As China continues its remarkable economic growth in building an overall well-off society, the importance of health economics and management needs to be better understood.

"The country has achieved tremendous progress in economic development and opening-up since 1978, but it still faces some social problems, especially in terms of human development," pointed out Lin Yifu, director of the China Center of Economic Research under Peking University, at an international forum on health economics on Monday.

Over the past quarter of a century, the Chinese economy has maintained an amazing average annual growth of 9.3 percent. But the country's performance remains fairly poor measured by the United Nations Development Program's Human Development Index, which emphasizes life expectancy, educational attainment and adjusted real income.

"In comparison with other countries in the world, China is confronted with a far more challenging medical problem," noted Liu Guo'en, chairman of the newly inaugurated Department of Health Economics and Management with Peking University.

A basic fact is that China raises one-fifth of the world's population with only 2 percent of the world's medical resources.

The serious inadequacy of funds in the country's healthcare system, of course, entails more social investment.

But a more pressing issue China urgently needs to address is the uneven distribution of medical resources between urban and rural areas.

On the one hand, in rural areas, farmers are still often reduced to poverty because of various diseases. On the other hand, it is extremely difficult to raise funds for the rural healthcare system.

The country had adopted some low-cost but effective measures like "barefoot" doctors and cooperative healthcare programs to provide needed medical services in rural areas in the 1960s and 1970s.

Those practices disappeared as the country shifted from central planning to a market economy in the past two and a half decades. But under current conditions it makes no sense to resume those old methods.

"Therefore, it is imperative for the country to promote research on health economics and health policy to achieve the most efficient distribution and use of limited medical resources," said Liu, the department chairman.

Unlike standard economics, health economics emphasizes equity over just efficiency.

On average, nationwide and worldwide as well, every year as much as 30 percent of the populations who are enjoying good health do not have to spend money on medical care. Meanwhile, the 1 percent of the population most eaten up with diseases will consume 30 percent of the total expenditure on medical care.

Obviously, such a healthcare system will deprive many patients of chances to recover and compete with others on equal footing.

"It is misleading to pursue health for the pursuit of economic development," argued William Hsiao, a professor of health economics with Harvard University.

As an international leader in the field of health economics, Hsiao urged China to rethink the purpose of its health policy before carrying out reforms in the healthcare system.

"Health is related to economic progress, but health is also a key foundation of happiness which is one of the top goals of human beings," added Hsiao.

(China Daily December 10, 2003)