Progress and Challenges of the Rural Cooperative Medical Scheme in China

Problem: During China's transition to a market economy in the 1980s and 1990s, the rural population faced substantial barriers to accessing health care and encountered heavier financial burdens than urban residents in paying for necessary health services.

Approach: In 2003, China started to implement a rural cooperative medical scheme (RCMS), mainly through government subsidies. The scheme operates at the county level and offers a modest benefit package.

Local Setting: In spite of rapid economic growth since the early 1980s, income disparities in China have increased, particularly between rural and urban populations. In response, the government has put greater emphasis on social development, including health system development. Examples are the prioritization of improved access to health services and the reduction of the burden of payment for necessary services.

Relevant Changes: After 10 years of implementation, the RCMS now provides coverage to the entire rural population and has substantially improved access to health care. Yet despite a drop in out-of-pocket payments as a proportion of total health expenditure, paying for necessary services continues to cause financial hardship for many rural residents.

Lessons Learnt: In its first decade, the RCMS made progress through political mobilization, government subsidies, the readiness of the health-care delivery system, and the availability of a monitoring and evaluation system. Further improving the RCMS will require a focus on cost containment, quality improvement and making the scheme portable.