TW: Fistful of Euros is a good place to track European economics but occasionally they pull in some rest of world analysis as well. Wags like to describe China as the most "capitalist" country in the world, in some ways they may be right. But as I like to say, pure anything (i.e. capitalism, democracy etc.) can be tricky. Some food for thought for those advocating pure "free market" approaches. I repeat- health care is not a normal good.
From Fistful Of Euros:
"...In the 1970s, China had a cooperative medical system that provided coverage to 90 percent of the rural population. A series of reforms since then have introduced fee for service and health insurance schemes. These reforms have increased costs, but it is hard to see much impact on improved levels of health. Per capita health spending increased seven-fold in rural areas over the period 1990-2002, but rates of progress in health outcomes have dramatically slowed.
That’s in part because the quality of care provided can be pretty grim, not least because of the incentives of the fee for service model. Over-prescription of drugs is a particularly big problem. In 1999, a study of eight village clinics in Chongquing and Gansu provinces found less than 0.06% of prescriptions handed out were deemed reasonable by the doctors in the survey team.
China isn’t the United States, of course. But it does provide stark evidence that health care reform can have a dramatic impact on the efficiency of provision –for good or ill."
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