08/10/2012 02:27 pm ET Updated Oct 10, 2012

A Healthy China Is an Essential for Global Prosperity

In the last few years I have had the privilege of meeting thousands of professionals in hundreds of different health organisations in over 36 countries and in terms of sheer scale, the changes in China are the largest series of health reforms that I have seen anywhere in the world. Some of the improvements, especially with regard to universal access, have achieved substantial success. The percentage of the country's population covered by various social health insurance schemes increased significantly from 2003 to 87% in 2008 and 96% in 2011, according to the World Health Organisation. These changes are likely to have taken about half a billion extra people into healthcare cover - an epic achievement.

However, although insurance coverage is broad, it is not particularly deep. In fact, some commentators believe that patients still have to bear more than 50% of care costs. Spending just 5.06% of its GDP on health in 2010, according to World Bank economic indicators, China has been playing catch-up over recent years (average life expectancy at birth of 73 in 2010, according to the World Bank). The share of public expenditure of total healthcare costs increased from 39% in 2005 to 54% in 2010 (similar levels to government expenditure on health in the USA). Private spending accounted for the remaining amount, with a staggering 80% of this latter total coming from out-of-pocket payments.

World Bank figures also suggest that private insurance across China only accounts for a meagre 3% of total healthcare spending (China has not granted licenses to foreign private health insurers from entering the market). Individuals can be placed under disastrous financial pressure during times of ill-health. In fact, World Health Organisation surveys show that the incidence of catastrophic medical expenses are significant and an estimated 13% of the population can face financial ruin, or difficulties, due to episodes of ill-health. More generally, it has been estimated that household expenditure on health in China is increasing significantly.

Further, commentators often point to this fact as the reason for the relatively low domestic consumption of goods and services by individuals in China (they save for a rainy day), fuelling further reliance on export led growth. In the long term, it is argued, China will need to re-balance this trend if its growth is to be more sustainable and the fruits of economic growth are to be more 'socially shared'.

The reform of China's public hospitals is the pivotal issue for the control of healthcare expenditure, improvement in care quality and, ultimately, improved access to decent healthcare. In my recent visits to Beijing, Shenzen and Shanghai, it was clear that there is considerable enthusiasm for these reforms although this is tempered by some anxiety over financing levels and management support. For example, some hospital directors wonder whether the government will pick up the bill. Similarly, there is considerable enthusiasm for improved management techniques but a lack of supply of 'know-how'.

I strongly believe that we all have something to teach and something to learn in approaches to the global challenges facing health professionals. Sharing information and examples of good practice will be key to whether the ongoing reforms in China will be judged a success. I have no doubt that China will rise to this challenge with the same determination and focus that has led to its remarkable economic transformation in the last thirty years. It is essential for global health and prosperity that China succeeds.