TDR/GEN/SEB/04.1 H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H IN CHINA Q. Meng G. Shi H. Yang M. Gonzalez-Block E. Blas In partnership: China Health Economics Institute World Health Organization, China UNICEF/UNDP/World Alliance-HPSR Bank/WHO Special Programme for Research and Training in Tropical Diseases (TDR) TDR/GEN/SEB/04.1 Copyright (C) World Health Organization on behalf of the Special Programme for Research and Training in Tropical Diseases, 2004 All rights reserved. The use of content from this health information product for all non-commercial education, training and information purposes is encouraged, including translation, quotation and reproduction, in any medium, but the content must not be changed and full acknowledgement of the source must be clearly stated. A copy of any resulting product with such content should be sent to TDR, World Health Organization, Avenue Appia, 1211 Geneva 27, Switzerland. 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Blas In partnership: China Health Economics Institute World Health Organization, China UNICEF/UNDP/World Alliance-HPSR Bank/WHO Special Programme for Research and Training in Tropical Diseases (TDR) Contents Terms and abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v Executive summary 1 Background ............................................................................................ vi ........................................................................................................ 1 2 Policy context and challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2.1 The five balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2.2 Health policy - research dialogue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 4 Research needs and systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 4.1 Current research needs to close gaps in knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 4.2 Likely future research needs to close gaps in knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 4.3 Gaps in research capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 4.4 Options for closing the gaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Improving the research-policy dialogue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Contracting-out and commissioning of existing institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Creation of new institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Capacity building for policy and systems researchers and policy-makers . . . . . . . . . . . . . . . . . . . . . . . . . 19 5 Conclusion, strategy and way forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Annex: Directory of health policy research institutions References ......................................... 21 ........................................................................................................ 22 About the authors ............................................................................................. 24 iii H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 3 Research evidence for the 11th Five-year Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 3.1 Globalization and macroeconomic trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 3.2 Population and health status trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 3.3 Economic reform and health care financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Sources of funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Allocative efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.4 Organization and delivery of public health programmes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 3.5 Ownership and governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3.6 Cost containment and regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3.7 Provider performance management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.8 National policies - local implementation strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Terms and abbreviations AIDS Alliance-HPSR CDC Acquired immunodeficiency syndrome Alliance for Health Policy and Systems Research Center for Disease Control, a public health institution with responsibility for disease prevention and control in China CMS Cooperative Medical System, a community financing scheme for health services in rural areas of China COPD CT Chronic obstructive pulmonary disease Computerized tomography DFID Department for International Development, UK DOTS Directly Observed Treatment Strategy for Tuberculosis EPI H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 iv Expanded Programme of Immunization EU European Union GDP Gini coefficient Gross domestic product A measure of income inequality, is a number between 0 and 1, where 0 means perfect equality (everyone has the same income) and 1 means perfect inequality (one person has all the income, everyone else has nothing). HIV Human immunodeficiency virus IDRC International Development Research Centre, Ottawa, Canada INCO International Cooperation (EU) MRI Magnetic resonance imaging NGOs PET Nongovernmental organizations Positron emission tomography R&D Research and development SARS Severe acute respiratory syndrome TB TDR Tuberculosis UNICEF, UNDP, World Bank, WHO Special Programme for Training and Research in Tropical Diseases UK UNICEF UNDP USA United Kingdom The United Nations Children's Fund United Nations Development Programme United States of America WHO World Health Organization WTO World Trade Organization Foreword In 2003, the Chinese government proposed its strategy for achieving a Xiao Kang society, which is people centered and based on a comprehensive, coordinated, and sustainable development concept. A development plan based on five balances between urban and rural areas, regions, social and economic sectors, humans and nature, and domestic and global markets, is the main strategy of the new development concept. Health is an essential element of a Xiao Kang society - if the health of all people is not improved, it will not be a Xiao Kang society. Thus more attention must be paid to health due to its importance in social and economic development. Over the past half century, China has, with very limited resources, made progress in improving the health status of its people, and this has been recognized throughout the world. China now provides widely accessible services to most of its 1.3 billion head of population. However, compared to the aims of a Xiao Kang society, still more needs to be done to improve the health system. Health sector reform and improvement of the health system requires research to provide scientific evidence of the need to re-examine existing health policies and create more effective policies for the future. Over the past two decades, great progress has been made in health policy and systems research, and this has impacted positively on health reform and policies. This document, prepared by the China Network for Health Economics, WHO, TDR, and the AllianceHPSR, is a product of the Health Policy Forum held in May 2004 in Beijing, with the participation of high-level policy-makers from central and provincial levels as well as researchers. The document describes the social and economic context of the country, carefully considers the opportunities and challenges facing the government in public health, and systematically summarizes key research findings relevant to policy-making. More importantly, it identifies knowledge gaps and proposes a number of options for filling these gaps. I believe that this document will be helpful for Chinese as well as international readers wishing to understand Chinese health policy-making and systems research, and for identifying areas of cooperation. I hope the document will be given the attention it deserves. Renhua Cai Professor and Executive Director China Network for Health Economics October 15, 2004 v Executive summary In the past three decades, along with rapid economic natural environment, and between the domestic and development in China, the overall living standards of the international markets. The five balance policy provides population have generally improved. However, disparities both opportunities and challenges for health sector poli- in social and economic development between urban and cy-makers and practitioners. rural areas, between the eastern and western regions, and between the rich and the poor have increased. The health status of the population has improved, but the senior officials of the importance of evidence-based pol- communicable diseases have become the major disease icy-making. This is primarily a result of greater openness burden, infectious diseases such as tuberculosis, hepati- in the society to constructive dialogue and critique, i.e. tis, and schistosomiasis are still the major health prob- to learning from success and failure, including among lems in poor rural areas. HIV/AIDS and other emerging H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 over the past years with increasing awareness among rate of improvement has reached a plateau. While non- vi The context of policy-making has significantly changed the political leadership. The outbreak of SARS played an diseases such as SARS have become new threats to pub- important role in opening eyes to the need for critical lic health. Wide disparities in health status exist, e.g. review of the sector. infant and maternal mortality are more than two times higher in rural than in urban areas and in the western The key research evidence relevant to the 11th Five-Year compared to the eastern region. Plan can be grouped under eight headings: The social and economic transitions experienced since o Globalization and macroeconomic trends. The development of the labour market might have far reaching the late 1970 s have brought changes to the health sector health consequences; the changes in lifestyle will including its partial marketization and privatization. result in increase of noncommunicable diseases. Concerns have been raised by research related to financing, efficiency, regulation, equity, quality, and cost of health services. China faces a number of major challenges in the future, including: increased globalization, population migration, and demographic and epidemiological transition. How these challenges are addressed will be critically important for the coming generations. Over the past decades, significant changes in Chinese society have affected the health sector in these ways: o responsibilities have been rearranged between all five levels of government (national, provincial, prefecture, o Population and health status trends. There is evidence for higher prevalence of communicable diseases and relatively worse child and maternal health in poor and migrant populations; new health challenges are facing China with its social and economic development. o Economic reform and health care financing. The introduction of financing through user-fees has significantly impacted equity in the society, and there is low efficiency in the allocation of public resources for health. o Organization and delivery of public health pro- county (district), township) in the economic and social grammes. Several changes in policy have had adverse sectors; effects on the performance of public health pro- o individual rather than collective arrangements now play a greater role in providing social services; grammes and possibly on disease patterns. o Ownership and governance. There is no conclusive sci- o market mechanisms and forces have been applied to a entific evidence that the new ownership models have wide range of services and exchanges in the society; had the intended impact; on the contrary, both the o part of the public or collective sectors has been pro- public and privately owned health services operate gressively privatized. along the same lines and lack willingness to engage in e.g. preventive services. The 11th Five-Year Plan will address the main shortcom- o Cost containment and regulation. There has been very ings through the policy of five balances: between rural limited success, if any, in containing costs in the health and urban areas, between