Seminar on Macroeconomics and Health, Beijing, China, December 2002
The seminar on Macroeconomics and Health was well attended by some 150 professionals from China’s Ministries of Finance and Health, the State Development Planning Commission, Tsinghua University and China Health Economic Institute. Key individuals participating in the seminar were:
Mr Zhang Wenkang, Minister of Health, who delivered a special message on the CMH Report from China’s Premier Jiang Zemin. The Minister stressed that a healthy workforce was an important factor for China’s economic miracle and that the Government is now focusing attention on health as an important indicator for the country’s advancement. The Government has recently established various policies for the development of rural health care and health investment in 2003 will provide local governments with funds to improve coordination and implementation of health programmes. WHO and the international community are requested to play a bigger role in health development in China.
Dr Shigeru Omi, WPRO Regional Director, highlighted the need to increase health sector investment to spur China’s economic and social development. Dr Omi stressed that China has progressed in the last two decades but still needs to: strengthen health systems and investment, address equity issues and reduce regional disparities, improve public health financing and overcome the issue of out-of-pocket payments, and focus on the changing epidemiological and demographic patterns – the rise of HIV/AIDS incidence and chronic noncommunicable and tobacco-related diseases.
Professor Jeffrey Sachs introduced the Report on Macroeconomics and Health and highlighted three ways for improving China’s health status and economics development: Firstly, by identifying the key priorities and areas of intervention in a country of diverse regional burden of disease as well as financing these priorities. Secondly, by establishing social insurance schemes that would confront the high out-of-pocket spending on health. And thirdly, by addressing the need for a flexible health system that can adjust as new priorities emerge. Prof. Sachs continued with some observations on how CMH recommendations may be useful for China, emphasizing that the CMH follow-up process may be starting point for some thinking in macroeconomics and health. He noted the interesting nature of China’s macroeconomics experience. In the first period (1950-80,s) there was a tremendous gain in health and tremendous progress through a massive investment in primary health. China became famous for its rural primary health system and was admired for its immunization campaigns and for its attempts to reduce the incidence of hookworm. The economic boom came in the second period (1980 onwards); but the economic miracle would not have been possible without the health investment during the first period. However, many of the institutions that were important in the first 30 years for developing health care did not continue in the second period. To develop priorities and finance health care still lacking, China should now address:
- The rural poor in the western provinces.
- The floating/migrant populations that do not have health system coverage.
- The urban populations whose lifestyles make them prone to cardiovascular diseases, obesity, diabetes, and tobacco-related diseases.
China must also focus on specific issues, such as:
- Keeping the AIDS epidemic at a low level by making it a health priority, and establishing a good surveillance system to monitor the development of the epidemic. China is currently at a low level of the AIDS epidemic, but the epidemic could explode dramatically if appropriate steps are not taken. Like Brazil, China has a good case for manufacturing and supplying the Chinese and world market with anti-retrovirals (ARVs).
- TB remains untreated in many parts of the country and national TB programmes must be implemented (DOTS).
- In some regions, hook worm and malaria are important health challenges, but people do not get always proper treatment. Although some Chinese companies are producing artemisin, it is not always reaching the people who need it.
- There are major environmental challenges such as indoor and outdoor air pollution, toxic environmental pollution and polluted water supplies.
Prof. Sachs proposed seven areas of action for following up the Report:
- Identify health priorities through a systematic analysis of the burden of disease and health risks at different parts of the country.
- Identify interventions to address the specific challenges (for both prevention and treatment).
- Assess the costs of addressing these health challenges. Some government policies can result in raising revenue, such as taxing tobacco. This revenue can be used for public health care spending.
- Identify possible financing mechanisms for financing health care costs and examine other countries’ systems that could apply in China.
- Encourage China’s biomedical industry. Chinese pharmaceutical companies should produce ARVs for distribution among China’s HIV sufferers.
- Encourage the development of biomedical sciences in China which could be a major propellant of economic growth. Discovery of improved malaria cures, for example, through the use of traditional medicines (artemisin) is vital not only for China but also for other Asian and African countries with problems of rising drug resistance to established antimalarial drugs.
- Develop and strengthen public health institutions that focus on public health, surveillance and monitoring, operational research, and economic analyses.
