Written by Madhurima Nundy.

The historical pathway for the emergence of China and India as global players has been different. The different political regimes have shaped the development of the economy and social sectors. These socio-economic and political differences have shaped health service development in both countries. While up to the 1970s the pathway of health services development was divergent, in the post 1970s there has been some convergence. Many of the ideas and content of reforms were similar in nature while the spheres of engagement with the respective governments, bureaucracy and professional bodies between these countries have varied.

China made impressive gains in health outcomes by the end of the 1970s. Despite the hostilities China faced globally, its remarkable development indicators did not go unnoticed. China’s model of barefoot doctors, the Cooperative Medical System and overall approach to health as central to development had a significant influence at the international conference convened by the WHO and UNICEF on Primary Health Care in 1978 at Almaty. India was a signatory, while it was still struggling to build its public health system with dismal health outcomes reflected in very high infant and maternal mortality rates.

In the 1980s and 1990s, the health sector reforms were part of a larger restructuring of the economy in many middle and low-income countries. In the Chinese case it was the shift to market socialism, while in India it was adopting the ideas of neo-liberalism. State retrenchment in social policy was one of the main reform steps in both countries that had its impact on the health sector as well. In China, the public health service system became the site for commercialisation due to the dramatic withdrawal of government subsidies. The three-tier referral system that existed pre-1978 dismantled overnight with the onset of economic reforms. People were no longer insured or covered for any episodes of ill-health. The primary level of care was mostly dominated by private practitioners and public hospitals at the secondary and tertiary level were autonomised to function as commercial entities where user charges were levied on consultations, medicines and use of diagnostics. There were perverse incentives given to doctors for generating revenue for the hospitals. India on the other hand had a privatised health sector at the primary and secondary level by the 1970s. This was largely due to the low investments made in the public sector that gave space for the private sector to expand. With the liberalisation of the economy in the early 90s the private sector was given further impetus for expansion by subsidising land and importing technology. Unlike China where the public sector started behaving like the for-profit, the public sector hospitals were not autonomised and were largely controlled, managed and funded by the government in India without profit motives but due to the unresponsive public health care system, many people were seeking care at the unregulated private sector. Evidence shows that the unpredictability of illness and the high costs incurred was impoverishing an estimated 3.3% of India’s population every year.

In the late 1990s and early 2000s, China too was dealing with rising inequalities in access to health care, high out-of-pocket expenditure that was over 60% of overall health expenditure due to the profit maximising behaviour of the public hospitals. To improve access and universalise health coverage, China restructured its health financing in the early 2000s. It launched three insurance schemes for its rural residents, urban employees and urban residents one after the other. These schemes were initially shallow with low coverage and high co-payments. China moved to a path of rectification by making amends to strengthen its public health system at the primary level, to expand coverage through insurance and to reform its drug policy in 2009. Out-of-pocket expenditure has reduced to about 34% of total health expenditure. India meanwhile launched the National Rural Health Mission in 2004 to strengthen rural health care services to reach out to the vast population that still had limited access to the public health system. This also included reforming financing in health care. The Rashtriya Swasthya Bima Yojana (RSBY), literally translated as National Health Insurance Scheme, that was introduced in 2005 was targeted to people below poverty line and was limited to hospitalisation which did not cover many catastrophic illnesses. The responsibility was on the state/provincial governments to implement the scheme. Several studies have shown that despite its launch and the government projecting it as a successful scheme, the ground realities were very different. These studies showed that private hospitals that were empanelled by the government to provide the insured under RSBY were actually excluding many cases and people were still making high out-of-pocket payments. Health insurance coverage is presently limited to only about 17% of the population unlike China that boasts of 95% coverage. There is no uniform insurance scheme that covers the population but a mix of several government and private insurance schemes across rural and urban areas and most of these cover only hospitalisation. Out of pocket expenditure is still approximately 60% of total health expenditure.

The total expenditure in health as percentage of the GDP is 5.6 and 4 for China and India respectively. Out of this, the public expenditure as percentage of GDP is 3.1 for China which has been steadily increasing, and a meagre 1.3 for India which has been static. These data clearly show how the Indian state has invested very little in health and suggest that health is not a priority within the government. China on the other hand has made it a political mandate and is consistently amending the systemic with the objective of making health services accessible to its people.

Having said this, both India and China face several challenges due to the complex health systems that are in place. There are regional and provincial disparities in access to health services and health outcomes that need to be addressed. The government needs to prioritise access to services for the poor, migrant and marginalised communities. Both countries have been preoccupied with curative services and there is a serious neglect of preventive services that is not integrated well with the system. This can be seen in the emergence of infectious diseases in both countries and the inability of the governments at the local levels to manage such outbreaks. While China reinstated its surveillance centres post-SARS and is seeking to strengthen its primary level care, India still has no preparedness or strategies in place to manage outbreaks. Presently, it is making unsuccessful attempts to curb a dengue epidemic in its national capital that shows the lack of preparedness and a weak primary level health care.

Madhurima Nundy is Associate Fellow with the Institute of Chinese Studies in Delhi, India. Image Credit: CC by Calcutta Rescue/Flickr.


  1. Get real people, you will get much more respect from others by accepting a professional doctors advice and learning the TRUTH about your bodies recovery and the help you can get from still a National Insurance system that we all pay into, opp’s sorry apart from the very special you!

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