regions, between economic and sector because providers find ways to compensate the social sectors, between economic development and the losses posed by the control attempts. fied for the 11th Five-Year Plan and beyond, e.g. in relation to: o transformation of the health financing system in the context of the economic transition, urbanization, and globalization of China o re-orientation and development of the public health system in the next 10-20 years based on situation analyses and projections of future health problems o the opening and regulation of the health care market o the pricing system reform, the tax waver policy to private investors in the health sector, and the enforcement of regulation in the health care market accordance with regional health planning to promote improved allocative efficiency in the sector. o the massive population movement from rural to urban areas. However, there are shortcomings in current policy and systems research in China. These include: o lack of a health policy and systems research agenda agreed by policy-makers and the research community o lack of a bridging mechanism between policy-makers o Provider performance management. Several cases suggest that staff bonus systems have had detrimental effects on public health. o National policies - local implementation strategies. Health policy-making in China is very complex and there is evidence of considerable discrepancy between the actual national policies and what happens on the ground, including non-compliance with official dis- and researchers o lack of incentives for researchers to participate in practical policy and systems studies o weak capacity o customary lack of critical independence o unfeasibility of policy recommendations o lack of funding opportunities for health policy and systems research projects. ease control policies. Possible options for closing the gaps in research capacity In the past decade, health policy and systems research in could include improving research-policy dialogue by the China has made significant contributions to knowledge contracting of existing institutions through rigorous and understanding of the complex transition of the soci- competitive processes rather than through the creation ety, and there are concrete examples of research which of new institutions. has been translated into policy. However, many policies are still formulated on the basis of weak or no evidence, and health policy implementation is not systematically evaluated. There is a long way to go before health policy and systems research reaches its full potential. Improved communication and dialogue between researchers and policy-makers will be critical to achieving this. Several health policy and systems research needs can be identi- vii H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 o transformation of the health care delivery system in 1. Background Over the past two decades, China has experienced dra- [Ministry of Health, 2004a]. While noncommunicable matic changes in both its social and economic structures. diseases have become the major disease burden, infec- The market-oriented economic reform successfully sus- tious diseases are still prevalent and are the major health tained an average growth rate of 8.3% in gross domestic problems in poor rural areas. Tuberculosis, hepatitis, and product (GDP) between 1980 and 2000 [Hu and Hu, schistosomiasis are the common public health problems, 2003], and the per capita GDP reached US$ 1090 in 2003. while HIV/AIDS and other emerging diseases such as While the overall population growth rate has slowed due SARS have become new threats to public health. In addi- to effective family planning policies since the mid 1970s, tion, the ageing population and the changes in lifestyle, the urban population has increased significantly due to including smoking and dietary habits, are resulting in migration. Along with economic development, the over- changes in health service needs. all living standards of the population have generally Wide disparities in health status exist, e.g. infant and residents increased from 478 and 191 Yuan in 1980 to maternal mortality are more than two times higher in 1049 and 337 Yuan in 2002, respectively, after adjustment rural than urban areas and in western compared to east- for inflation [National Bureau of Statistics, 2003]. ern regions. Disparities in social and economic development between China's health care system was developed in three tiers, urban and rural areas, between the eastern and western i.e. village doctors and clinics, township health centres, regions, and between the rich and the poor have grown. and general hospitals in rural areas; and community There are, at present, 30 million people in rural areas liv- health centres (stations), district hospitals, and tertiary ing in poverty according to official reports, most of whom hospitals in urban areas. In addition, there are specialized live in the western regions [Gong, 2004]. Using the US$ 1 hospitals, disease control centres, and maternal and child per day standard, it is estimated that 12.5% of the rural health institutions. Significant improvement has been population, i.e. about 162 million people, live in absolute achieved in health care quality, access to health poverty [World Bank, 2003]. How to decrease the dispar- resources, and number of qualified health workers. ities has become one of the prime concerns for the gov- However, the social and economic transition experienced ernment. since the late 1970s also brought changes to the health sector, including marketization and privatization of part The health status of China's population has greatly it, and concerns have been raised that the system is no improved over the past five decades, especially between longer as effective as it used to be. The government the early 1950s and the mid 1980s, starting from a low might, therefore, need to rethink and adjust its strategies baseline and with an emphasis on provision of primary for health sector development. The main concerns raised health care. Life expectancy reached 71.8 years in 2001. by research are: From 1990 to 2000, infant mortality decreased from 65 o Financing. Collection and allocation of resources for to 31 per thousand live births, and maternal mortality health care services are inequitable. In 2003, 79% of decreased by nearly 50 per cent [Yuan, 2004]. However, the rural population and 45% of the urban population the rate of improvement in some health status indicators was not covered by any health insurance [Ministry of has reached a plateau. For example, the under-five mor- Health, 2004b]. The uninsured are charged the same tality rate declined rapidly, from 202 to 51.1 per thousand fees for a given health problem regardless of econom- between 1960 and 1985 1. Since then, the rate of decrease ic status. There is no price differential according to has slowed and the mortality rate of under-fives income in the premiums collected by rural health decreased from 51.1 to 35 per thousand in 1985-2002 insurance schemes. Unemployed workers in urban 1 www.yaolan.com/shiqi/Toddler/app/toddler_article.asp?article=1009, 1 H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 improved. Monthly disposable income of urban and rural areas face financial difficulties in paying for health care even though almost all of them are covered by the urban health insurance scheme. Very few people who migrate from rural to urban areas are covered by health insurance, as migrants are not included in the current urban social health insurance policies. o Efficiency. The majority of health resources are allocated to urban services and tertiary hospitals. Public funding is not sufficient to ensure provision of basic primary health care in rural areas. Drugs and high technologies consume a large proportion of health H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 2 resources, while unnecessary provision of services and irrational prescription of drugs result in wastage of resources. o Regulation. The health regulations lack coordination between line sectors, e.g. the departments of health, public security, drug administration, and finance. Enforcement is not well undertaken due to insufficient financial resources and shortage of capable regulators, especially in rural areas. o Equity. Inequities in health status and access to health care between geographical areas and social groups are growing [Gao et al., 2002; Zhan et al., 2004]. Disparities of health status are evident between regions and population groups. ology of disease, lifestyle and health of the Chinese people. o Population migration. Population movement from rural-agrarian to urban-industry/service environments has increased rapidly and may even increase faster in o Quality. The quality of health care has improved, espe- the coming years, constituting an unprecedented pop- cially in cities and large hospitals. However, in rural ulation move. How to address health care provision areas, quality lags behind, as measured in terms of under such conditions will be a massive challenge. qualification of health workers and services provided. o Demographic and epidemiological transition. The suc- o Cost. During the past two decades, medical costs have cess of the 'one child' policy, combined with better escalated by far in excess of income and inflation. health and living conditions, will compress the demo- Utilization of high technologies and expensive drugs, graphic transition and lead to a population with a high and the low occupancy rate of hospital beds are some proportion of elderly people in China within one gen- of the critical factors contributing to this cost escala- eration, as compared to two or three generations in tion. Europe. While population ageing appeared in developed countries when per capita GDP reached US$ 10 China faces a number of major challenges. How these 000, in China, ageing of the population began when challenges are addressed will be critical for future gener- per capita GDP was less than US$ 1000 [Gong, 2004]. ations. They include: This poses significant challenges as the health system o Increased globalization. China is moving towards the has to deal with the high prevalence of both commu- centre of the world with all that this entails in terms of ideological and economic change, as well as of impact of global production and trade processes on epidemi- nicable and noncommunicable diseases using limited resources. 2. Policy context and challenges 2.1 The five balances in the Five Balances Policy statement, which will guide the formulation and implementation of the 11th Five-Year The economic transition that began in the late 1970s has led to profound changes in the social and production sectors of the country. These changes have directly or indirectly influenced health sector development, including policy formulation and implementation. At the macro level, these changes include: o Reduced role of all five levels of government (national, provincial, prefecture, county [district], township) in economic and social sectors. In the health sector, this Plan. Balance 1 : Between rural and urban areas. While it is recognized that the gaps cannot be filled in the short term, more efforts are proposed, including adopting fiscal and taxing policies to increase transfer payments and reduce tax burdens for the rural areas. Other measures, such as adjusting the rural labour structure and urbanizing the rural people, are also considered. change implied reduced public financing of public hos- Balance 2: Between regions. Strategies to reduce the pitals and increased funding by user fees. gap will include the National Strategy in Developing the arrangements for social services. In the health sector in Rural Areas. The fiscal transfer payment system will be this has affected preventive as well as curative health further developed and investment encouraged to gradu- care. Further, disestablishment of the collective econo- ally reduce the gap in social and economic development my in rural areas led to a collapse of the rural between the eastern and western parts of the country. 