Health Care Reform Is Never Easy

From Economist:
"...Two documents...set out reform targets through to 2020 as well as more specific objectives for the next three years...Officials say [millions]...have no insurance now. But by...2020...[the goal] is to have a “relatively robust” government-financed health-insurance system, with more than 90% of citizens covered by 2011.

...The government admits that achieving its goal of building a “safe, effective, convenient and affordable” health service will not be easy. For much of the past two decades, many...lament, the trend has been in the opposite direction. Health-care provision, once rudimentary but accessible and widely admired by other developing countries, has been turned into a profit-driven system notorious for its corruption, indifference and expense.

...Even amid the global economic crisis, the government has appeared in no hurry.

...A big objective of the reforms is to break the dependence of government-owned hospitals on the payments exacted from patients for tests, medicine and other treatments. Government subsidies account for a tiny amount of hospitals’ revenue. Reports in the state-run press say more than 90% of their income comes from charges (poorly regulated and often excessive) for providing services and medicine. Weaning hospitals and doctors off these sources of funds will be a colossal task.

...The government’s plan is to publish a list this month of essential medicines. Over the next three years, government-run medical facilities will be required to give preference to drugs on this list and profits made on them by health-care providers will be phased out. They will receive extra subsidies to make up for their losses. But hospitals have often profited from illegal mark-ups on medicine and from commissions from manufacturers on the sales of their drugs. The new subsidies are unlikely to take this into account, so hospitals could see their revenues shrink. Hospitals have also proved adept in the past at evading price controls on particular drugs by prescribing other medicines or unnecessary extra tests and treatments.

...Another big obstacle to reform could be a lack of enthusiasm among local governments...officials say only 40% will come from the [federal] government..."

TW: I found this article interesting as it could fairly easily have been written about the U.S. In fact it is about China. The incentives, aligned and perverted, exist everywhere.
http://www.economist.com/world/asia/displaystory.cfm?story_id=13496687