China's medicare reform is not market-driven, but has to be led by the government, according to health officials.

China is in need of establishing a government-led medicare system, supplemented by market economics through reforms, said Liao Xinbo, deputy director of the Guangdong Provincial Health Department, at a national annual meeting on private hospital management held in Guangzhou on June 19.

Unlike the United States and other richer nations, where annual average per capita medicare spending can be as much as US$5,000, China cannot load its people with such a heavy burden. Liao said, adding that China's per capita gross domestic product or GDP is only about US$1,000.

Liao suggested that China use Britain and Canada as examples of how a national healthcare system could work.

Hospital reform in China, which started in 2000 and which entailed privatizing hospitals, was described as the government's ridding itself of a burden, acknowledged Yu Zonghe, former director of the Department of Medical Administration under the Ministry of Health (MOH).

But Yu added that privately-run hospitals place more importance on profit-making than actual medical treatment. This does not help in bringing cheaper and more accessible medical treatment to the people.

Which is why the MOH started regulating the reform by stressing that medicare services are public welfare services and should be directed by the government, according to the vice minister of the MOH Ma Xiaowei.

"Medical and health work is a matter of life and health of the people, and unlike enterprises, its reform has to be guided by government instead of market," Ma said recently.

Liao believes that this shift in reform ideal implies that the MOH has become more cautious about privatization.

"We have reminded those who fund private hospitals of possible policy changes," said Zhao Chun, who in charge of the private sector under the Chinese Hospital Management Society.

Chen Tingliang, president of privately-funded Ren'ai Hospital in Jiangmen, Guangdong Province, acknowledged that he is now hesitatant when it comes to increasing investment in the hospital. "I will wait and see," he said.

(Xinhua News Agency June 22, 2005)