China, one of history’s most ancient civilisations, with the world’s largest population, is facing a major crisis in its healthcare system following the announcement earlier this year by the Chinese government detailing a complete health reform for the country. Bertrand Guichoux investigates the cause and effects of China’s latest challenge

First published in ITIJ 105, October 2009

China, one of history’s most ancient civilisations, with the world’s largest population, is facing a major crisis in its healthcare system following the announcement earlier this year by the Chinese government detailing a complete health reform for the country. Bertrand Guichoux investigates the cause and effects of China’s latest challenge

One of the main issues China faces is a disparity in terms of healthcare provision between the rural and urban populations, caused by the country’s economic boom over recent decades, which has seen urban areas increase their wealth and in turn their healthcare infrastructure. This is a continuing problem despite the recent influx of foreign visitors to the country; many of whom flock to rural areas to visit cultural sites or areas of outstanding natural beauty, or who work in the country and form part of the new boom in expatriate numbers. This growing foreign population has, however, led to an increased demand for quality private healthcare, and private joint ventures have subsequently led to a boom in private medical provision; but China’s health system still operates very differently to the western model and so for international travel insurers and assistance companies doing business in the country a good knowledge of how the Chinese system works is essential. Here, we take a closer look at what such companies should look out for and we detail some of the main components of the Chinese healthcare model.

Healthcare traditions

China is administratively divided into 23 provinces, five autonomous regions, four centrally administrative municipalities and two special administration regions – Hong Kong and Macao. In this complex administration, public healthcare institutions are fragmented into different categories (with third class the highest level and first class the lowest level – also known as social community service) and belong to different authorities, such as the Ministry of Health, the Ministry of Education for university hospitals, and the Ministry of Defence for Army hospitals. Furthermore, they are divided between city, district and country-wide government agencies, as well as enterprises, which are public-sector hospitals built by state-owned companies for their employees. There are over 300,000 public hospitals in mainland China in total.

In this complex administration, public healthcare institutions are fragmented into different categories

When looking at public hospitals, it is important to note that many such facilities still combine western and traditional Chinese medicine (TCM), the practice of which remains a major component of the country’s healthcare. Western medicine started gaining increasing acceptance in the 1980s, but still only a few hundred thousand physicians received training in western medicine at this time; the goal being to synthesise the best elements of traditional and western approaches. A new generation of doctors, however, who now follow a similar course of study to those practising medicine in western countries, may well eventually replace doctors who still practice TCM. Such a replacement of the older generation of doctors who still use TCM in referrals could make western medicine more dominant in China, but, at the moment, the practice of western medicine in China is still far removed from the way it is utilised in western countries, as we will se later in this feature.

Some major cities like Beijing, Shanghai, and Guangzhou also house private healthcare institutions formed through joint ventures between foreign investors and Chinese companies (mainly university hospitals), and such ‘international hospitals’ are the preferred option for foreign visitors. Wealthy locals and executive Chinese people with good medical insurance also use such facilities. All ‘international hospitals’ in China belong to the private sector, providing international standards and offering a range of services similar to those seen in western countries, such as outpatient and inpatient departments, accident and emergency units, investigations departments and customer services, as well as administrative services. These administrative services are able to provide, for instance, an estimated cost of treatment through a coding system or via itemised bills. Local state hospitals, however, are unable to provide such customer or administrative services to their customers or to insurance or assistance companies. International hospitals do have some limitations. For certain cases, such as in severe intensive care cases, coronary cases and serious trauma, especially neuro-surgical trauma, as well as for specific investigations, international hospitals often have to refer patients to their local hospital partner, as they either do not have the necessary equipment or the required licence to treat certain specialties. Of course, by referring patients to the local partner, and thus into the state healthcare system, the issue of standard of care resurfaces, along with problems relating to communication, customer and administrative services.

There are some private clinics that are owned and run by Chinese nationals, but they are not common, and tend to specialise in TCM. In total, at the end of 2003, there were estimated to be 12,599 private medical establishments in the country.

Availability and quality of care

The availability and quality of healthcare varies widely from China’s cities to its countryside – from a selection of international private facilities and third category public hospitals in the major cities, to fewer and a lower category of public hospital in more remote areas. As mentioned, many of the rural areas attract foreign tourists, but medical facilities in such parts are often not suitable for foreign travellers. Poor medical infrastructure, lack of acceptable hygiene, a limited knowledge of western medicine as well as the language barrier all contribute to a less than pleasurable experience for the unsuspecting tourist.

In each province, there are generally a few third category hospitals, located predominately in the province’s capital. Hospitals referred to as the ‘provincial hospital’ should be recognised as providing the highest level of care in that province, and are always located in the capital. A third category hospital usually offers a comprehensive range of specialist units in which all major investigations can be performed – they include intensive care units, intensive coronary care units and accident and emergency departments. Doctors in third category hospitals are, usually, better recognised for their medical knowledge and experience than those doctors in other lower class medical establishments, and a certain number have had some medical training abroad and often speak other languages, such as English, French, German or Japanese. However, this is not always the case and often doctors – even in third category hospitals – are not fluent in a foreign language.

