Health Affairs, 23, no. 6 (2004): 222-234 doi: 10.1377/hlthaff.23.6.222 © 2004 by Project HOPE	New Online   Senate Health Reform Bill   Rewarding Providers   Public Option Policy Brief   Health Reform & Abortion   Delivery System Reform

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DataWatch

Public Perceptions Of Private Health Care In Socialist China

Abstract

 
We present the findings of a United Nations Development Programme–World Health Organization study commissioned by China’s Ministry of Health on use of public and private ambulatory care services in three Chinese provinces. We found much unmet medical need (16 percent), attributed mainly to the perceived high cost of care. Seventy-one percent had no health insurance (90 percent in rural and 51 percent in urban areas). For 33 percent, the last consultation was with a private practitioner. Widespread dissatisfaction with public providers (mainly high user fees and poor staff attitudes) is driving patients to seek cheaper but lower-quality care from poorly regulated private providers.

In the cities, meanwhile, existing risk-pooling protection schemes for local government and state-owned enterprise employees floundered as health care costs skyrocketed, aggravated by the rapid diffusion of costly medical technologies and a poor understanding of the inflationary impact of market-based medicine. Despite numerous ad hoc cost containment measures in the 1980s and the introduction of new risk-pooling measures since 1992, serious problems remain.⁴

As early as 1980, the Ministry of Health reviewed the situation and recommended legalizing private medical practice and strictly regulating it. In 1985 the State Council, which is the equivalent of China’s cabinet, directed that private medical practice be encouraged. In 1989 the Ministry of Health allowed public doctors to engage in part-time private medical practice in public health care facilities. However, not until 1999 did nationwide registration and licensing of an estimated 1.9 million medical practitioners commence.⁵ Even today, no one knows what the true extent of private medical practice in China is, much less what the appropriate public-private mix should be.

In 2001 China’s Ministry of Health commissioned a study aimed at gathering information that would "facilitate evidence-based policy making in relation to the development and growth of private medical practice in China." We report here the key findings of that study, aimed at establishing (1) the extent to which patients are using private providers for outpatient health care; (2) the reasons why patients use private outpatient health care; and (3) the attitudes and opinions of patients toward the development of private medical practice.

Study Data And Methods

Top Study Data And Methods Study Results Policy Implications Editor's Notes NOTES

 
Study provinces. The study was carried out in three provinces: Guangdong, Shanxi, and Sichuan, which together comprise one-sixth of the total Chinese population. These provinces were purposively selected for their different stages of economic development. Guangdong (area 177,600 sq. km, population 86 million, gross domestic product, or GDP, per capita U.S.$1,354), situated in the southernmost coastal region of China, has the distinction of being one of two provinces first opened to foreign direct investments in 1980. Its high degree of autonomy has enabled it to surge ahead to become China’s most prosperous province.⁶ Shanxi (area 156,000 sq. km, population 32.9 million, GDP per capita U.S.$612), a landlocked province situated along the middle reaches of the Yellow River in northern China, is noted for its coal and electric power industry and ranks twelfth out of twenty-three provinces in terms of GDP per capita.⁷ Sichuan (area 485,000 sq. km, population 83.2 million, GDP per capita U.S.$527), a largely agricultural province located in the Upper Yangtze Valley in southwestern China, ranks nineteenth among provinces in terms of GDP per capita.

Study sample. For each province, we purposively selected a city (urban) and a county (rural) (Exhibit 1); from each of these, two urban districts and two rural townships were randomly selected. A sample of 150 households was randomly selected from the total number of households within each district or township, in two stages. The first-stage sampling units were residential clusters under the jurisdiction of a residential committee (urban) or a village committee (rural), and the second-stage sampling units were listed households in the residential clusters.

Interview methods. Trained interviewers (medical students) carried out the field work in August 2001, supervised by academic staff of the medical schools in the respective provinces. The head of household (either the father or mother of a nuclear family or, in their absence, any person over age eighteen) was interviewed.⁸ Participation was voluntary, and confidentiality was assured.

A locally contextualized questionnaire was developed in Chinese, containing customized question sets designed to gauge respondents’ health care use preferences, satisfaction levels with providers, and attitudes and opinions toward private medical practice in general. Responses were recorded on a five-point Likert scale (1 = very dissatisfied; 5 = very satisfied).

Twelve focus groups (two rural and two urban in each province, comprising ten to twelve adult residents per group) were conducted in neutral settings, facilitated by professors of public health from the respective provincial universities. Participants were nominated by the respective residential committees, the sole criterion being that they must have consulted a doctor within the past twelve months. The proceedings were hand-recorded and the transcripts analyzed for emerging themes.

In addition, one-on-one interviews were conducted with eight provincial health officials with regulatory responsibilities (three in Guangdong, three in Sichuan, and two in Shanxi).

Data analysis. To ensure the quality of the data, 5 percent of households were reinvestigated by field supervisors. Univariate, bivariate, and multivariate analyses were performed using SPSS for Windows, version 11.0.