3 Western Areas, and China's Guideline to Reduce Poverty Cooperative Medical System. Balance 3 : Between economic and social sectors. o Application of market mechanisms and forces to a wide Measures proposed include: expanding the social insur- range of services and exchanges in the society. This has ance system to protect vulnerable groups, increasing the led, in the health sector, to focusing on revenue gener- inputs in the public health care system, and adjusting ation by both institutions and professionals, at times the income distribution system towards greater equi- at the expense of public health interests. tability. o Privatization of part of the public or collective sectors. In the health sector this has included converting village level clinics from collective to private ownership, and, in some areas, converting township/county and referral hospitals from government to private ownership. This has led to fragmentation and relegation of public health services. Balance 4 : Between economic development and the natural environment. This balance includes two points: saving natural resources for production, and protecting the environment. Regulation enforcement will be strengthened to control environmental pollution. Balance 5: Between domestic and international markets. China has made significant progress in improving the Growth of the economy through development of the general standard of living as a result of economic growth domestic market will be given more attention. over the past 25 years. However, economic growth is not Implementation of the Five Balances Policy will substan- a panacea to all problems in society. On the contrary, this tially impact all aspects of the social and economic sec- growth has created problems of its own, including: tors. The new development paradigm, as expressed increasing the gaps in development between regions, through the Five Balances Policy, emphasizes improve- resources and environmental problems, and increasing ment in quality of life rather than mere economic social conflict. All of this requires new thinking and new growth. This is directly related to development of the strategies. With this background, the government of health sector. Social services units, including the health China has embarked on a new paradigm for develop- sector, are facing new opportunities and challenges to ment, putting the people first, and aiming for coordinat- meet the requirements of the Five Balances development ed and sustainable development. The goal is a balance goal, especially in reducing the gaps between rural and between economic and social development as reflected urban areas and between regions. H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 o Increased reliance on individual rather than collective 2.2 Health policy-research dialogue Adaptation of the health system to a market economy has involved a number of difficult policy decisions, while the changing economic and health profile has made many more policy options available. During the period of planned economy in China, policies and decisions were usually made without sufficient empirical evidence. This was mainly the result of three factors. First, policy-making was dominated by political processes and policymakers were reluctant to use research evidence. Second, 4 critique of official policy was not welcome. Third, the H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 skills for conducting research and translating it into policy and action were lacking. The context for policy-making has significantly changed over the past years with increasing awareness among senior officials of the importance of evidence-based policy-making. This is primarily a result of the greater openness in the society, including among the political leadership, to constructive dialogue and critique, including learning from successes and failures. The outbreak of SARS, further, has played an important role in opening the eyes of policy-makers to critical reviews of the sector. The ongoing health sector reforms have also called for more research evidence in proposal and project design and implementation. For example, evidence has been sought to improve the effectiveness of the regional health planning project, the urban health insurance reform, and the funding policy for public health services. Under this increased receptiveness by policy-makers, the challenge is how to organize research systems and devise mechanisms for translating evidence into policy and practice. Interaction between research and policy has gradually increased since the mid-1980s. Departments of social medicine and health management have been established within medical universities, starting health policy and systems-related training and research on a larger scale. From the early 1990s, China's Network of Health Economics involving ten leading medical universities and institutions was set up with support from the World Bank and Ministry of Health. This programme has expanded health policy and systems research and improved the capacity of academic institutions to conduct research. A number of international organizations including the United Nations Children's Fund (UNICEF), the World Health Organization (WHO), TDR, the Alliance for Health Policy and Systems Research (Alliance-HPSR), the World Bank, the European Union (EU) under its International Cooperation (INCO) programme, and bilateral support programmes including the International Development Research Centre (IDRC) and the UK Department For International Development (DFID), have provided support for health policy and systems research through funding of research projects, policy seminars, workshops, publications, and formal and informal discussions between policy-makers and researchers. 3. Research evidence for the 11th five-year plan This section summarizes the major health policy and sys- regions and between the poor and rich within the same tems research findings in China from the past decade, region also widened. This all indicates a rapid growth of grouped into eight themes: Globalization and macroeco- inequality in the society. Poverty related diseases such as nomic trends, population and health status trends, eco- TB are more prevalent in poor compared to rich areas nomic reform and health care financing, organization [World Bank, 2002]. The widened income gaps constitute and delivery of public health programmes, ownership barriers for the poor in access to health care [Gao et al., and governance reform, cost-containment, provider per- 2002]. formance management, and national policies - local Over the past two decades, China has experienced dramatic changes in both social and economic sectors. China's health care system which should be considered During the economic transition, the public sector share by policy-makers, in order to better appreciate the oppor- of the total economy almost halved, i.e. decreased from tunities and challenges of the new development para- 60% in 1980 to 33.9% in 2003 [Fulin 2004], and the pri- digm. Another aim is to provide a basis for the identifica- vate economy increased accordingly. tion of key gaps in knowledge as well as health policy research capacity in the country, and to propose strate- China has increasingly found a central place in the world gies to fill such gaps in the coming five-year period and economy and production processes. Labour intensive beyond. manufacturing and service processes have increasingly been either moved to China from elsewhere in the world 3.1 Globalization and macroeconomic trends or have developed as business areas in China in response China has sustained a high GDP growth and improved These global production processes include a wide range living conditions for most people. Between 1980 and of permutations of wholly owned Chinese companies 2000, GDP values doubled. According to the national involved in primary production, joint ventures between development goal for the next two decades, in 2020 GDP domestic and foreign companies, contract production, will be double that of 2000; household incomes will support and infrastructure, etc.. Common to all is the increase at the same rate as in the past two decades need to establish market prices for both inputs and out- [Gong, 2004]. puts, and to operate in a highly competitive environ- to world market demand. ment. This is contrary to the situation during the period The most serious concern in economic development is of planned economy and has greatly influenced both the the disparity between regions and population groups. labour market and the way the society as a whole func- The Gini coefficient 2 of income was 0.22, 0.39 and 0.45 in tions. 1980, 1995, and 2002, respectively [Yuan, 2004]. The income ratio of urban residents over rural residents The tough world market competition requires Chinese increased from 2.7 in 1995 to 3.1 in 2002 [National Bureau producers to keep their costs as low as possible, which, in of Statistics, 2003]. A study indicated that if non-cash turn can lead to the compromising of environmental and incomes were included, the income gap ratio between occupational safety and health standards. urban and rural residents would be 6 [Gong, 2004]. Besides disparities of income between urban and rural With an almost inexhaustible supply in China of cheap areas, gaps in income between the western and eastern labour, and with outdated labour and registration laws, 2 The Gini coefficient, a measure of income inequality, is a number between 0 and 1, where 0 means perfect equality (everyone has the same income) and 1 means perfect inequality (one person has all the income, everyone else has nothing). 5 H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 implementation. One aim is to provide a digest of evidence from research on the particular situation of globalization has also meant an influx of labourers from graphic structure and rapid migration from rural to rural to urban areas. These labourers accept very low urban areas leads to changes in health care needs and wages and no or limited job security and health care cov- service utilization and, therefore, requires different erage. arrangements for health services financing and provision. Globalization has impacted China not only in the economic sector, but in all aspects of the society, including births; in poorer provinces such as Qinghai, Guizhou, and open, and global thoughts and values have been adapted Gansu, the infant mortality rate ranges from 30-44 per through international exchange. The lifestyle, especially 1000 live-births [World Bank, 2002]. A similar pattern can smoking, diet and physical activity, is also being influ- be found for maternal mortality, which is more than 5- enced through increased advertisement, communica- H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 Beijing and Shanghai is now below 9 per 1000 live- ideology, technology, and lifestyle. China today is more 6 The infant mortality rate in wealthier provinces such as fold higher in poorer than wealthier provinces. There tion, and development of trade and consumerism; these were 4.7 million pulmonary TB cases in China in 2000. changes are likely to have an indirect impact on the The prevalence rate was 254 per 100 000 population in prevalence of noncommunicable diseases such as cancer, wealthier provinces and almost twice as high, i.e. 451 per diabetes and cardiovascular disease. 