level of developed countries, whereas the situation in rural area is almost
one of the worst in the world.
Theoretically, there are various methods of financing a healthcare system coexist,
such as government revenue, insurance, donors from inner or outside organizations
and out-of –pocket money and so on. In India’s three-tier Rural Healthcare System,
the official financing mechanism is run through the government subsidies from both
the central level and the state level and people’s out-of-pocket payment. The central
and state governments are both responsible for a proportion to finance the Rural
Healthcare System through the government budgetary allocation. The funds are
managed at the district level and allocated to different tiers within the Rural
25
Healthcare System. There are no fixed amounts and proportions for the central
government and the state governments. In fact, the state governments invest much
more than the central government and make the principal contribution as a
government stakeholder, only with some supplementary input from the central
budgetary allocation.
The latest data from the World Health Statistics in 2010 about the expenditures on
health shows the total expenditure on health as a percentage out of the Gross
Domestic Product (GDP) was 4.1%, out of which the general government expenditure
on health as a percentage of total expenditure on health was 26.3% in 2007.
Compared with 4.4%, the total expenditure on health as a percentage out of GDP had
declined; meanwhile, the general government expenditure on health of the total
expenditure on health increased a little from 24.5% to 26.3% [2]. In respect to the
difference of contributions by the central government and state governments, the pie
chart below illustrates the significant difference. Among the total funds by
governments at all levels, the central government provided only 15%; the rest of 85%
was coming from the state governments [33]. Besides the allocation from the central
government and state governments, the rest of the payment is coming as user-fees
from people’s out-of-pocket money. This portion of payment is not pre-payment so
that the amount of money is not fixed and varies depending on different types of
health care services and different levels of health centers.
In addition, according to the “Report of the committee for finalizing financial
guidelines and framework for delegation of administrative and financial powers
under National Rural Health Mission” which was released in March 2007 [34], the
specific grants of health related programmes are introduced for three tiers of the RHS.
But there are only two levels of management of funds at the three tiers and the CHC
and PHC are at the same level in aspect of funds management. For CHC/PHC level,
the Block Medical Officer (BMO) and Medical Officers (MO) are responsible for the
management of funds [34]. They will have a separate bank account especially to keep
the funds for regular programmes, like training of community health workers,
support for school health programmes, and so on. Another management of funds is
for the tier of sub-centers. Types of funds like Annual Maintenance Grant of 223
US$ 1 and the United Grant of 223 US$ every year will be received in the prescribed
bank account at the sub-center level. [34]
Although the current financing mechanism for India’s Rural Healthcare System is in
a very simple way and lack of diversity in methods, in the National Rural Health
Mission, which is the most important guideline for improvement of the Rural
Healthcare System, several plans of action have been put forward. One of them is in
regard to the financing mechanism. Risk pooling for hospital care is envisaged in the
new financing mechanism. Setting the district level as unit, regulations like way of
reimbursement, standardization of services and periodical payment in a district
The monetary unit was Indian Rupee in the original report. The average rate of USD to 1 INR was
0.0223007 in May, 2011.
1
26
health accounting system may be considered in the new action [34].
In India there has a large amount of people who need treatment for basic diseases
like malaria, leprosy and polio. According to a study in Rural Medical College on the
expenditure pattern of families living in rural areas in 2002, there were 70% of the
families who spent 60% of their annual income on health. Out of the total amount
expenditure on health there was 93% used on the curative and emergency care,
because the poor rural people would not go to see a doctor due to the poverty and
high costs for health care services, until they became seriously ill [31]. But usually it
would be too late to seek the medical treatment. As a result, the health condition of
rural population was getting worse and worse as they did not seek health care in time.
As a universal health system aiming to cover the whole population with the basic
health care services, especially for the poor rural population, when considering how
to pay for these health care services, the government put the main inputs in the
preventive and promotive health services, instead of more serious curative illnesses.
