China is scrambling to overhaul its healthcare system, in response to social unrest in Beijing. The current system puts the cost of healthcare out of reach for many working Chinese. These angry patients have responded by violently attacking doctors and medical workers.
In 2010, there were over 17,000 reports of healthcare workers getting threatened, beaten, kidnapped, or killed. Policymakers in China have already tried to cut costs for treatment in public hospitals, but the efforts have done little to assuage the tension and outrage from local citizens. The violence against doctors has become prevalent enough that many doctors now have guards assigned to them while at work.
A few months ago, the Communist Party outlawed a common practice that allowed hospitals to mark drug prices up by 15%. That action has done little to make healthcare more affordable for the majority of Chinese citizens. The average cost of a single visit to the hospital is about the same as a typical worker’s average yearly income. In addition, many drug distributors in China mark drugs up as much as 40% or more which makes the cost of drug treatment completely unattainable for the middle or lower class.
The core of the issue is the fragmentation of China’s healthcare system. There are thousands of distributors and many only service one hospital. The system has worked by creating local tax revenue for the small, localized distributors. They pay a cut of their income to the government and also provide jobs to families. However, it is common that the drugs pass through several distributors, each time being marked up, before they end up at the hospital at a price that is astronomically high. Although the government wants to eliminate this practice, provincial authorities don’t want to give up any tax revenue.
To alleviate the pressure, Beijing is starting to set floor and ceiling prices on the cost of drugs. To keep reading, click here.