100 000 population, in poorer provinces [National TB Survey, 2002]. Congested and generally poor living condi- 3.2 Population and health status trends tions combined with problems of access to health care services are likely to lead to high TB prevalence also in sub-groups, such as migrant workers and their families. The population growth rate has been successfully controlled in China. During the past five years, the net annu- The demographic and lifestyle changes are likely to result al increase in population was 9.2 million. It is predicted in a substantial increase in noncommunicable diseases that the net annual increase of population will be 8.4 in the next ten to twenty years. An estimated 350 million million during 2005 to 2010, and 8 million a year during Chinese smoke, and it is predicted that about 1.2 million 2010 to 2020 [Wu and Sun, 2003]. This will significantly will die from smoking related diseases every year 4. The change the population structure over the coming gener- population with hypertension is now more than 100 mil- ation. Migration from rural to urban areas has increased lion, and with diabetes and chronic obstructive pul- over the past 25 years. In 2000, there were 121 million monary disease (COPD) is 20 million [Kong, 2002]. migrants, including 70 million moving from rural to Cardiovascular and COPD were the first reasons for death urban areas and 20 million moving between cities in cities and rural areas respectively [Kong, 2002]. The [Gong, 2004]. In 2003, about 140 million people of rural case rates of hypertension, diabetes and COPD were 26.2, origin were working or temporarily residing in cities 5.6, and 7.5 per thousand, respectively, in the third survey [Gong, 2004]. In 2010, it is expected that about 160 mil- for health services. In urban areas, changes in lifestyle, lion population will move from rural to urban areas 3. including in diet and in physical inactivity, have rapidly resulted in increasing prevalence of chronic diseases In addition to poorer health, the migrants also have seri- such as diabetes and hypertension. Unintentional ous problems with access to health services, leading to, injuries have become the first reason of death among for example, worse outcome of pregnancy in terms of children in China. Traffic accidents and drowning are the premature births and deaths compared to non-migrant leading causes of death among children in cities and women [Zhan, Sun and Blas, 2002]. Changes in demo- rural areas respectively [Jiang and Ding, 2000]. Health 3 The challenges for the implementation of child development protocol and woman development protocol in China, 2004 http://www.cinfo.org.cn/lgxg/zynr/014.htm] 4 www.tobaccocontrol.com.cn/view.asp?id=143 For public, collective and private village health clinics, user charges, especially drug mark-ups, were the dominant sources of financing. In township and county health institutions, only a proportion of staff salaries could be covered by the government budget so the remainder was generated from user charges. This form of financing has moved attention away from preventive, promotive, and other population based health interventions towards individual clinical care, which can be charged to the patient. The result has been a negative impact on the TB and schistosomiasis control programmes [Zhan et al., 2004; Bian et al., 2004]. 7 also introduced in public health programmes. A report from 2000 indicates that about 50% of the operating costs of disease control institutions were covered by user charges [The United Nations Task Force on Health, 2000]. A study which included detailed analyses of income at ten schistosomiasis control stations in Hunan Province, education towards changing the lifestyle, and cross-sectoral coordination between the departments of health and transportation, need to be given more attention. 3.3 Economic reform and health care financing found that user-fees constituted, on average, 62% of total income, ranging from about 30% to about 85% [Bian et al., 2004]. Allocative efficiency Health resources are often inappropriately spent on high-technology equipment and drugs with low utiliza- Sources of funding tion and cost-effectiveness [Liu and Wei, 1996]. Public The reduced role of the state has led to increased respon- funding has not been appropriately allocated either to or sibility of individual health institutions and of other sec- within public health programmes. One case in point is tors. Public hospitals are financed through three sources: the schistosomiasis control programme, where it was government subsidies, user fees, and drug mark-ups. found that public funding had been diverted into dis- Government subsides mainly come from local govern- count prices for individual care of questionable cost- ments. Provincial, county, and township governments are effectiveness in order to generate revenue for the control responsible for their own hospitals. The balance between station [Bian et al., 2004]. the three sources of income has changed significantly over the past 25 years. In 1980, government subsidies and income from user fees and drug sales constituted, respectively, 21.4%, 18.9% and 37.7% of total income. By 2000, government subsidies had fallen to 8.7%, while income from user fee and drug sales had increased to The proportion of total health expenditure in rural areas covered by government sources has also decreased. In 1993, government funding accounted for 34.9% of total health expenditures; this had decreased to 24.9% in 1998 [Wang, Meng, and Bian, 2001]. 40.2% and 47.1% respectively [Ministry of Health, 1980 The allocation of public funds for rural health is not com- and 2000]. mensurate with the health care needs and size of the H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 It is a concern that, from the mid 1980s, user fees were rural population. In 1998, only 39% of the total govern- bursement of the insured for only major medical costs ment health budget was allocated to rural areas where does not guarantee freedom from economic hardship for 70% of the total population resided [Zhao, Wan and Gao, less costly events. This might affect the willingness to 2003]. Because of disestablishment of the collective subscribe. Second, local government in poor areas may economy, rural health sector development relies much not be able to provide matching funds, which would neg- less on collective resources and, as a result, drug sales are atively affect the scheme's sustainability. Third, qualified the main source of income, accounting for 90% and 66% personnel to manage the insurance fund are lacking in in village clinics and township health centres respective- many places. Lastly, the catastrophic payments that are ly [Wei, 1999]. being averted by the scheme are not easy to define as they are often relative to the specific situation of a cov- Finally, the distribution of resources between preventive ered individual. and curative care is not appropriate. Health expenditures 8 on curative care accounted for 81.8% of total government H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 health expenditure, while expenditures for public health programmes accounted for only 10.9% of total expenditure [Zhao, Wan and Gao, 2003]. The remaining 7.3% represents expenses for rehabilitative care, ancillary services to health care, health administration, and capital investment, which account for 0.6%, 2.0%, 1.6%, and 3.2% respectively [Ministry of Health, 2003]. Insurance Insurance to protect against potentially catastrophic Health insurance in urban areas has, in turn, two modalities. By the end of 2003, about 54% of urban residents were covered by health insurance, including 27% by the Urban Social Health Insurance scheme [Ministry of Health, 2004b; Ministry of Labor and Social Security, 2003]. The rest of the population, including economic dependents of the insured, paid out of pocket for their medical care. However, the expansion of insurance coverage and increased ability of insurers to reimburse were found to increase health care utilization by the insured when experiencing health problems [Liu et al., 2002]. payments for health care has been evolving in China fol- The urban health insurance system faces a number of lowing different schemes for rural and urban areas. challenges. First, how supplementary insurance can be Economic reform in rural areas from the late 1970s sub- set up for pooling the catastrophic risks is still a concern. stantially changed the financial context for the health In most cities, only a small portion of the population is sector owing to collapse of the Rural Cooperative Medical covered by supplementary health insurance; the majori- System (CMS), mainly due to the disestablishment of the ty who are so covered are government employees [Chen collective economy. et al, 2002]. Second, the expansion of urban health insur- Reorganization of the CMS is the main strategy to improve the rural health care financing system and covered about 10% of the total rural population by the end of 2003 [Ministry of Health, 2004b]. For the poorer provinces, a central government subsidy of 10 Yuan per capita per year, matched by the provincial and county governments, is allocated to support revitalization of the CMS. Each individual covered should then contribute about 10 Yuan per year as an individual premium. This funding is only sufficient to cover major medical costs that threaten economic well-being. However, in some areas outpatient services are also covered. A pilot scheme has covered more than 300 counties in China, but there are some concerns for its design and implementation even if there is no hard evidence at present. First, reim- ance to all urban residents is challenging, especially so for the poor who are not able to pay the insurance premium [Cai, 2000; Meng, 2002]. Lastly, the efficiency of operating existing insurance schemes should be improved, particularly to reduce administrative costs. Even though some success has been achieved, there is a need to further investigate how to sustain the balance between insurance income and expenditure through cost containment, among other measures. Equity While health institutions have gained considerable independence from political and bureaucratic control, costs have risen and barriers in access to health care have been created for vulnerable groups [Bloom, 1998; Bloom and Tang, 2004]. Well intended fee exemption programmes vent and control diseases through actions such as immu- for the poor have not been effectively implemented, nization, mass treatment, health education, regulation, mainly due to the absence of a dedicated public subsidy etc. In the case of TB and sexually transmitted diseases, to compensate providers for loss of income resulting public health programmes encourage individuals to from providing the exemption [Meng, Sun and Hearst, come forward for treatment in order to stop the spread 2002]. of disease. ened the inequalities in society. First, access to health care is more constrained for the poor than for the rich and for the uninsured than for the insured. The very large percentage of patients who require hospitalization but do not gain access to care due to financial constraints is as high as 75% in rural areas and 56% in urban areas [Ministry of Health, 1999]. Public health programmes, such as TB detection and observed treatment (DOTS), have not been effectively delivered to the communities in poor areas due to financial constraints [Meng et al., 2004a]. Coverage by Expanded Programme on Immunization (EPI) activities was different between poorer and richer areas by 10 to 25 per cent, especially for hepatitis B immunization [Sun and Meng, 2004]. In certain urban areas, only 40% of migrant women received pre-marital medical examination, 48% antenatal examination, and 13% postnatal examination, which was 2040% lower than for permanent residents [Han, Shi and Liu, 2001]. Such differences have been shown to lead to worse outcome of pregnancy [Zhan, Sun and Blas, 2002]. Second, payment for health care is not equitable [Ministry of Health, 1999]. It was found that poorer households spent 8% of household income on health care compared to 5% for higher income households [Han, Shi and Liu, 2001]. Inequity has also been found in disease control programmes such as schistosomiasis control, where it was found that payment is extracted from patients to the limit of their ability to pay, something which is likely to hurt the poor more than the rich [Bian et al., 2004]. The 'three-tier' health care delivery system in both urban and rural areas forms the basic structure of health care organization in China. In rural areas, village clinics and township health centres provide primary health care, and county hospitals provide specialty medical services. In urban areas, community health units and district hospitals provide primary health care services. Municipal and provincial hospitals provide tertiary