Under the RHS, the three levels of health centers will provide primary health care
including preventive and promotive health care, immunization, pregnancy, child
birth, postnatal care and other health care for basic diseases to rural population for
free. Rural people seeking for these types of health care services do not need to pay
for the registration, diagnostic investigations, in-hospital care, medical treatment and
emergency without drugs, and only most essential drugs selected are free of charge. If
people get grave illnesses and operations are required, they could only pay 5% of the
total costs, the rest paid by the government financial allocation. As a result of the
limited health resources and relatively lower-level skills, some specialized health care
or equipment and techniques are required for complicated illnesses. In this situation
patients could be referred to higher-level health centers or hospitals like district
hospitals outside the rural three-tier structure. For those who are living below the
poverty line, the government will cover all the costs for them.
Except for these types of health care services, people have to pay by themselves using
out-of-pocket money. In rural India few people have the real knowledge about
insurance even have negative attitude to that; on the other hand, the insurance
coverage all over the country is extremely low and they almost cover the rich
population in urban areas, leading to the reality of lacking appropriate medical
insurance in rural areas. This is one of the huge differences from China as in the
NRCMCS in Rural China; the core element is just the co-operative scheme, which acts
as a social insurance pooling risk and contributions to finance this health system. As
mentioned above the NRHM has planned some actions including a new financing
mechanism with risk pooling in the future.
27
Discussion
5.1 Comparability in the two countries
Before conducting a comparative analysis, one of the most important issues is to
assess whether the topic is comparable in two or more different settings. Without
comparability the study would turn out to be pointless and unpractical. Considering
the comparability issue, both backgrounds and actual conditions are necessary to be
evaluated. In terms of China and India, these two Asian countries have resemblances
on geographical, demographical, historic, cultural and socio-economic conditions.
Firstly, before the independence of the nation, China and India were colonized in
varying degrees by developed countries and struggling for independence so that they
have been influenced similarly in every aspect. Secondly, the two countries have the
largest two populations in the world and the majority of the populations are living in
poor and backward rural areas. Thirdly, although the socio-economic situation in
China is better than that in India, they are both developing countries, with a quite
wide gap between urban and rural areas causing the disparities and an uneven
development. Finally, as a result of these factors above, the two countries have
established separate health care systems in the rural areas rather than having a
general system for the whole country. All these factors made it reasonable to compare
the two countries.
5.2 Juxtaposition and comparison
On the basis of the results by describing and interpreting the two settings and related
to rural health systems in aspects of health service structure, financing mechanism
and payment structure in China and India, the main findings were discussed using
the last two steps of comparative pedagogy - juxtaposition and comparison. Through
juxtaposing all the objects or factors of the two countries and health systems in
certain categories, similarities and differences were found out to be analyzed.
Firstly some statistics about the demography and socio-economy in two countries are
compared in Table 5, including the total population, rural population, the GNI per
capita and the population under poverty line. Then in Table 6 it showed the
expenditures in health from the government. The two tables conclude important
statistics for a simple overview of China and India. As discussed in the comparability
above, to some extent it is reasonable to compare the two developing countries.
However there is still difference between the two different settings, since there are no
absolutely same situations. For example in Table 5, due to the different population
and socio-economy, it is not reasonable to compare the total GNI or the absolute
numbers of the under-poverty-line people. Instead, the indicators on GNI per capita
and proportions of under-poverty-line are more suitable for the comparison.
28
Table 5 Statistics on indicators of demography and socio-economy in China and India in 2008
Gross National
Population
Total population
living in rural
areas (%)
Income per
capita (PPP int.
$)
Population
living on < $ 1
(PPP int. $) a
day (%)
(2000-2007)
China
1 344 920 000
57
6 020
15.9
India
1 181 412 000
71
2 960
41.6
The WHO published the “World Health Statistics 2010”, including demographic and
socio-economic data in 2008 [2]. China and India are the two most populous
countries in the world. The annual population growth rate is higher in India than that
in China, 1.6% vs. 0.7%. The population living in rural areas in India is 71% which is
also higher than in China where this proportion is 57% [2]. The proportion of the
population living in rural or urban areas to some extent reflects the urbanization and
industrialization that is the path for the developing countries progress onto
developed countries. Correspondingly, the Gross National Income per capita in China
is two times higher than that in India. According to the statistics from 2000 to 2007,
the percentage of population whose living cost is below the poverty line 1 US$ one
day in China 15.9% with 2.6 times lower than 41.6% in India [2]. This situation on
socio-economy in China is apparently better than India.