Study Results

Top Study Data And Methods Study Results Policy Implications Editor's Notes NOTES

 
A total of 3,730 residents completed the household questionnaire, giving a response rate of 95.6 percent.⁹ Females (55 percent) outnumbered males, with a mean age of 45 years (standard deviation, 15.4 years). Half had at least junior middle school education. Farmers constituted the single largest occupational group (40 percent) and accounted for 78 percent of the rural respondents (Exhibit 2).

Use of health care services. Nearly two-thirds of respondents reported visiting a doctor during the past twelve months, with little difference between urban and rural respondents. Multivariate analysis using a Cox regression model revealed a number of factors to be independently influencing health care use (Exhibit 3). In order of importance, they are self-reported poor health status, richer province, higher income, female, rural residence, and having health insurance.

Attitudes and opinions toward public and private health sectors. More private (50 percent) than public (31 percent) patients expressed satisfaction with the "affordability" of their last clinic encounter. But only 8 percent of respondents agreed or strongly agreed with the statement, "Doctors in private clinics have better skills than doctors in public clinics," while 66 percent disagreed or strongly disagreed with the statement. This was corroborated by the majority view of focus-group participants, according to whom "fake doctors" and "fake drugs" were rampant in the poorly regulated private sector. An interesting decision rule for the common folk, apparently, was as follows: "For minor illness, go to the private doctor; for major illness, better consult the public doctor."

The focus groups generated a list of complaints about public clinics, mostly centering on bad staff attitudes, complicated registration procedures, and lack of responsiveness to patients’ needs. A common complaint concerned overprescription: "The (public) doctor prescribes more drugs for you because their bonus is related to the volume of the drugs they prescribe." Private clinics were praised as being conveniently located and more responsive—for example, offering flexible hours and showing better attitudes toward patients.

Not surprisingly, the private sector outperformed the public sector in the survey of patient satisfaction. Asked about their last encounter with their doctor, private patients gave consistently higher ratings than public patients for eighteen of twenty-one items (Exhibit 7). In particular, more private than public patients said that they would recommend their doctor to relatives and friends. However, only 29 percent of household respondents agreed with the statement: "When I’m sick, I prefer to be seen by a private doctor than a public doctor." Significantly more rural than urban residents agreed with this statement (p < .001). In other words, if there were no access constraints, most would rather consult a public-sector doctor.

View larger version (39K): [in this window] [in a new window]   EXHIBIT 7 Comparison Of Patients’ Satisfaction With Experiences At Public And Private Clinics, In Three Chinese Provinces, 2001

What could explain people’s ambivalence regarding a greater role for private providers? Focus-group participants welcomed competition between public and private providers. But a recurring complaint was about poor government regulation of the private sector, such as, "Some private doctors are not qualified enough to run the clinics but they managed to buy a license"; and "Some private doctors have no ability to cure the disease, but for the sake of making money will keep asking you to come back to them. Meanwhile, the disease becomes worse." An overwhelming majority (92 percent) agreed with the statement: "Private medical practice needs closer monitoring to ensure compliance with regulations."

Regulation of private medical practice. We reviewed thirty-nine documents issued between 1980 and 2001 by the central government and twenty-three documents by the provincial governments (eight in Guangdong, three in Shanxi, and twelve in Sichuan), ranging from licensing of private practitioners to regulation and taxation of private clinics and hospitals. We found that these documents had in fact anticipated many of the problems highlighted above. For example, the Act of Medical Practitioner (1999) prescribes strict qualifying examinations and registration procedures aimed at eliminating unqualified practitioners, while the Detailed Rules and Regulations of Medical Facilities Management (1994) is comprehensive in its prescription of minimum standards, including penalties for noncompliance. The crux of the matter, however, lies with the implementation.

The health officials we interviewed acknowledged awareness of the problems cited but blamed the lack of personnel to monitor or supervise and the lack of "teeth" to punish errant practitioners or clinic owners. Poor coordination was cited as a major stumbling block, since the responsibility for oversight was spread over many vertically structured regulatory agencies. The officials also lamented that overly liberal issuance of licenses had resulted in an intermingling of "good" and "bad" clinics that were virtually indistinguishable to the public. On the whole, they felt that further growth of the private sector was inevitable, but its proper regulation would be a major challenge.

Policy Implications

Top Study Data And Methods Study Results Policy Implications Editor's Notes NOTES

 
Governments everywhere are understandably turning to the private sector, to improve coverage and to stimulate efficiency.¹⁰ But for China, the burgeoning private health sector holds both promise and peril—chief among which, as our study shows, are issues of equitable access, quality of care, and patient safety.

Equitable access. Studies in developing countries have shown that patients’ preferences are influenced by a variety of factors such as cost, quality, convenience, and service attitude of the providers; the final choice is determined by trade-offs between these factors.¹¹ In theory, if the better-off in society who demand and who can afford the more personalized services can have their needs met by the for-profit private sector, public health services can focus on serving the less well-off. But the picture that emerges from our study does not quite fit: In China, publicly provided, state-subsidized health care is actually less affordable than private-sector alternatives. Consumers are forced to choose between technically better but costlier public health care, on the one hand, and cheaper private health care of questionable quality, on the other.