medical services to both urban and rural people. Over the past five decades, the size of the health care delivery system has continued to expand in terms of number of health institutions and workforce. By the end of 2003, there were close to 806 000 health institutions, including 515 000 village clinics, 17 800 general hospitals, 44 300 township health centres, 3600 centres for disease control (CDCs, which provide public health programmes addressing infectious diseases, health education, food security, environmental health, etc.), 3000 maternal and child care institutions, and 1700 disease specific treatment institutions. There were 0.87 million village health workers and 4.3 million health workers in township and higher level health institutions [Ministry of Health, 2004a]. Expansion of the health care delivery system has not been even in distribution; qualified health workers and advanced equipment are concentrated in urban areas and at tertiary hospitals [Liu and Wei, 1996]. The private health sector has grown, as shown by the fact that, at village level, about 50% of clinics now operate as private enterprises. In urban areas, the number of private hospitals has increased rapidly especially in some 3.4 Organization and delivery of public health programmes southern provinces. One of the challenges in rural areas, Public health programmes are organized to address the found that neither private nor public village clinics were health of the whole population or of groups within the willing to provide preventive care without reimburse- population. They operate at the population level to pre- ment. This was mainly because the operation of public with the increased number of private clinics, is how public health programmes can be effectively delivered. It was 9 H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 The current health financing mechanisms have deep- village clinics was also largely reliant on user fees [Meng, Liu and Shi, 2000]. Enforcement of regulations is needed for both rural and urban health providers because the increased competition, complexity and size of the medical market is not currently matched by the capacity and qualifications of the regulators [Qu and Meng, 2004]. China's public health care system has suffered in the process of economic transition due to increased reliance on user payments and greater attention being given to H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 10 hospitals rather than to primary health care. The problems can be summarized as follows: o Insufficient financial support from the government. Government support for public health programmes has been reduced in the past years. Most public funding goes to individual clinical care. The share of the health budget in total government expenditure decreased from 4.2% in 1980 to 3.9% in 2002 [Ministry of Health, 2003]. The government budget for CDC and maternal and child health institutions is not sufficient to cover all the salaries of health workers, and most of the operating costs of public health programmes are covered through user charges. However, a few public health programmes, such as the immunization programme, depend less on user fees. Most public resources go either to services with low cost-effectiveness, e.g. tertiary care, or are directed by primary care health workers are educated at medical university compared to 41% in cities [Ministry of Health, 2004a]. o Ineffective coordination between preventive and curative service. The current organization of the health services leads to separation of curative and preventive health care institutions. There is a lack of coordination in delivering preventive services between preventive and curative health institutions. Hospitals could take a providers into subsidizing individual and clinical care crucial role in providing preventive services, including in order to generate income through user charges immunization and health education, but are reluctant [Bian et al, 2004]. Implementation of essential public to do so because these services do not generate rev- health programmes, including control of TB and schis- enue. Furthermore, the responsibilities of hospitals in tosomiasis, has been negatively affected [Bian et al, delivering preventive care have not been clearly 2004; Meng et al., 2004]. defined [Xu et al., 2001]. The problem is made more o Skewed distribution of resources. The public health care severe as public health institutions are changing their system is more crucial in rural areas where infectious services from preventive to curative care in pursuit of diseases such as TB, hepatitis, and schistosomiasis, and revenue. Following this trend, some leprosy and TB maternal and child health problems, are more preva- control stations have expanded their services to sexu- lent and severe. In rural areas, besides the limitations ally transmitted diseases [Meng et al, 1997]. due to financial resources, there is also shortage of o Regulation. Regulation in public health programmes, qualified health workers. More than 75% of the doctors including in food safety, pollution control, infectious working in village clinics are 'barefoot doctors' who diseases control, and maternal and child health, is pro- have received very little medical training for their oper- gressing. However, the overall effectiveness of these ations [Wang, 2003]; while only 18.7% of township regulations is not satisfactory. Factors which influence ownership. The findings indicate that, after the reform, funding, and inadequate coordination between line health workers had more opportunity for training and departments such as the departments of health, pub- the overall price of health care was reduced. However, the lic security, and business administration. It has been mechanisms for these changes were not clear [Wu, found that about 47% of health regulators at county 2000]. It was reported in Haicheng, Liaoning Province, level perceive their skills and knowledge to be in need that the cost of surgical operation for acute appendicitis of strengthening in order to fulfill their functions was reduced from 1500 Yuan to 800 Yuan after privatiza- properly. It has been estimated that the government tion [Li, 2000]. However, the study was not clear about budget covers only 40-60% of the costs of implement- the change in overall medical expenditure and what the ing the Law of Infectious Disease Control, while the factors were that influenced the observed reduction in rest of the costs are to be covered by cross-subsidies costs. including revenues from fees [Sun et al., 2003]. Regulations for improving the performance of health providers have also been enforced by both central and 3.6 Cost containment and regulation provincial governments, including The Regulation for Managing Hospitals and The Law for Doctors. No stud- Medical services are mainly paid through a fee-for-serv- ies have assessed the impact of these regulations on ice system. The prices of services are set by provincial unnecessary prescription of drugs, use of high technol- governments through a fee schedule following central ogy equipment, and quality of care, among other topics. government guidelines. The prices set by the government are called the official fee schedule. While the fee 3.5 Ownership and governance schedules are obligatory for government hospitals, they are optional for the rest, although the prices do need to Cost escalation and inefficiency have been the major be approved by the Department of Price Administration. concerns in the health sector. A number of strategies The official fee schedule is overly complex; it includes as including ownership and governance reform have been many as 4000 procedures, making it unwieldy and limit- pursued to remedy this situation. ing its regulatory capacity. Ownership reform is a controversial topic in China. Distortion of the price schedule was widely found during Privatization was thought to be a magic wand for the 1980s and 1990s. This was mainly attributed to the increasing efficiency, as had been the experience in the fact that prices in the fee schedules were set much lower industrial sector. The main forms of ownership and gov- than actual costs [Liu, Liu & Chen, 2000]. However, the ernance reform included outright hospital privatization, distortion did not disappear after the prices were raised introduction of market incentives into publicly run serv- at the end of the 1990s. The evidence is that public hos- ices, and the introduction of shareholding of public hos- pitals did not strictly follow the fee schedule. Provision of pitals. While in theory these reforms are likely to have a unnecessary health care was found to be one way positive impact on health care quality and cost contain- providers used to increase revenue without violating the ment through increased competition, there is, at present, fixed prices. In two tracer studies on acute appendicitis no conclusive evidence to confirm this theory. One study and childbirth, 30% to 45% of medical spending was comparing service quality and efficiency in Shandong unnecessary due to over-provision of procedures [Meng showed no difference in quality, extent of treatment, or et al., 2004b; Xu et al., 2001]. It has been suggested that willingness to provide preventive health care [Meng, Liu irrational prices distort medical practices, resulting in & Shi, 2000]. Another study in Yancheng County, Henan overuse of drugs and technologies [Hsiao, 1995]. Weak Province, examined the changes in training opportuni- enforcement of regulation may be one explanation for ties and prices before and after the transformation of the failure of the fixed price system. Another reason township hospitals from collective ownership to private might be that the method uses average cost as the pric- 11 H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 implementation include unqualified staff, insufficient ing basis for all health providers regardless of the cost- turer's exit price was based on production costs plus a 5% structure of the individual health institution [Meng et profit margin, to which a 15% mark-up was added for the al., 2002]. wholesale price. A further 15% margin constituted the retail price. Since profit margins for both wholesalers A high prevalence of unnecessary drug use has been found to be one of the reasons for the escalation of phar- hospitals to their products, manufacturers would set tion of drugs is caused by both the health provider and higher-than-cost prices. Under this system, drug prices the user. For the provider, drug prescription generates were recognized by government to be unreasonably revenue; for the user, drugs are the most visible treat- high, which led, in 2000, to a change in the government's ment for their health problem and are therefore in drug pricing strategy from controlling the entire cascade demand [Xiang, 2002]. Revenue generated from the use H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 drugs were preferred. In order to attract wholesalers and maceutical expenditures in China. Unnecessary prescrip- 12 and retailers including hospitals were fixed, expensive of prices for all pharmaceuticals to controlling the retail of high technology was another important source of price of selected products only. However, drug expendi- hospital financing. A study in 33 hospitals between 1994 tures for all patients still increased rapidly after imple- and 1997 showed that investment in high technologies mentation of the new pricing strategy [Cheng, 2004]. such as magnetic resonance imaging (MRI) and comput- After the price of drugs was reduced by the central and erized tomography (CT) scanners has resulted in a mas- provincial governments, the hospitals studied tended sive waste of resources [Ci, 1997]. For example, the utiliza- to prescribe more drugs for patients to maintain their tion of positron emission tomography (PET) was shown level of income. This meant that quantity more than to be as low as 30% to 60% of the potential workload. To price became the determinant for drug expenditure. compensate for this underutilization, prices charged to Improvement in rational use of drugs and correcting the the user were set at exorbitant levels; targeted clients present perverse incentive structure for hospitals will be were mainly the insured and rich [Bian et al., 2002]. important challenges for containment of drug expenditures [Cheng, 2004]. A study in Shanghai suggested that Some studies assessing the urban health insurance the use of a drug list and capping the annual growth rate reform have shown there has been a positive impact on of hospital incomes might be effective in controlling the cost containment and access to health care. These stud- rapid increases in drug expenditures [Hu et al., 2001]. ies found that replacing fees for services by contractual However, there is no conclusive evidence for the effec- relationships between the insurer and the health tiveness of this strategy in other areas. provider led to control of hospitals' use of resources [Meng et al., 2004b; Yip and Eggleston, 2001]. However, the studies did not provide evidence about the effect of the new payment methods on quality and equity. 