Wang Dangsheng from the Department of Social Development of the State Development Planning Commission (SDPC) addressed some issues about macroeconomics and health development.
- One of the essential experiences of Chinese health services is to understand correctly the relation between health and the harmonious development of the economy. The SDPC which acts as the control department of the Chinese national economy states that economic development is a precondition for health development and in the last years large investment in health have been made (construction of blood stations in the whole country, organization of diseases prevention and control, rural hospitals and traditional Chinese medicines)
- The health sector will be faced with great challenges in the course of constructing a well-off society. China is entering the phase of rapid economic growth, improvement of living conditions for all, and developing both rural and urban areas (making steady progress in rural economy and accelerate process of urbanization). The state is planning the transfer of surplus rural labour to the non-agricultural industry and is actively pushing for the development of western provinces. Among these national reforms the state aims at political and cultural restructuring, constructing a social security system, civil education system, and health care system. Although infectious diseases are not a major public health threat, the state has to address the new rising infections (HIV/AIDS), improve equity and regional disparity, and deal with NCD.
- Accelerate the development of health services. The state must disseminate widely across the entire country the fact that health influences economic development. It must also put forward health reforms in a systematic way:
- put in place a basic medical insurance system;
- reform rural health care including disease prevention and control and health surveillance system;
- expand the coverage of the basic medical insurance system for urban employees;
- establish a new rural cooperative medicare system;
- resolve the problem of medical insurance for farmers;
- improve health administration system, service system and the operating mechanism of health organization;
- define the responsibility and scope of the government for administering health care, reorganise government functions in this respect and take into consideration market competition;
- carry out regional health plans and optimize the allocation of resources:
- put in place a systematic management system of health organization , and establish incentives and control mechanisms.
In addition to all the above, the state must increase health service investment in a continuous way across all government levels parallel to economic development, and broaden financing channels by absorbing social funds and private capital to invest into health care.
Sun Zhijun , Deputy Director General, Ministry of Finance (MoF) stated that the Government has been steadily increasing investment in health and is providing public health subsidies to the poor in the western provinces, particularly to address the challenge of infant mortality. To this end, the state has improved 82 per cent of children’s facilities (health and other). It is also developing new policies to confront the HIV/AIDS epidemic. The MoF currently provides subsidies to farmers for improving their household circumstances, and household facilities in the western provinces. It is planning to implement about 40 interventions linked to social and economic reforms including improved management and efficient utilization of resources.
Dr David Nabarro, Executive Director, World Health Organization, presented basic findings of the CMH Report and the CMH follow-up process in countries.
He highlighted the impact of the CMH Report:
- The Report helped to put health at the centre of development agenda
- It was endorsed by the World Health Assembly in May 2002
- The Report has had major impact at international events:
- The World Economic Forum held in New York, 2002
- The International Conference on Financing for Development, Monterey, Mexico, 2002
- The World Conference on Sustainable Development, Johannesburg , 2002.
Dr Nabarro summarized the key findings and recommendations of the CMH Report and explained that countries are moving forward with CMH follow-up work by:
- Analysing links between risks to health, ill health, human potential, economic growth
- Agreeing strategies that respond to the risks and illness, drawing on evidence and experience
- Setting up alliances around common goals, “widening the circle”
- Demonstrating the opportunities available; raising finance, finding the people and setting up the systems
- Undertaking research so as to do better.
Country action takes place in three phases:
- Phase 1: Preparatory phase (6 months)
- Phase 2: Planning phase (18 months) (to commence after the establishment of the NCMH or equivalent) leading up to the development of health investment plan
- Phase 3: Implementation phase (5-10 years).
The CMH follow-up strategy at country level is developed by :
- Preparing a long-term vision for the health of the nation
- Analysing the burden of disease –and risk factors – for different population groups
- Looking at non-health factors (water, sanitation, diet, nutrient security, activity)
- Identifying inter-sectoral strategies to address these issues
- Developing alliances to scale up health outcomes
- Identifying options for improving the capacity of health systems
- Locating financial resources; investing in human resources
- Measuring health outcomes and assessing value of actions taken.
