In China, India, health care burden shifts to poor

Alvin Powell

Harvard News Office

October 12, 2006 4 min read

Ground-level implementation ‘is simply not there’

There is a health care revolution under way affecting more than a third of humanity.

Unfortunately, that revolution means less government support and more out-of-pocket medical expenses for the poor, especially the rural poor, in India and China.

Those two nations, together home to 2.4 billion of the world’s estimated 6.5 billion people, are facing increasing problems with their health care systems. More expensive private care – or fee-for-service care at public facilities – is rising in place of inadequate publicly funded systems, according to Associate Professor of International Health Policy and Economics Winnie Yip and Ajay Mahal, assistant professor of international

health economics at the Harvard School of Public Health (HSPH). On Oct. 4, Yip and Mahal were the speakers in the first talk of a new seminar series examining health care in the two Asian countries.

“By any metric you select, the burden is increasing,” Mahal said. “They [the governments] are spending money for sure. … The big problem in India, and in China as well, is implementation at the ground level. It’s simply not there.”

The event, “Comparing the Performance of Health Systems for Two Economic Giants: China and India,” sponsored by the Asia Center, drew about 40 people to the Center for Government and International Studies.

Yip introduced the subject with an hour-long overview of the systems in the two nations. She said that the seminar series will continue monthly through the year, with different speakers examining aspects of the health care systems of the two Asian giants in greater depth.

The picture drawn by Yip and Mahal is one of two nations in transition, each with a government-financed health system that is struggling to keep up.

China’s communist system guarantees a low level of health care for all through a publicly funded system of clinics and hospitals. India’s system is different, Yip said, with the government funding health care through subsidies to health care facilities that offer low-cost care to patients.

The two nations are similar in many ways, however. Both are struggling through changing times, with large and growing populations in countries that are experiencing considerable economic growth. That economic growth has been uneven, however, and has led to increasing economic disparities in society.

In recent decades, life expectancy has risen, as has the portion of the population that is elderly. This means both health care systems are seeing a shift in the major types of medical conditions they face – from predominantly infectious diseases to chronic illnesses.

Patterns of improving health are linked to increased wealth, Yip said, with the regions in both countries that have experienced the greatest economic growth also experiencing the greatest increases in life expectancy and decreases in the rate of infant mortality.

Both India and China have experienced years of budget constraints, which has limited government health care spending. Spending from all sources, however, has increased rapidly, with much of it coming from out-of-pocket payments from patients.

The increasing financial burden is hitting the poor hard, Yip said, and is pushing some families into poverty. Using a poverty line measure of U.S. $1.08 per day, out-of-pocket health expenditures increased the poverty rate in China to 16.2 percent from 13.7 percent, and in India to 34.8 percent from 31.1 percent.

While the Chinese government has kept costs low for many services, it allows hospitals and providers to raise prices for certain high-tech procedures, like those using modern medical imaging, and to raise prices for drugs. What this has created, Yip said, is an incentive for even small hospitals to invest in the expensive high-tech devices and for doctors to prescribe drugs even for things known to not respond to drug treatment, like the common cold, because they will generate fees from their patients.

“All the growth is happening in the private sector, especially in out-of-pocket spending,” Yip said.

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