3.7 Provider performance management In order to stimulate health workers to increase their Pharmaceutical expenditure in China was US$ 28 billion productivity, a bonus system was introduced in the hos- in 2001, and accounted for 44.4% of total health expen- pital sector in the mid-1980s based on a flat rate. Later, ditures [Zhao, Wan & Gao, 2003]. This figure is 15% to bonuses were introduced elsewhere in the health sector 30% higher than in most developed or middle-income and increasingly performance based methods were countries. The hospital sector is the main retail supplier brought in, including elements such as revenue generat- of drugs, and drugs have been the most profitable fee ed and quality and volume of service. However, it has item in hospitals since the early 1980s. been found that income is the main element encouraging health professionals to provide as much service as Between 1980 and 2000, the government controlled the possible, including drugs, and thus induces doctors to entire cascade of drug prices, from the manufacturer's over-treat and over-prescribe [Xu et al., 2001]. Several exit price, to the wholesale and retail price. The manufac- studies have shown that, in public health programmes, health providers under-provide less profitable services, On the other hand, health is a sector that is closely relat- over-prescribe drugs, and over-provide more profitable ed to many other departments, e.g. the departments of services. One study, for example, showed that TB health planning and reform, finance, labour and social security, care providers did not meet the minimum requirements civil affairs, administration of food and drugs, and so for visits to TB patients' homes because such care did not when a health policy is made at a particular level, all the provide financial returns for the staff [Meng et al., departments concerned should be involved. 2004a]. Another study on TB care showed that, in addiThe advantage of this approach to policy-making and essary tests and drugs to patients, and paid less atten- implementation is that the central government can tion to case detection and contact follow-up [Zhan et al., make policies for the country as a whole based on a com- 2004]. In schistosomiasis control programmes, the prehensive analysis of needs and within the overall health providers reduced preventive interventions in development framework. Central policies can then be order to save costs and increased emphasis on profitable implemented at the local level with consideration of the clinical care activities [Bian et al., 2004]. specific situation. However, this approach also has potential problems, e.g. leakage of authority, risk of low compli- An internal contracting system was introduced in the ance in implementation. hospital sector from the early 1990s, following recommendations by the health authorities, in an attempt to There are no incentives for local policy-makers to active- improve both departmental and individual staff per- ly develop polices that may be more suitable for their formance including quality of care. This contract system own situations. In addition, local financing limitations is an internally administrated mechanism within each might inhibit the implementation of centralized policies hospital division and usually has four components: vol- which require local government funding. Only a few ume of work, quality of service, revenue generated, and studies have addressed this area of policy research. patient satisfaction. No systematic assessment has been undertaken to date of the impact of this approach on One study found that, for TB control programmes, overall performance. However, in a study in Shandong and performance was better in wealthier areas than that in Henan provinces, it was found that clinical departments poorer areas, partly because the poorer counties were were concentrating on revenue generation because not able to match the funding provided by the World income had become the most important indicator in Bank loan project [Meng et al., 2004a]. Another study assessments by hospital managers [Xu et al., 2001]. showed significant delays in implementing policies mandated from higher levels. For example, in 1996 the central 3.8 National policies - local implementation strategies government asked for price adjustments to health care services. However, up to 2001, this policy had not been implemented for various reasons [Meng et al., 2002]. The health policy-making process in China is complex. Other studies found that the local governments did not This is due partly to the five levels of government admin- implement central government policies for disease con- istration and to the transition towards more autonomy trol. Guidelines issued by the Ministry of Health on TB in health care financing and regulation for provinces and prevention and control, including use of the DOTS strate- counties. Decentralization has given local governments gy and provision of free or subsidized services, were not greater power in making decisions on the management implemented; instead some inappropriate interventions of local public affairs. This means that local government were included in the local policy [Zhan et al., 2004]. can make policy for local affairs and adapt the policies from higher level government in light of local circumstances. From this point of view, the governments at all levels are both policy-makers and policy-implementers. 13 H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 tion, the providers extended treatment, provided unnec- . jun I . ..I 4 - n_z< 4. Research needs and systems China has made significant leaps forward in health policy and systems research, and in knowledge generation 4.1 Current research needs to close gaps in knowledge and dissemination in the past two decades. Although Balance 1 : Between rural and urban areas. Addressing research projects conducted over the past ten years, the this balance includes transfer of payment between number is probably in three digits. The projects were sup- urban and rural areas, changes in the labour market ported by the Chinese government (all levels) as well as structure, and increased urbanization. Addressing the international agencies such as the WHO, World Bank, EU, rural-urban divide, and the integration of health systems TDR, and Alliance-HPSR. Some NGOs such as the Ford between cities and industrializing peri-urban areas, are Foundation, and bilateral development agencies such as some of the major challenges for the coming years and DFID, have also provided funds. As well, technical assis- will affect very large parts of the population. Research tance for the projects was received from international needs are: academic institutions such as the Institute of o The contributions made by health investment to eco- Development Studies at the University of Sussex (UK), nomic development and rural-urban disparities. Harvard School of Public Health (USA), and other sources. o Challenges and strategies in the regulation and man- Some of the findings have already been translated into agement of the health care market in both rural and health policy by the central and provincial governments. urban settings during the continuing transition from Two examples are worth citing: o Recommendations for promoting the health security planned to market economy in China. o The functioning of the health care system in a society system, reallocation of health resources in urban and which is in a large-scale and long-lasting transition. rural areas, partnership between the public and pri- o Strategy and policy on systems of medical assistance vate sectors in health care service delivery, as well as and social health insurance for floating populations. re-regulation and deregulation of the health care serv- o Access to health care services by the poor, including ice market, were integrated into The Decision on Health Reform and Development enacted by the equity and outcome issues. o Evaluation of Basic Medical Insurance for Urban Central Committee of the Communist Party of China Employees and the New Cooperative Medical System and the State Council in 1997. in rural areas, in terms of access to health care, quality o The Cooperative Medical System was re-established in 2002, using earmarked funds transferred from the Ministry of Finance and Department of Finance of the Provincial Government, as well as from the Prefecture Government. This policy is based on recommendations from research on the rural community health financing system conducted by the China Network [Wei, 1997]. of health care, responsiveness of hospitals, and cost containment. Balance 2: Between regions. Addressing the imbalance between eastern, central and western areas will require encouragement and incentives for economic activities in some areas. Addressing the regional effects will call for multidisciplinary and timely case-study type of research in order to capture the 'unexpected'. Health policy However, many policies are still formulated on the basis of weak or no evidence and health policy implementation is not systematically evaluated. There is a long way to go before health policy and systems research reaches its full potential. Improved communication and dialogue between the researchers and the policy-makers will be critical to achieving this. research could include: o The constraints and options for fiscal transfer for health from Central Government and Eastern areas to Central and Western areas of China. o Strengthening of endemic diseases control in Central and Western China; formulation and application of specific policies; balance between preventive and curative services. o Public and private partnership in health care delivery in central and western areas of China. 