Does Rapid and Sustained Economic Growth Lead to Convergence in Health Resources: The Case of China From 1980 to 2010

Liang, Di; Zhang, Donglan; Huang, Jiayan; Schweitzer, Stuart

The underlying drivers of resource distribution in China during the past 30 years are both market forces and government power. In China, health care is mainly financed by government investment, public health insurances, and outof-pocket fees. The majority of government investments are from local government, rather than central government. The scale of resource input largely depends on local economic conditions. 20 Public health insurance funds are also localized. However, provinces in China have had unequal economic development since 1980s, resulting in an uneven local financial capacity to pay for health services. For the indicator of beds/1000, the trends of sigma divergence in 1980s and 1990s could probably be explained by the imbalanced economic development among provinces. However, the obvious sigma convergence after 2000 probably represented the input from central government. The 2000 World Health Organization report on health system performance and the 2003 severe acute respiratory syndrome crisis pushed the central government to allocate resources toward public health services and health equity issues. Since then, the central government has expanded resource input dramatically to less developed areas in Central China and Western China to build and expand primary hospitals and public health facilities. 21 Such enormous investment from central government and local government might contribute to the sigma convergence of structure indicators as well as beta convergence in procedure and outcome indicators in recent years. For instance, China's New Cooperative Medical Scheme, a large government subsidized health insurance plan, has improved finances of township health centers since the start of its pilot program in 2003. 22 Moreover, in 2009, the Chinese government implemented an ambitious health reform that is aimed to build up basic health services system for all. 23 The success of these re-distributive measures on physicians per capita seems be more ambiguous than measured focused on beds.