What drove the cycles of Chinese health system reforms?

Abstract

Since 1978 when China liberalized its economy and moved from a central planning to a socialistic market economy, its health care system has gone through two major cycles of reform–oscillating from relying on the market to fund and deliver health care, to one in which the government plays a central role in financing health care, prioritizes prevention and primary care, and redistributes resources to poorer and rural regions. Consequently, performance of the Chinese health system improved and China was finally able to extend a basic health safety net to more than 95% of its 1.3 billion people over the last decade. Then, in 2013, China launched its new cycle of reform, and vigorously pushed privatization and marketization as a core strategy to reform its public hospitals. What explains China’s oscillating health policies and performances? This paper examines the thesis that ideologies of the government and the market are the main drivers for the reforms. The social value that undergirds the government actions, especially how much priority it gives to equity vis-a-vis economic growth has exerted a major influence on whether China chooses a pro-government or pro-market approach.