15 H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 there are no formal statistics about the total number of o Impact of the increased economic activity on the environment and health status. o disease (lung cancer, liver cancer, etc.) prevalence. o from the developed world to China in the environment The labour market, health status and access issues. Balance 3 : Between economic and social sectors. Addressing this balance will involve both an increase in and redistribution of resources between sectors and within the health sector. Policy and systems research can contribute to both policy formulation and evaluation of Preventive policy and regulations on pollution transfer of globalization. o Quality-adjusted life years and economic losses effected by ecological degradation in China. o Implementation and impact of health-related interventions to address environmental issues. policies. An increasing resource base for health provides an opportunity to do more, but also poses a challenge to do the right thing in order not to waste the society's H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 accelerate globalization in terms of increased marketing resources. Research could include: of manufactured consumer goods, some of which may o 16 Balance 5: Between domestic and international markets. Development of the domestic market is likely to Empirical studies on the relationship between social be harmful to public and individual health. Market forces development - including education, R&D, and poverty will, by nature, drive activities to where the greatest prof- alleviation programmes - and health status in China. its are found, hence will often be on a collision course The efficiency of allocation of resources, cost-effective- with public health and require strong evidence to sup- o ness, and returns on investments in health. o The impact of reforms to local tax systems on health finance. o The interrelationship between health development strategies and measures to reform local government to make it more accountable to the community. o Measures to enable people to become better informed users of health services, and to improve the capacity of local representative bodies to monitor and influence health system performance. o o National health accounts. The disparities between health status and social factors such as gender, occupation, social group, and income group. Balance 4 : Between economic development and the natural environment. Continued rapid growth, port the public and political debates. This can only come from critical and independent research. Specific studies could be on: o Survey of occupational injury and diseases, and the impact of China's access to the World Trade Organization (WTO) on socioeconomic development. o The challenges to and policy on tobacco control after China deregulated the retail price, the wholesale entrance policy, the manufacture and the import of tobacco, according to its WTO commitments. o The alert and response system to infectious diseases emerging across borders. o Regulation of food safety. o Regulation of the health care market, i.e. the private, semi-private and public markets. o The effect of different models of ownership and governance on the health sector. including one that has social objectives and involves attempts to geographically regulate the growth, will potentially have an adverse impact on the environment and will directly and indirectly impact the health of the 4.2 Likely future research needs to close gaps in knowledge population. Addressing the relationship between eco- Experience from the past decade has shown that prob- nomic development and nature, with its links to health, is lem-oriented health policy and systems research has an a challenge that requires critical independent policy and important role to play in improving the process of health systems research. Specific studies that could be under- policy-making and implementation. Extensive dialogue taken include: and close collaboration among researchers, policy-mak- o ers and medical workers have played, and will continue Development and application of policies for protecting the environment and health. o Empirical studies on environmental degradation and to play, a critical role in the development of the health sector in China. Development of the socioeconomic environment, includ- nate activity in this area. However, there is a need to ing the health sector, which by all measures has been improve shared priority-setting. The Ministry of Health extremely rapid, will continue for a long time, probably has not set up the health policy development agenda for more than one generation. Health policy and systems agreed by relevant departments in the central government and the research community. research, therefore, will need to operate with a shortterm horizon, addressing the immediate needs and chal- o The lack of a bridging mechanism between the policy- lenges of the 11th Five-year Plan. In addition, health poli- makers and health policy and systems researchers cy and systems research is needed to prepare for the 12th In spite of the China Network on Health Economics, Five-year Plan and beyond. Long-term health policy and policy-makers lack sufficient access to the results of systems research is needed on: policy and systems studies as well as to the skills need- o Transformation of the health financing system to one ed to assess and use these results for policy-making. The policy researchers, on the other hand, are often o The re-orientation and development of the public unaware of the needs of health policy-makers, and lack health system in the next 10-20 years based on situa- the skills and channels to communicate their results effectively. tion analyses and projections of future health problems. o The lack of incentives for researchers to participate in o The opening and regulation of the health care market: practical policy and systems studies pricing system reform, tax waver policy to private At present, researchers are hesitant to conduct practi- investors in the health sector, and enforcement of reg- cal research because of the lack of financial support, ulation in the health care market. including from local health authorities; the o Transformation of the health care delivery system in researcher's top priority is promotion in his/her aca- accordance with regional health planning to promote demic position rather than practical research findings. efficient allocation of health resources. Greater research commissioning is required to attract o The massive population movement from rural to urban areas. the most talented researchers to the field. o Weak capacity in policy and systems research Researchers have insufficient training on policy and The above are broad areas of research which need to be systems related subjects, and most policy researchers further developed and defined. have little experience on which to integrate theory into practice. Most policy and systems research 4.3 Gaps in research capacity There are important gaps in research capacity in China, including in priority-setting and skills for translating requires a multidisciplinary team, but many researchers have little experience in managing and participating in such teams. o Customary lack of critical independence research findings into health policy and practice. It is nec- For historical reasons, many researchers abstain from essary for China's government to demand research to making conclusions that critique existing policies. meet their policy needs, and for the research community Policy-makers, on the other hand, are slowly beginning to push health policy and systems research forwards to to realize the value of critical independent policy meet the future challenges. The gaps between needed research. health policy and systems research and current research o The unfeasibility of policy recommendations performance include: Researchers tend to underestimate the obstacles to o The lack of a health policy and systems research agenda policy implementation in the real world, and often get agreed by policy-makers and the research community frustrated when their recommendations are not taken China has made exemplary progress in developing a up immediately and in the form that they are made. well functioning network of health systems research institutions and has national institutions that coordi- 17 H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 which is equitable and sustainable. o The lack of funding opportunities for health policy and able through close dialogue between researchers and systems research projects policy-makers at national and provincial level. Many In China, only a small proportion of research funds are strategies can be used to promote health policy and sys- used for policy-oriented research, while funds from tems research in China, including multidisciplinary international donors directed to policy and systems research collaboration, research capacity building research are insufficient to meet the needs. Policy- through training, research activities, and dialogue and makers have no recurrent earmarked funds to support communication between policy-makers and researchers. research. Most funds for health policy and systems There is also room for organizational development, research come from foreign sources. including establishing research and training networks within provinces and internationally, and for technical 4.4 Options for closing the gaps H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 18 China has made some progress in closing the gaps assistance and funding support from the national and provincial governments as well as from international donors. between the requirements for conducting health policy and systems research and the capacity of the research Improving the research-policy dialogue institutions and researchers. For instance, China Network Much research-policy dialogue has taken place on an ad has sent 26 trainees to participate in the World Bank hoc basis, depending on individual funding and project Flagship Training Program on Health Sector Reform and opportunities. In order to bring researchers and policy- Sustainable Financing since 1997. The China Network has makers closer together, dialogue needs to be more for- also held 24 training courses on health economics and malized and could, for e.g., include: health policy for trainers and researchers from the 10 key o National medical universities in China, and has held another 28 training programmes for officials from the health authorities at provincial/prefecture government level. Moreover, the China Network has coordinated eight Senior Policy Seminars in which critical issues in health policy were discussed and new research findings disseminated to officials from relevant departments of central and provincial government. TDR has supported training programmes on health economics and management, and case-study research, among other things. DFID has also provided funds to support dissemination of health policy research findings, while the Alliance-HPSR has supported training for Chinese researchers and policymakers in taking research into policy and practice and has also funded a number of projects. The concept of evidence-based development of health systems has been accepted by officials, and a greater and provincial health policy research fora, which might e.g. bring policy-makers and researchers together once a year to discuss new research findings as well as policy challenges and research needs. o Publication and dissemination of regular policy briefs, providing digests of research findings in a language and form relevant to policy-making. o Establishment of a website for mapping research needs and opportunities, including calls for proposals, funding, etc. Improved dialogue will help researchers and policy-makers develop a common understanding of the issues as well as a common vocabulary, which eventually will facilitate communication and uptake of recommendations. Contracting out and commissioning of existing institutions number of policy-makers are now aware of the impor- More and more health policy-makers at national level tance of concrete evidence in terms of the health prob- emphasize research findings in the process of policy- lems, health interventions, health outcomes, and per- making. However, they frequently complain that they formance of health financing schemes and health care cannot find the reliable evidence they need, while offi- delivery systems. So there is increased demand for scien- cials from provincial level have difficulty in finding appli- tific health policy and systems research, which is achiev- cable research results relevant to their local situations. At the same time, many researchers conduct their research according to personal interest and funding opportunities Creation of new institutions At present, some policy-makers and researchers think it rather than according to priorities for health policy. necessary to establish a national health policy research Frequently, the quality of research undertaken is wanting centre, and that a national institution should coordinate due to a combination of lack of skills and the fact that activities such as health policy and systems research pri- many policy and systems researchers work in isolation, ority-setting, communication between senior policy- i.e. are not exposed to the rigorous peer review process makers and researchers, and management of resources which characterizes