Table 6 Health expenditures in China and India in 2007
Per capita total
expenditure on
health (PPP int. $)
Per capita
General government
government
expenditure on health
expenditure on
as % of total expenditure
health (PPP int. $)
on health
China
233
104
44.7
India
109
29
26.2
29
Reviewing the data of health expenditures in the two countries, it shows the
expenditure on health in China is higher than India, as the per capita total
expenditures on health in both countries are respectively 233 vs. 109. The rural
health systems in these two countries are mainly depending on the support by
government, especially on financing part due to the extreme poverty of rural people.
The contribution made by government is higher in China than that in India. It is
reasonable that the Chinese government has invested much more than India due to
relatively better socio-economic situation and smaller proportion of population living
under poverty line.
In this backdrop, the rural health systems in these two countries have similarities and
differences. From the macro perspective of the structure of the rural health system
and the micro perspective focusing on how to finance the system and pay for health
care services under the systems, these similarities and differences are juxtaposed and
listed in Table 7 below. In general there are many similarities between the two rural
health systems in China and India. For instance, both systems have separate health
systems for rural areas on the basis of special socio-economic situations and the wide
gap between urban and rural areas. That means that the common health system in
urban areas or the universal health systems for entire the population in countries
where differences between urban and rural areas are not so great are not suitable for
rural settings. The governments of India and China have established a special
separate rural health system accordingly. Another big similarity is the structure of the
systems. There are three levels/tiers of health centers/hospitals under the system,
with similar functions at each level; whereas the capacity and scales at each level
between two countries are not exactly the same. For the lack of data of staff and beds,
in the table 7 only population coverage is listed. At the middle level of health centers,
one in China is township health center and one in India is primary health centers, the
numbers of population served are similar; and they both provide primary health care
and a few curative illnesses. At the lower and higher levels of health centers, the
population is larger in India than that in China. Functions at the two levels between
two countries are similar as well, for most basic primary health care only and
essential drugs at the lower level and for health care of various illnesses with beds at
higher level. But health centers at higher level in China seems more advanced as
county hospitals than that in India, which is considered as a community health center
covering much less populations compared with county hospitals in China.
Focusing on specific points like financing and payment, the differences between two
countries are significant. First to compare the financing part, although the rural
health systems both have two main stakeholders as the source of expense: public or
government investment and patient’s out-of-pocket money, there are totally different
financing mechanisms applied to raise the money without private insurance. In China
a fairly comprehensive social insurance named the NRCMS has been designed and
run by the government, pooling risk and premium contributions as the funds to
finance the system; meanwhile each individual farmer will pay a fixed but very small
amount of premium annually. In India it is different for people need not pay any
30
pre-paid fees and some grants coming from health related programmes and activities
by the NRHM would help with financing the system [33].
Table 7 Structure, financing, payment under the rural health system in juxtaposition and
comparison
Structure
Similarity
China
India
(NRCMCS)
(RHS)
- Separate system rather than general system for the whole
country;
- Three-level/tier of health centers;
- State-owned
Difference
Population coverage:
Population coverage:
1 000,
3 000 - 5 000,
10 000 - 30 000,
20 000 - 30 000,
20 000 - 60 000
80 000 - 120 000
(Lack of data about numbers
of staff and beds)
Financing
Similarity
- Governments’ investment;
- Patients’ out-of-pocket money;
- No private insurance involved
Difference
- Social insurance
- No pre-paid expenses;
mechanism by NRCMS;
- Grants from regular
- Pooled premium from
programmes by NRHM
individual farmers
Payment
Similarity
Part of payment by government (to different extent)
Difference
- Pre-paid premium by
- Free for patients for almost
patients;
all health care services;
- Patients paying fixed
- Patients with serious
deductibles and the amount
illnesses paying 5% for
over ceilings;
in-hospital care;
- Amount between
- In-hospital costs totally
deductibles and ceilings paid
waived for people living under
from pooling;
poverty line;
- No absolutely free health
- Selected essential drugs
care
free
In respect to how to pay the health care under the rural health system, each country
has their methods and rules influenced by the financing mechanism. In India the
most important principle is all the primary health care and most essential drugs are
free of charge to people. Only for some serious illnesses requiring in-hospital care or
operations, should people pay 5% of the costs by themselves as out-of-pocket money;
meanwhile China does not have this ”free-policy” for rural population. If people who
need in-hospital care or operations are living under the poverty line, even this part of
costs could be waived. As in China’s NRCMCS a social insurance goes well, when
farmers need health care services, they will not worry about the fees since the amount
31
between the deductibles and ceilings are covered by the pooled contributions from
governments and individuals. This payment structure succeeds also because of its
appropriate amount of deductibles and ceilings; the former is not so large that people
cannot afford and latter is enough for most health care services. Besides, this
payment structure more concerns with inpatient care and even in few provinces of
China outpatient care has not yet been covered by the social insurance; in India the
government covers all the costs except for the in-hospital or inpatient care.
