Healthcare-financing reforms in transitional society: a Shanghai experience

Since the 1950s, China has had a very wide coverage of healthcare service at the local level. In urban areas, the employment-based healthcare-insurance schemes (Government Insurance Scheme and Labour Insurance Scheme) worked hand in hand with the full employment policy of the Government, which guaranteed basic care for almost every urban resident. However, since the economic reforms of the early 1980s, China's healthcare system has met great challenges. Some came from the reform of the labour system, and other challenges came from the introduction of market forces in the healthcare sector. The new policy of the Chinese Government on the Urban Employees' Basic Health Care Insurance is to introduce a cost-sharing plan in urban China. Like other major social policy changes, this new health policy also has a great impact on the lives of the Chinese people. Affordability has been the major concern among urban residents. Shanghai implemented the cost-sharing healthcare policy in the spring of 2001. It may be too early to assess the pros and cons of the new policy, but evidence shows that the employment-based health-insurance scheme excludes those at high risk and in most need. It is argued that the cost-sharing healthcare system will limit access by some people, especially those who are most vulnerable to the consequences of ill health and those in low-income groups, unless the deductibles vary according to income and unless low-income groups are exempt from paying premiums and deductibles.