Dr Nabarro outlined major themes for moving the CMH follow-up agenda forward:
- Secure the place of health within the development agenda
- Mobilize increased resources for health and for aid
- Clarify macroeconomic links and constraints
- Consider the broad range of policy options
- Seek agreement on the rebuilding of health systems
- Build human resource capacity
- Improve evidence base of needs and effectiveness (more CMH work-in countries)
- Prove the links between healthy labour productivity gains and macroeconomic growth
- Explain the links between cycles of ill health and sustained poverty
- Expand the Poverty Reduction Strategy process-not just for the poor, but also for the middle-income countries
- Mobilize funds needed for health.
Hu Angang, Director, Centre for China Study, Chinese Academy of Sciences and Tsinghua University presented arguments for addressing health in the macroeconomics perspectives of China. China is experiencing rapid economic growth, but its health indicators are lagging behind. He described the country’s challenges and suggested that these problems have had great impact on China’s macroeconomy and long-term economic growth. During the recent National Congress of the Communist Party of China, plans were put forward to address the development of the people’s welfare including health. During the recent National Congress of the Communist Party of China, plans have been put forward that address the development of its people’s welfare including health.
Hu Angang presented data on the country’s demographic, economic, social and health indicators (which can be provided upon request) with extensive analysis of the following issues:
- People are confronted with the ‘double burden of disease’. Great disparity of disease model exists between urban and rural people.
- Great gap exist in health development among different regions
- New health problems: the impact of HIV/AIDS in China
- Various health problems have affected China’s macroeconomy and long-term economic growth.
Hu Angang presented China’s health development objectives for the next 20 years which include:
- Improving access to health services: to ensure that everybody enjoys basic healthcare and to improve the quality of basic public health services.
- Ensuring that specific objectives of population and health are met: to realise the promise made by adopting UN’s Millennium Declaration on population and health.
- Controlling the spread of HIV/AIDS: timely control measures should be taken to prevent the increase of the infection.
- Popularizing health education, encouraging sports activities among the population and establishing a health care system of high efficiency, flexibility and availability.
Hu Angang stressed the importance of health in the development and said that the National Congress of the Communist Party of China was to put forward a plan for China’s development in the next 20 years for establishing a well-off society for China’s 1.3 billion people. The Government's function is to make full use of the limited health resources to improve public health services and to narrow the health gap among the rich and poor populations. To achieve this, the following should be accomplished:
- Governments at different levels should increase their input in public health services. In 2000, the health expenditure of China was 5.3 per cent of GDP.
- The direction of health expenditure is to be altered: the health resources are to be distributed effectively and the availability of basic health services to be increased.
- A new governance model for health services to be realized.
- Attract and make use of international aid.
Professor Cai Renhua, Director General, China Health Economics Institute presented information on the revision of the relationship between health sector development and the macro socio-economic developments as described in the CMH Report. A comparative analysis between CMH recommendations and practices in China was presented:
- The promotion of the health status of the poor and the increase of their life expectancy as per Millennium Development Goals (CMH Report).
- China is in the process of building health care delivery networks (figures given)
- The country is investing in poor rural areas (figures given)
- Focus public health funds on essential health care covering the whole population including the poor, from general tax revenue. Be aware of the negative impacts on access to basic health care by the poor when fee for service (FFS) and private health financing are employed. Set up accessible health care delivery systems and enhance health promotion actions in the community (CMH Report).
- China is in the process of increasing government financial input in health (figures given)
- Implementation of a Health Priority Strategy (CMH Report)
- China practises a ‘prevention first’ approach and address morbidity from infectious diseases, EPI coverage (85%), filariasis, and the control of measles, whooping cough, diphtheria, tetanus, polio, kala-azar, fluorosis and schistosomiasis.
The health priorities in China for the next two decades are to achieve:
- The Millennium Development Goals
- The 16th National Congress of the Chinese Communist Party Goals of overall well-off society.
Main health problems in China in the next two decades are expected to be:
- acute infectious diseases, disease burden of the malnourished, perinatal and endemic diseases.
- disease burden of ageing populations, rising incidence of noncommunicable diseases.
Analysis and prediction of total health expenditure in China (figures given)
Recommendations on the follow-up action plan:
- Establish a NCMH
- Strengthen coordination and communication between international organizations and China’s institutions
- Launch multi-department and multi-disciplinary research on the relationship between macro socio-economic development and health development.