Severe underfunding of public health care facilities (which typically receive a state subsidy of less than 10 percent of operating expenses) appears to be the root cause of the problem.¹² More than two decades of market-based reforms have eroded social safety nets. Before the market reforms, there was a functioning, fully funded health care system serving both rural and urban areas. Now, high user fees imposed by public providers in both rural and urban areas are leaving few options for many people who are uninsured and unable to pay.¹³ Under tremendous pressures to recover their costs, public clinics and hospitals are experiencing perverse incentives to overprescribe medications or overuse investigative procedures for profit. Although this is officially prohibited, poorly paid public-sector doctors are accepting fees or gifts in exchange for better care.¹⁴

Of immediate concern is the extent of unmet medical need: For 16 percent of household survey respondents, the issue was not about choice of providers or even the quality of care, but the ability to enter the health care system at all. If we extrapolate this figure (16 percent) to the entire population of 1.2 billion Chinese, a staggering 208 million would fall into this category.

While serious efforts are under way to reform the country’s ailing health care financing and delivery system, the poor and indigent may not have the luxury of waiting for systemic improvements to trickle down to them.¹⁵ There is thus an urgent need to more specifically and deliberately target subsidies at the poor, so that no one will be denied needed health care because of inability to pay.

Quality and patient safety. The widespread perception of poor-quality care among private providers, as well as concerns expressed about patient safety, should raise alarm bells. The majority blame it on poor government regulation, and rightly so. The unique character of health care as both a social and a private good emphasizes the importance of effective government regulation as a precondition to a properly functioning health care market.¹⁶

Alongside the need to hold providers accountable is the need to fundamentally transform the provider culture. The everyday practice of medicine can be improved, and the doctors hold the key. Our interviews with health officials reveal that professional self-regulation is a policy instrument that is scarcely emphasized. Our own impressions from interviewing and interacting with providers indicate that China badly needs a revitalized, ethos-driven, self-organizing, and self-regulating medical profession, one that is dedicated to raising clinical standards and championing patient quality and safety.¹⁷

Beyond government regulation and professional self-regulation is the need for greater patient empowerment. Health care, after all, is not merely about processes or even outcomes, but ultimately about satisfying human needs. Empowering patients to make more-informed choices would have a positive impact on health outcomes and patient satisfaction.

Study limitations. Given the considerable interprovincial and urban/rural differences we found, a "one size fits all" approach to health policy in a country as huge and diverse as China will not suffice. A limitation of our study is the relatively small sample size, which precludes more detailed subgroup analyses. Nevertheless, we have provided a preliminary evidentiary base for further studies to build on.

As china continues to make the transition from a centrally planned to a market economy, a key policy challenge will be to determine an appropriate regulatory framework to guide the future growth and development of its burgeoning private health care sector. A key lesson it holds for others is that governments need to understand and proactively engage the private sector, to harness its potential while ensuring equitable, high-quality health care for all.

Editor's Notes

Top Study Data And Methods Study Results Policy Implications Editor's Notes NOTES

 
Meng-Kin Lim (coflimmk{at}nus.edu.sg) is an associate professor on the faculty of medicine, Department of Community, Occupational, and Family Medicine, National University of Singapore. Hui Yang is a professor and Tuohong Zhang, Wen Feng, and Zijun Zhou, associate professors, in the Department of Health Policy and Management, School of Public Health, Peking University, in Beijing, People’s Republic of China.

The authors thank the Ministry of Health, China, and the Health Bureaus of Guangdong, Shanxi, and Sichuan Provinces for their permission, support, and cooperation in carrying out this study, which was jointly funded by the United Nations Development Programme and the World Health Organization. Their appreciation goes to Yude Chen of Peking University, who provided inspiration and valuable guidance throughout the project, and to Shaoxian Chen of Guangdong College of Pharmacy, Yi Liu of Sichuan University, and Jianzhong Zheng of Shanxi Medical College, who supervised the field work. The hard work of the medical students from the respective colleges and universities in administering the household questionnaires during their vacation term in August 2001 is gratefully acknowledged. The views expressed in this paper are entirely those of the authors and do not necessarily reflect the views of the Ministry of Health, China; the Provincial Health Bureaus; UNDP; WHO; or the organizations they individually work for.

NOTES

Top Study Data And Methods Study Results Policy Implications Editor's Notes NOTES

 

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8. We originally planned to either interview all adults in the sampled household or a randomly selected adult from each household. However, the local officials whose cooperation was crucial to the success of the project impressed upon us that this was impractical because it meant making multiple home visits, including returning at night, to track down every eligible person. Hence, we adopted the less-than-ideal method of interviewing the head of household or equivalent.
9. Household surveys in China are impossible to carry out without official sanction. Very high response rates are not unusual, as citizens are generally compliant with requests for cooperation from the authorities.
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13. S.L. Tang et al., "Financing Health Services in China: Adapting to Economic Reform," IDS Research Report no. 26 (Brighton, England: IDS, 1994).
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17. M.K. Lim et al., "China’s Evolving Health Care Market: How Doctors Feel and What They Think," Health Policy 69, no. 3 (2004): 329–337.[Medline]

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