Most third category hospitals also have a VIP department with private or semi-private rooms that were initially used for government officials or the Party. Today, such departments are also used by rich local Chinese people or foreigners.

Over the last few decades, many third category hospitals have been renovated or completely rebuilt. They have a capacity of between 750 and 2,000 beds and some outpatient departments can offer more than 2,500 consultations – including primary care consultations – every day, although no appointments can be scheduled. China has no national primary care system, in particular general practice, so patients generally visit hospitals for initial diagnoses, referrals and general consultations. The introduction of general practice clinics in urban parts of the country began in 1999, but its acceptance has been slow against the strong tradition of hospitals as primary care providers. In several cities, notably in Beijing, Shanghai and Guangzhou, primary care has also been developed through joint ventures between existing hospitals and private investors, with such facilities offering an international standard of service. These establishments are used by foreign tourists and expatriates as well as wealthy locals.

Some major cities like Beijing, Shanghai and Guangzhou also house private healthcare institutions formed through joint ventures

Public hospitals are generally managed by some of the doctors who practise in the hospital. However, when seeing around 40 to 50 primary care patients, as well as carrying out ward rounds, within their first four working hours, doctors simply don’t have the time to talk with patients and fully understand their medical needs, which often leads to mistreatment or misdiagnosis. What’s more, the doctor then disappears from the medical wards to become an administrator in the hospital management department.

China follows no international healthcare standard in its public hospitals and clinics, and even though the newly built third category hospitals are equipped with the latest technology and infrastructure, giving the impression of some sort of international standard, behind this outward appearance China still provides medical care in its own unique way to a standard that varies widely from rural to urban areas. The cultural influences of China, as well as the power of TCM, may also partially explain why there is still such a huge gap between the medical procedures and standard of care provided in China and that provided in western countries.

In fact, medical procedures and protocols are one of the best examples to highlight the differences between methods of care in China and those of the west. In China, after a hip replacement, a patient usually stays on bed rest for a month before starting a smooth physiotherapy programme; a patient suffering from a sore throat or urinary infection receives intravenous treatment for few days and may subsequently be admitted to hospital; yet a suspected case of appendicitis admitted over a weekend may have to wait until the following Monday before treatment is administered, while in western countries the decision of surgery would be made as soon as the diagnosis and the need for surgery is confirmed.

Furthermore, a doctor on duty in a Chinese accident and emergency department (or any other department for that matter) won’t make a medical decision alone but, instead, has to wait for the return of the senior doctor in charge of that department. This is a typical demonstration of the cultural impact of Chinese education, methodology and practice: thus, a Chinese person should listen to their master, follow what the master says and not be better than the master. The senior doctor is the ‘master’ and, therefore, the only person who will take responsibility for a decision. However, when treating a foreign patient, the senior doctor will often invite other colleagues to share in the responsibility of decision-making, which has been known to – and could potentially – postpone any care needed.

Foreign travellers

With regards to health, nothing is easy for a foreigner who travels, or lives, in China, especially if they find themselves in need of treatment in a remote area. Tourism in China has changed over the last decade, with more travellers visiting the country on their own and discovering minority-inhabited provinces where traditional Chinese culture is still intact. As we have discovered, it is in these, usually remote areas, where medical facilities are poorest. In many Chinese provinces, tourists should be aware of the difficulties of receiving acceptable treatment, especially in Tibet, the Himalayan Mountains, Yunnan province and in some areas like Dali, Shangri-La, Lijang and Sichuan province.

Foreign travellers in need of medical attention are usually directed initially to the nearest hospital, usually a public institution, where they will face local standards as well as a communication barrier, except if they are close to a major city where international facilities are available. Depending on the patient’s location and the severity of the patient’s medical condition, it would be recommended that the patient is transferred to the closest city offering suitable medical facilities for evaluation and stabilisation to take place – which can usually be arranged by road or by air. The state does not provide a road ambulance service in all provinces, but where it does, such transport is generally provided by the treating hospital. However, it is not free. A range of private companies also offer road ambulance services throughout the country. Although there is currently no dedicated air ambulance based in mainland China, a deal signed in September between AirMed Asia and Asia Air Medical will see strategically stationed Beechjet aircraft permanently configured for medical flight in Beijing and Shanghai. Other private jets that are used as air ambulance aircraft are stationed in mainland China, but they need to be configured each time a call comes in for their use.

In the case of serious illness, ICCU care or an injury that requires surgery, particularly for spinal, hip and knee, and more specialised treatments, it is highly recommended that the patient be evacuated to Hong Kong or Bangkok, both of which are recognised as the closest medical centres of excellence. So as to avoid any delay if such a situation occurs, it is recommended that travellers carry an individual visa rather than a group visa, as it can take up to two days to obtain an individual visa, which is required for re-entry to the country. In some circumstances when emergency transfer is required, such delays may have serious consequences for a patient who needs to be evacuated as soon as possible.

