The city of Wugang in Henan Province has become the first in the country to establish a basic medical security system for all of its urban and rural residents.

Some 30,000 residents working in the city's government institutions or enterprises can have their medical expenses reimbursed. If they are hospitalized, 75 percent of the expenses above 500 yuan (US$62) can be reimbursed from the city's medical insurance account. Their employer pays 6 percent and they pay 2 percent of the medical insurance, while the remaining 92 percent is from local coffers.

For just 10 yuan (US$1.20) a year, rural residents, laid-off workers and the unemployed can have an annual subsidy of 12 yuan (US$1.50) for clinical visits. If hospitalized, they can receive extra financial assistance, which can be as high as 10,000 yuan (US$1,230) a year for serious diseases.

With an estimated annual revenue of 440 million yuan (US$55 million) this year, this city has allocated 10 million yuan (US$1.2 million) to launch the medical security system.

Insurance coverage for rural residents, laid-off workers and the unemployed is very low, compared with that for their urban employed counterparts. But the city aims to gradually improve this situation over the next couple of years.

Such a move by the government of a county-level city of 320,000 has set a good example, as costly medical expenses become a heavy burden for many low-income families and even reduced some to destitution.

What this city government has done sends a message that it is not impossible for governments at various levels to establish a medical security system to guarantee at least basic clinical services for their residents.

Instances of some local governments spending millions on splendid squares or palatial office buildings also suggest that it is not a lack of money but a lack of concern for the well-being of their residents that prevents other localities from introducing similar schemes.

The city of Wugang ranks the 20th among the province's 108 county-level cities. At least the 19 cities that have a higher financial revenue can do the same as Wugang. But it is so far the only place to have taken such a step.

Needless to say, it is a question of attitude rather than a financial issue.

Serving the needs of their residents should be a top priority for governments at different levels in order to meet the central government's goal of building a harmonious society.

This move by the city of Wugang has met that requirement. If more cities could follow the example of Wugang, we would be able to get closer to that goal in a more speedy fashion.

(China Daily July 21, 2006)