Escalating health care costs are set to place an unsustainable burden on citizens, underlining the need for drastic reforms, according to the World Bank.
"China needs to deepen its health reform to avoid the risk of creating a high-cost-low-value health system as observed in some high-income countries," the institution said in a new report on Friday.
Health costs have grown at a rate higher than gross domestic product (GDP) growth since 2008, the report flagged. The situation was further magnified by a rapidly aging society and the burden of non-communicable diseases (NCDs), which were already China's number one health threat, the report stated.
"Business as usual, without reform, would result in growth of total health expenditure from 5.6 percent of GDP in 2015 to 9.1 percent in 2035, an average increase of 8.4 percent per year in real terms."
Health care is a vital component of China's 'new economy,' a hot-topic term that tends to dominates foreign investor interest in the mainland. Consisting of consumer-led sectors that also include internet and renewable energy, the 'new economy' has been a key beneficiary of government spending as President Xi Jinping seeks to make it the country's key growth engine, replacing 'old' sectors such as heavy industry.
If Beijing can moderate the main drivers behind soaring health expenses, which include prices per treatment and unit cost increases, the government could achieve savings equivalent to 3 percent of GDP, the report said.
To realize these savings, the World Bank suggested eight policy options aimed at making the system more efficient, compared to the current "hospital-centric, fragmented and volume driven" framework.
China's current model is focused on dishing out more treatments instead of actually improving population health outcomes, the report observed. Moreover, "there is a shortage of qualified medical and health workers at the primary care level, which further compromises the system's ability to carry out the core functions of prevention, case detection, early treatment and care integration."
As Chinese citizens start enjoying higher incomes and longer life expectancies, the above factors have affected their confidence in health care providers.
At the core of the World Bank's recommendations is the adoption of people-centered integrated care (PCIC), a term that refers to a model organized around the needs of individuals and typically characterized by information sharing among providers and active patient engagement.
Among the report's other suggestions were better quality control to oversee both the public and private sectors and ensure best practices. More two-way communication was also needed between clinical teams and patients to ensure the latter group made informed decisions. Hospitals also needed to be reshaped so they were no longer standalone facilities but instead, part of a network that included other providers such as diagnostic units and social services.
The report also advocated a better-trained workforce, easier private sector engagement and the prioritization of public investments based on the burden of disease and where people lived.
"It will take China about 10 years to implement the proposed reforms and reach full scale. Globally, many other middle-income countries also are experiencing similar demographic and economic transitions. We believe that China's experience with health care reform will carry many important lessons for other countries," remarked World Bank president Jim Yong Kim.