Creaking at the Seams

China’s fragmented healthcare system and rapidly ageing population

China’s public healthcare system is now struggling to meet the increasing demand for quality healthcare among the country’s citizens. Several factors, including a rapidly ageing population and relatively slow growth of the private healthcare sector, are contributing to the problem. Jessica Louise Lindeman of Pacific Prime explains the specifics and roots of China’s healthcare fragmentation issue, and looks at some possible solutions.

China’s ageing population

China’s population is growing old at a faster rate than most other countries. The results of China’s 36-year one-child policy (1980–2015), combined with substantial improvements in healthcare, have contributed to life expectancy rising from 67 to 75 years old, as well as a declining birth rate, in that period.

In 2017, the proportion of Chinese citizens above the age of 60 was 17.3 percent – that’s approximately 241 million people. If the current trend continues, China’s elderly population will reach 1.44 billion by 2029, and the country will enter negative population growth, according to a study by the Chinese Academy of Social Sciences.[1] This will burden the local fragmented healthcare system, which is already under mounting pressure as it tries to cope with the elderly population’s medical needs.

The specifics of China’s fragmented healthcare system

The fragmentation of China’s healthcare system has its roots in the nation’s belief that the bigger the hospital, the better quality healthcare patients will receive. Chinese citizens know that only in top-tier cities can they expect well-trained staff and modern medical equipment, as opposed to the rural community centres that only have basic care available. However, waiting times in top-tier medical centres can be immense. Such facilities deal with almost 20 per cent of the country’s outpatient consultations yearly.

What’s more, almost 950,000 low-tier hospitals, community health centres, and clinics are struggling to attract patients due to the belief held by many that such facilities provide low quality healthcare. This might have some truth in it, as indeed, only the top-tier hospitals in China receive grants for medical research and equipment. What further compounds the issue is that the country is suffering from an inadequate number of experienced specialists available per patient; China only introduced a residency training programme for new medical school graduates in 2014. Previously, new doctors didn’t have many opportunities to gain the necessary clinical experience, hence did not inspire trust among patients.

The slow growth of the private medical sector is another important factor contributing to the overburdening of China’s public healthcare system. Adding to the equation is the silver tsunami; as the elderly population increases, the number seeking specialist care—often for chronic conditions—will put further pressure on the system. This alone will have a significant impact on healthcare costs;[2] if medical treatment prices continue to increase, only affluent Chinese families or those with private health insurance will be able to afford treatment.

The antidote to China’s fragmented healthcare system

The fragmented nature of the public healthcare system adversely impacts its quality, cost, and outcomes for patients. In addition to the increased demand for specialist care among the ageing population, certain actions have to be taken to control and improve the current state of healthcare. The question here is: what measures should be taken to achieve this?

Improvements required in China’s overall quality of healthcare

One of the reasons China’s rural and community health centres have a poor reputation is because of the lack of well-trained physicians available. The global standard of the recommended amount of doctors per 1,000 citizens, as per guidelines from the Organisation for Economic Cooperation and Development (OECD),[3] is set at 3.4, whereas in China, there are only 1.82 general practitioners per 1,000 citizens. Among the three million licensed doctors in China, only about 60 per cent have undergraduate degrees and only around 10 per cent have graduate degrees. In the US, on the other hand, most doctors have at least a master’s degree.

Growth of the private healthcare sector to increase competitiveness

One way to increase the number of highly-skilled medical professionals in the country is to allow the private sector to grow. Private facilities focus on the quality of their service and their staff by either hiring already experienced doctors, or offering training opportunities to locally hired staff. This creates healthy competition and allows public facilities to learn from their private counterparts. Better trained and more experienced doctors tend to their patients better, and in turn, contribute to the effectiveness of the treatments and better utilisation of hospital beds (e.g. shorter stays).

Patient-centred and population health focus

Ensuring patients have trust in entering and getting health information from multiple points of entry is crucial. All healthcare providers can start with respecting and responding to individual patient preferences, needs, and values – this includes having the competence to inform patients about all clinical decisions, and allowing them to participate in those decisions. Focusing on the patient first and allocating resources and services to match their needs, as well as working towards improving the overall health of the population, including prevention initiatives, is necessary to address the needs of China’s ageing population.

Pacific Prime China is an insurance intermediary offering local and global insurance solutions, and a wide range of health plans covering individuals, families, and businesses. Our experienced consultants advise our clients in more than 28 languages by comparing and customising plan benefits to fit every client’s individual needs and budgets. From our Shanghai and Beijing offices, we can offer comprehensive advice which encompasses policy selection, claims handling, administration, and policy renewal.

[1] Wang, Guangzhou, ‘Two-child Policy’ to Tackle Ageing Population, Chinese Academy of Social Sciences, 1st August 2015, viewed 28th August 2019, <>

[2] Skrybus, Elwira, What is the Cost of Health Insurance in China in 2018, Pacific Prime, 24th September 2018, viewed 28th August 2019, <>

[3] Health at a Glance: OECD Indicators, Ministry of Health Israel, 2017, viewed 28th August 2019, <>