China's medicare reform is not market-driven, but has to be led by the government, according to health officials.

China is in need of establishing a government-led medicare system, supplemented by market through reforms, said Liao Xinbo, deputy director of the Guangdong Provincial Health Department, at a national annual meeting on private hospital management held in Guangzhou, the capital of Guangdong.

Unlike the United States and a few other rich nations, where people's annual average medicare spending reaches up to US$5,000 , China cannot bring the people a heavy medicare burden, as its per capita GDP is only about US$1,000 , he said.

Instead, he added, China has to take for reference the medicare system of Britain and Canada, where the government covers the medicare expenditure for their people and funds all public hospitals.

Many hospitals and health officials regard the reform, starting in 2000, as the ownership privatization or getting rid of the government burden, acknowledged Yu Zonghe, former director of the Department of Medical Administration under the ministry.

Those profit-driven hospitals and most privately-funded hospitals always regard profit-making more important than treatment, thus causing disputes and social problems, instead of helping people getting easier and cheaper medicare service, he said.

Therefore, the Ministry of Health has begun regulating the reform of hospitals by clarifying the point that medicare service should be public welfare and directed by the government, according to vice minister Ma Xiaowei.

"Medical and health work is a matter of life and health of the people, and unlike enterprises, its reform has to be guided by government instead of market," Ma said at a recent meeting, which was attended by provincial and city-level health officials.

According to Liao, the ministry has stated distinctly that reform of ownership is not a crucial part of the urban medicare reform, implying that the ministry is getting more cautious with the hospital ownership change.

"We have reminded those who fund private hospital of possible policy change in the reform when referring to the government's attitude," said Zhao Chun, who in charge of private sector under the Chinese Hospital Management Society.

Chen Tingliang, president of privately-funded Ren'ai Hospital in Jiangmen of Guangdong Province, acknowledged that he now hesitates to increase investment in the hospital. "I will wait and see," he said.

(Xinhua News Agency June 21, 2005)