science in many places. to support research. However, others suggest that the option to increase contracting and commissioning with existing institutions, as described above, is preferable, rently involved in policy and systems research, some of because: whom are listed in the Annex. Suggestions for making o There are already many national health policy and sys- better use of, and further developing, existing capacity tems research institutions, such as the China Health and structures, include: Economics Institute, the China Hospital Management o Health authorities and relevant departments at Institute and, in addition, every province has several national and provincial levels should develop priorities universities which could conduct health policy and in health policy and systems research based on the systems research. What is needed is the challenge, macro-socioeconomic environment and critical health funding, and bridging of research to policy. problems as well as on the evolution of health care o Re-constructing and re-organizing the existing health management. Government funds from national and policy and systems research institutions in China could provincial levels must be made available for health lead to more benefits in a shorter period of time. policy and systems research. o Contracting out or commissioning of health policy and o The provincial governments will have more immediate benefit from restructuring existing research capacity systems research should be based on concrete princi- because this will ensure local relevance and sustain- ples and transparent process. Independent and techni- ability, including providing training opportunities for a cally competent review committees should be involved in evaluating proposals and reviewing results. new generation of local researchers. o Large institutions with secure funding tend to lose Competitive selection of researchers and projects is of innovation and quality over time due to not being con- paramount importance for the process. stantly challenged to improve performance. o There is a need to strengthen exchange and capacity building programmes for conducting multidisciplinary health policy research in order for Chinese academic institutions to support the next generation of researchers. Participating in concrete and externally reviewed research projects is the best way to give young researchers a feel for, and the skills to conduct, high quality research. Use of existing capacities, provided that appropriate structures for commissioning are in place, makes good sense in terms of economy and sustainability. Further, through a competitive model, researchers are challenged to continuously improve the quality of their research. Capacity building for policy and systems researchers and policy-makers Capacity building includes more than mere provision of training courses. For it to be sustainable, a comprehensive capacity building programme would include e.g. the following elements: o Provision of opportunities for research dialogue, funding, peer review, and international exposure. o Integration of health policy and systems research into the curricula for researchers and policy-makers to be. o Specific skills training, including conduct of multidisciplinary case-study research. 19 H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 A large number of individuals and institutions are cur- 5. Conclusion, strategy and way forward To maintain the social values in Chinese society, it will be critical to develop a fair, efficient and sustainable health care system during the coming two decades in accordance with the new development paradigm. Health policy and system research can provide the evidence to improve policy-making towards this goal. Research undertaken in China in the past ten years, mostly by Chinese researchers, has proved to be a valuable tool to identify problems in the health system and to help resolve operational bottlenecks. Building on this sound basis, research priorities can now be identified and H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 20 resources dedicated to research can be increased. To make new investments more productive, specific strategies for improving health policy and systems research and translation should be formulated. These should include capacity building for researchers and policy-makers, exercises for setting research agendas, coordinating research at the national and provincial levels, and disseminating research findings to policy-makers. More funds and resources should be allocated to support health policy and systems research programmes. With assistance from international agencies, the China Ministry of Health should launch research projects targeting priorities in the context of the new development framework. Formal and informal dialogue between researchers and policy-makers, funding for research, and uptake of findings should be included in the formulation of the 11th and 12th Five Year plans for health development. It is our hope that the review presented this document will contribute to the debate and facilitate the way towards improved health, equity and health care delivery in China and elsewhere in the coming years. Annex: Directory of health policy research institutions Ming Wu Professor Health Executive Training Center, Beijing Medical University Xueyuan Lu, Haidian District, Beijing, PRC 100083 Whong@public.bta.net.cn Guoxiang Liu Professor Health Executive Training Center, Harbin Medical University 199 Dongdazhi Jie, Nangang District, Harbin, Heilongjiang, PRC 150001 lgx@mail.hl.cn Qingyue Meng Professor Center for Health Management and Policy, Shandong University, 44 Wenhua Xi Rd, Jinan, Shangdong 250012, PRC qmeng@sdu.edu.cn Yinchun Chen Professor Health Executive Training Center, Tongji Medical University, No.13, Hangkonglu, Wuhan, Hubei Province, PRC 430030 Chenyc2@sina.com.cn Jianmin Gao Professor Health Management Dept., Xi'an Medical University, Zhuque Dajie, Xi'an, Shaanxi, PRC 710061 Weig@irix.xamu.edu.cn Zhengzhong Mao Professor Health Executive Training Center, Huaxi Medical University, Renmin Nanlu, Chengdu, Sichuan, PRC 610044 Hxhe@mail.sc.cninfo.net Shanlian Hu Professor Health Executive Training Center, Shanghai Medical Univ. 138 Yixueyuan Lu, Shanghai, PRC 200032 Slhu@fudan.ac.cn Junfeng Chen Associate Professor Health Management Dept., Dalian Medical Univ., 465 Zhongshan Lu, Shahekou District, Dalian, Liaoning Province, PRC 116027 john5151@163.com Shuiyuan Xiao Professor Public Health School, Hunan Medical Univ., 22 Beizhan Lu, Changsha, Hunan Province, PRC 410078 Sphhmu@public.cn.csh Zhifeng Wang Professor Weifang Medical College, Shengli Dajie, Kuiwen District, Weifang, Shandong Province, PRC 261042 zhifengwang@163.com Qicheng Jiang Professor Health Management College, Anhui Medical Univ., Anhui, PRC 230032 aydjqc@mail.hf.ah.cn Jianghong Rao Professor Social Science Dept., Jiangxi Medical College, 161 Bayi Dadao, Nanchan, Jiangxi Province, PRC 330006 Zhenhua Chu Professor Jiangsu Medical Information Institute, No. 129, Hanzhong Lu, Nanjing, Jiangsu, PRC 210029 Jin Ma Professor Shanghai Second Medical University, No. 227 Chongqinglu RD. 200025 Jiwei Zhang Deputy Director China Health Economics Magazine, 41 Xiangshun Jie, Xiangfang District, Harbin, Heilongjiang, PRC 150036 CHE@public.hr.hl.cn Yuan Liping Senior Project Officer POLICY Project/Futures Group International China/USAID HIV/AIDs Program l.yuan@policychina.com.cn Hai Wen Professor Center for Health Policy & Management, Peking University Zhang Kaining Professor Kunming Medical college Zuo Xuejin Professor Shanghai Academy of Social Sciences Hu Angang Professor Chinese Academy of Social Sciences Jing Jun Professor Faculty of Sociology, Tsingua University Zhang Xiuran Professor Institute of Social Security, Beijing Normal University 21 H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 Renhua Cai Director National Health Economics Institute P.O. 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Zhan S et al. Revenue driven TB control - three cases in China. International Journal of Health Planning and Management, 2004, 19(S1) (in press). Zhao Y, Wan, Gao. Health expenditures in China 2001. Chinese Journal of Health Economics, 2003, 22:1-3. 23 H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 Wang Y. SARS crisis and public health system. Journal of Chinese Traditional Medicine of Anhui, 2003, 6:529-530. H E A LT H P O L I C Y A N D S YS T E M S R E S E A R C H I N C H I N A - TDR/GEN/SEB/04.1 24 About the authors Qingyue Meng, MD, MPH, MA(Econ), is Professor of Health Economics and Director of the Centre for Health Management & Policy, Shandong University, China. He is a Member of the Advisory Committee of Health Management and Policy to the Ministry of Health. His research areas include cost-effectiveness analysis of health programmes and health care financing, and his research team has addressed the development of costing methodology for hospitals, cost-effectiveness and financial analysis of public health programmes, and the impact of health care financing reform on tuberculosis control programmes. Shi Guang is Deputy Director of the Department of Health Policy Research and Associate Professor at the China Health Economics Institute. He holds a Master's Degree in Social Science and Health Management from Harbin Medical University. He has conducted health policy and systems research in the China Health Economics Institute since 1997 and has published many papers on health care financing, health delivery system re-construction, the governance mechanism in public health organization, and performance assessment of public hospitals in China, in journals on health policy and management at home and abroad. Mr. Yang Hongwei, MPPM, a National Programme Officer in the WHO Representative's Office, China, is working in the field of health development and health policy. He has worked on health related issues for more than 15 years, accumulating much experience and knowledge on health policies and their application. After graduating from the University of Southern California, he focused on the issues of health and macroeconomics, and the roles of government in the health sector. Recently he was involved in preparing major policy papers on key health issues in China, which were presented to the Chinese government by the WHO Representative in China. Miguel A. Gonz?lez-Block graduated from Cambridge University and obtained a Doctorate in Social Sciences from El Colegio de Mexico. His research interests cover health policy and systems, reproductive health, and primary health care. He was the Founding Director for Health Policy Research at the National Institute of Public Health of Mexico, and collaborated through the Mexican Health Foundation in the design and development of health policy options. Gonz?lez-Block was Health Specialist for the Inter American Development Bank, in charge of health sector analysis and loan projects for Nicaragua, Panama and Belize. He is currently Manager of the Alliance for Health Policy and Systems Research. Erik Blas is Programme Manager of the UNICEF/UNDP/World Bank/WHO Special Programme for Research and Training in Tropical Diseases (TDR). With a background in public health and corporate management, he has long experience of addressing large-scale health programmes in developing countries from both a research and implementation perspective. He has held positions such as Programme Coordinator for the Expanded Programme on Immunization in Tanzania; Chief of the Planning, Management, and Training unit of the Global Programme on AIDS; Chief Technical Advisor to the Central Board of Health in Zambia; and has authored several publications on health sector reform. Mailing address: Steering Committee for Social, Economic and Behavioural Research (SEB) UNDP/World Bank/WHO Special Programme for Research and Training in Tropical Diseases (TDR) World Health Organization 20, Avenue Appia 1211 Geneva 27 Switzerland Street address: TDR Centre Casai 53, Avenue Louis-Casai 1216 Geneva Switzerland Tel: (+41) 22-791-3725 Fax: (+41) 22-791-4854 E-mail: tdr@who.int Web: www.who.int/tdr