Health Reform in China

I was very surprised when I learned that the healthcare system in China is entirely private.  There is no government provided healthcare.  It’s a huge problem for the people, particularly those in rural areas.  Like in the U.S., the government is trying to solve the problem.  Unlike in the U.S., when they decide to solve a problem, they just solve it.  Sometimes it works, sometimes it doesn’t.  But they don’t debate it for generations, like we have done about healthcare.  Now, don’t get me wrong.  I still like our system better.  But a dictatorship does have its advantages in terms of efficiency.

According to an article in MSN Money, the government of China is planning to spend $124 billion over the next two years to provide health insurance to 90% of its populations.  While that is vastly less expensive than American health reform, healthcare in China is much cheaper.  Still, it does reflect some responsiveness from the government to public demands for more social services.  China also plans to increase investments in education and pensions. 

As noted, the per capita spending will be low ($17 per person), but given the average household income in China, the impact will be large.  As the article notes:

In the first quarter of 2009, according to a nationwide government
survey, the average household in rural China showed an annual income of
$237 at official exchange rates. Rural households average 4.5 people
(or at least they did in 1995, which is the most recent data I could
find). In a household of four people, the new plan would provide an
annual budget of $68 a year. That’s a big percentage on a household
income of $237.

Being an article in the finance section, it gets to the important stuff at the end.

It argues strongly that we should stop concentrating on the
infrastructure and heavy industry and export-company stock plays that
have had such a high profile in China’s recent development.

And that we should start looking, first, at the companies such as Ping An Insurance (PNGAY, news, msgs) or China Medical Technologies (CMED, news, msgs) that will be direct beneficiaries of more government spending on social services.

And here I was feeling good about all those rural farmers who will finally have access to healthcare.  I guess I’m not a good capitalist.