Most of the better-known hospitals are based in the larger Chinese cities. In Beijing, Peking Union Medical College Hospital, Anzen Hospital, Tiantan Hospital and Sino Japanese Hospital are the most well known in the public sector and are all used by international assistance companies. In the private sector, Beijing United Family Hospital, a joint venture establishment, is the only facility that offers medical treatment to an international standard. In Shanghai, the most recognised public hospitals are Huahsan Hospital, Ruijin and Shanghai First People Hospital. In the private sector, there are three international hospitals available: Shanghai United Hospital, Shanghai East Medical Center and Parkway-WorldLink Hospital – all of which also offer outpatient services. Some of the above local hospitals, which are mainly university hospitals, are considered the leading medical establishment in the country for their specialty, and feature in the top 10 hospitals in China. Families from all over China queue for days in front of the registration department of these hospitals to get an appointment.

Doctors in third category hospitals are, usually,  better recognised for their medical knowledge and experience than those doctors in other lower class medical establishments

For the foreign community, international hospitals and clinics are usually the preferred place of treatment and primary consultation, and assistance companies will usually direct their clients to such establishments. However, a foreigner who is married to a Chinese national may have more flexibility in where they are allowed to go for consultations and treatment, with hospitals such as Huashan Hospital in Shanghai or the Sino Japanese Hospital in Beijing permitting the admission of such foreign patients. Most other state-run medical establishments do not permit foreign visitors.

Whether a foreigner or a Chinese national, doctor appointments, consultations and treatment is not free in China, even in the state healthcare system. The government does provide a national health insurance, but supplemental out-of-pocket payments are still high. As a result, many people in China cannot afford even basic healthcare, and so go without.

Insurance, assistance and costs

Assistance companies in China continually face challenges when dealing with the local population – whether marketing their products to potential local outbound travellers who have little knowledge of, or recognition for, international insurance and assistance, or whether dealing with local hospitals on behalf of international clients. Differences in behaviour and decision-making habits, plus the bureaucracy of some institutions, can make it a complicated task to manage cases in China. To make things even more complicated, insurance and assistance companies have to deal with five autonomous regions, in each of which there is a lack of supervision and monitoring from the central government, meaning that each has different regulations. Every step in a medical assistance case faces challenges from a medical point of view with, perhaps, a treating doctor refusing to name a patient ‘fit to fly’ in fear of his personal responsibility, or from a billing point of view with the accounting department, which often doesn’t provide a detailed bill and asks for the payment to be settled before sending the bills (even when an agreement has been signed with the hospital). There are even issues from a medical evacuation perspective where, for example, an official medical report stamped by the hospital – which is required in order to get all the landing permits required for an air ambulance – is difficult to obtain, especially at night or on a weekend; or where commercial airlines are not co-operative or prepared for stretcher application.

There is also no uniformity in China in relation to the cost of care, which varies widely from the cities to the countryside, and between the public and private sector. An outpatient consultation could cost less than RMB25.00 (US$3.70) in rural areas, while in the major cities could reach RMB200 in local state hospitals and RMB800 in international clinics. A CT scan without contrast may cost less than RMB1,000 in the public sector, but in international clinics/hospitals may reach RMB12,000. An appendectomy should cost less than RMB10,000 in a state hospital, yet in an international hospital it will cost more than 10 times this amount. For this reason, in some cases it may be cheaper to repatriate a foreigner to his home country for treatment once he is fit to fly, rather than having him stay in an international hospital in China for any longer than is absolutely necessary.

For a foreigner admitted to a local state hospital, only minimal treatment or investigation may be given if the hospital doesn’t recognise the existence of a payer. A deposit may also be required from the patient’s family until a third party has been confirmed to pay the bill on the behalf of the patient’s insurer. However, it is often difficult for a foreign insurance company to arrange a letter of guarantee and to pay the local hospital directly, due to language barriers and a preference by local hospitals to be paid by a local, recognised party. It is also difficult for a foreigner to use a health insurance card for direct billing – most local hospitals don’t know what this is. Usually the local assistance company, who will act as a third party, is the interface between the insurance company and the hospital.

Local hospitals in China have not adapted to the treatment of foreigners who visit, or live, in the country, and international hospitals are generally not medically equipped to offer the full range of inpatient services to foreigners. Also, as mentioned, western medicine hasn’t yet reached the expected level of care management found in western countries. It must be a challenging moment for a foreigner who cannot communicate with the medical staff to have to face an environment that does not reach an international standard. How can one be confident in the treatment received when placed in such a situation?

On a final note, it is essential for foreigners travelling in China to purchase travel insurance with good evacuation/repatriation coverage and it is important for the insurance company to have a full understanding of health in China. Don’t look at the structure itself, which may look very impressive but, instead, look deeper at how it actually works.