5.3 Conclusion
According to the table 5 and table 6 in the results part, it is easy to find out that the
socio-economic situation varies, the overview of the setting is better in China than in
India, and the same situation in the investments from the government on health
expenditure. The Chinese government is more able to finance the rural health system
through the financial allocation.
In respect to the specific issues under the system, there is a comprehensive social
insurance scheme in rural China, pooling risk and contributions for potential
demands of health care, with standards of pre-paid premium and reimbursement
structure; while in rural India there is no special system for financing and the
government in general pays all the costs for primary health care and also for
in-hospital or operation care of poor people living under the poverty line. Here may
be two main considerable influencing factors. One is economic conditions that rural
people’s income in India is quite low and it is not easy for them to afford to pay for
health services. The other is the overall living conditions and health conditions are
much worse in India than in China according to the some indicators on health from
the description and sanitation from the Figure 2 in former section. So the
government has to pay almost all the costs for rural people to ensure that the primary
health care is accessible and affordable and improves the health of the population.
But in China the overall health condition has improved a lot and it is affordable for
most rural people seeking the primary health care; as a result, the government
decided to use the majority of the pooled contributions on in-hospital care rather
than out-patient care. Besides, the method of pooling risk and contributions could
maximum the available financial resources from individuals without increasing the
economic burden since the amount of contributions for individuals is very small.
In fact the two different rural health systems work well and they have indeed solved
some difficult problems, such as accessibility of health care to the rural poor, largely
increasing the coverage of primary health care to population, improvement of health
conditions and so on. The systems and corresponding policies and regulations have
been progressing and much improved. However, drawbacks and weaknesses also
exist along with the strengths and advantages.
For instance in China, the amount of premium for individual is very small, but when
paying for the health care, the fixed ceilings would still be an obstacle to some very
32
poor farmers. Especially facing the deadly diseases like cancers that require in India
long-term treatment, - the fees for treatment above the ceiling line will still be very
expensive which are even unaffordable also for many urban people. In addition, in
previous years the government only concerned about in-patient care so the NRCMS
did not cover any of the out-patient care. As the out-patient care is more common but
the serious in-hospital care is relatively rare for people, recently more attention has
been paid on out-patient care and a small proportion of pooled contributions are
used to reimburse for the expense caused by out-patient care; whereas it is still not
enough to drive the positive attitude of farmers for timely diagnosis inspection and
treatment for the illnesses which have no needs in requiring the in-hospital care.
Comparatively, some lessons may be draw from the practice of India. Specifically,
distinctions of standards for the deductibles and ceilings depend on different levels of
income of rural farmers. That means, for the group of extremely poor living under the
poverty line or other specific levels stipulated, the level of deductible could be lower
and the level of ceilings could be higher, even all the costs waived for most of the
illnesses. For the group of richer farmers with higher income, the proportion which is
paid by farmers may be a little higher for extra services like single patient room or
better living facilities. Under the condition that the governments allocate a larger part
of the pre-paid premiums and that individuals pay different amounts of fees
depending on their income, it would not cause financing problems like deficit in the
new rural co-operative medical scheme.
