Lack of care raises

China's SARS fears
Free-market economic reforms ruined rural health coverage

Jehangir Pocha, Chronicle Foreign Service

Beijing -- On a road in the famed Fragrant Hills west of Beijing, villagers are erecting barriers of sand and rock to prevent outsiders from entering the town.

When a car pulls over briefly, a burly security guard snarls: "Do you want to die?"

The SARS epidemic has created panic in many Chinese villages -- a panic largely rooted in the fact that 90 percent of Chinese in the countryside have no health insurance, and many don't have access to adequate medical care.

"Rural health care facilities in China . . . would not be optimal for a person who comes down with SARS," says Dr. Ray Yip, a senior health officer with UNICEF in China.

Over the past 10 years, market-oriented reforms in China's rural health system have gutted the overall quality of care and forced clinics to raise their fees. As a result, up to 40 percent of people in rural areas, where average household income is just $290 a year, avoid treatment even when faced with a significant medical problem, says Yip.

"Patients don't want to get stuck with underqualified doctors who are going to bleed them for money but not cure their illness," Yip said.

With such concerns in mind, the government is taking draconian measures to keep SARS from spreading outside cities, where it has so far been concentrated.

Throughout China, city governments and employers have been ordered not to fire migrant laborers, who are mostly from rural areas, or send them home. In Beijing, more than 8,000 people have been placed under forced quarantine, and health officials monitor passengers at rail stations and airports.

EMERGENCY AID OFFERED

The government has announced $240 million in emergency aid for rural health care and has even promised to pick up the tab for any person with SARS who can't afford to pay for treatment.

But the statements are treated with skepticism on the streets -- even in urban communities, where about 60 percent have health coverage and the quality of care is better.

"What does it mean that the government will pay for me only 'if I cannot afford it'? Do I have to go bankrupt before they pay for me?" asks Zhou Yu Guang, 46, a taxi driver in Beijing. "If I trust the government and then get SARS, if for some reason they do not carry out their promise, then I can only wait to die."

What rankles Zhou is that China's health insurance system has declined so markedly.

From 1949 to 1989, the government maintained an extensive public health system, with up to 90 percent of the population enjoying coverage. In the villages, China's famous chijiao daifu, or "barefoot doctors," provided basic care through a widespread Rural Cooperative Medical System. Government employees and workers, who then made up the bulk of the urban workforce, were covered by government insurance programs.

Four years ago, Zhou worked for a public sector construction company that provided health insurance for him and his family. But like millions of others, he was laid off and lost his coverage when his company was forced to restructure in the face of China's tough economic reforms.

REFORMS HIT VILLAGES

The reforms, intended to transform China's socialist economy into a market- oriented one, hit villages especially hard.

Health coverage rates have fallen to 10 percent in China's villages, according to estimates by the World Bank and World Health Organization. Most of those still covered now face annual spending caps as well as growing co- payments and deductibles.

In cities, the government has tried to privatize health care by licensing 11 insurance companies to sell managed-care types of plans. But with annual premiums starting at about $300, only a sliver of China's new upper-middle class can afford such plans.

Henk Bekedam, WHO's chief representative in China, says SARS has forced the government to address the shortcomings in its health care system. But others are not so optimistic.

"SARS may bring these problems into sharper relief than before, but these problems are chronic and need to be dealt with as such," says Deepak Bhattasali, the World Bank's top economist in Beijing.

"Economic development goals have trumped investment in health care in most places," says Joan Kaufman, a former health expert with the Ford Foundation in China. "Communities have chosen to invest in roads rather than building better health centers."

China spends $205 per person on health care, or 5.3 percent of its gross domestic product -- slightly greater than the target recommended by the WHO. But Bhattasali says China would have to spend up to 1.5 percent of GDP more on health care to give rural areas reasonable access to care.

However, there are signs that the government is beginning to tackle the problem. The fact that the SARS crisis is already costing China up to a full percentage point in growth -- about $6 billion, according to Bhattasali -- is having a galvanizing effect.

An experiment carried out in Zhenjiang, in Jiangsu Province, is being extended to other regions. It sets up a two-level system. When medical savings account money is exhausted, patients have to pay a deductible of up to 5 percent of their salary. Above that level, all care is financed by a Social Insurance Account supported by a pool of employers.

The World Bank's Bhattasali says that if these moves bear fruit, rural health care could improve substantially, but it would take at least five years to make meaningful headway.

SARS, Kaufman says, has "created a new sort of pressure on China's leaders to be responsive both to their own people's expectations and to the broader world community."