One serious difficulty in India’s rural health system appears to be the financial
problems. Even though the Indian government has implemented a successful
universal free health system for rural population that is usually working only in
developing countries; there are still troubles in financing the system. The paucity of
government’s investment and the difficult fiscal condition of the state governments
push the financing mechanism of RHS at a very hard position. Since the health care
services, most of which are basic or primary health care, provided at the three tiers of
health centers under the RHS depend solely on the governments’ financial allocation.
Meanwhile, most of these health care services are free of charge for the rural
population, the governments both at central and state levels have to invest a huge
amount of money. To figure out how to cover the necessary costs of health care using
the limited financial resources, the governments must increase the investment on
health, which needs more revenue to balance the governments’ budget on every
public sector. On one hand, based on the universal free health system, small
reasonable user-fees could be tried on those health care services other than the most
basic health care, depending on the financial condition of each patient. In addition,
various types of services besides the medical treatment could be offered to certain
groups of population who can afford it. On the other hand, more ways of financing
may be explored. As many international non-profit organizations often fund regular
programmes and activities, the RHS could also try to collect donors from external
stakeholders, like private companies concerned with public issues. Otherwise, one
important envision is to formulate a new financing mechanism. These envision has
already been on the agenda as a future action in the NRHM [34]. Risk pooling,
33
reimbursement, standardization of health care and other specific regulations have
been envisaged.
Every issue should be looked upon on both sides. Through the full comparison
between the NRCMCS and RHS in China and India, both provide new insights and
different perspectives to learn from each other’s experiences. Based on their own
rural health systems, any specific practical or feasible strong point may be tried to
apply in the own settings for improvement.
34
Limitations
This thesis was based on a literature review. In the process of searching, reading,
filtering, collecting and analyzing literature, there were inevitably weaknesses and
limitations for the study itself.
The first one was in the process of literature searching. In the method part, the key
words were mentioned as “rural health system”, “China”, “India” and “comparative
study”. In fact, the more combinations of these words would help searching for much
more literature, among which some would have been useful and suitable in this study.
This limitation in literature searching might result in other weakness for the study.
In the result part, for the description of China’s rural health system, there was no
official document or report to introduce a full structure of the health care service such
as the health care center and the staff in rural area after searching the published
literature in the websites of the government of China and the Ministry of Health. The
information in this thesis about the rural health system was from a published thesis
and journal articles by researchers and other non-government websites.
Information of financing in India’s rural health system was another limitation. They
have a lot of official literature for the structure of rural health system, policies,
regulations and plans, but did not publish any documents or reports about the
financing in health, like the comprehensive financing structure for the rural health
system.
When discussing interventions or systems, it often evaluates whether the
implemented interventions or systems work effectively or not. In the thesis, it would
be better if the effectiveness was compared between the two rural health systems. But
it is very difficult to do evaluations for the whole systems without sufficient time,
human and financial resources.
Further, there are some related questions of interest to investigate but could not be
discussed in this study. For example, the Chinese government invests financially
much more than India; meanwhile the Indian government provided a universal free
health system in rural areas and the Chinese government did not. From the overview
of the two countries, the results in health status were better in China than in India.
This sharp contrast should be discussed in future studies.
35
Acknowledgements
I would like to express my sincere gratitude to a number of people who have directly
or indirectly contributed to the work of this thesis and contributed during my
two-year study at the Department of Public Health and Clinical Medicine, Umeå
University.
Thanks to my supervisor Kjerstin Dahlblom, for her timely meetings, discussions,
and emails, for her constructive suggestions, and also for her enthusiasm and
patience. Thanks to Lennarth Nyström as the moderator during the master seminar,
with his suggestions for revising my thesis.
Thanks to all the staff of the department, for their support in academic,
administrative activities during the two years.
Thanks to Professor Shen Xiao and Professor Feng Xianwei from my undergraduate
university Wuhan University, for their help on data collection and valuable
suggestions to my work.
Thanks to my friend Shufen Cao and my senior Jinhai Huo for advices in my personal
and academic life respectively. Thanks to all the classmates at 2009-2011 Umeå
International School of Public Health and my dearest friends in China for every
shared joyful moment.
Thanks to my parents for their endless inspiration and my boyfriend Wubin for his
care and tasty meals during my thesis work, for the love and support.
None of this would be possible without you. Thank you all.
36
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