The Chinese government's plan for reform of the country's health service was opened up for a one-month public debate on Oct. 14. By Nov. 24, more than 35,000 comments and suggestions have been received.

Growing public criticism of soaring medical fees, lack of access to affordable medical services, poor doctor-patient relationships and low medical insurance coverage, compelled the government to launch the new round of reforms.

"The principle reason for the problem of inadequate and expensive medical services is low government expenditure on public health," Lai Pingyao, professor and director of the International Development Research Center, University of International Business and Economics (UIBE), told China Business Weekly.

From the late 90's to today, government expenditure has hovered between 15 to 18 percent of total health spending, the equivalent of 1 percent of GDP. Government expenditure on public health in developed countries averages around 8 percent of GDP. Inadequate government financial support has led to a change in the nature of hospitals, from institutions that "heal the wounded and rescue the dying" to organizations that "seek profits above all and provide medicine and medical services as expensively as possible."

The average wage of a doctor in small and medium-sized cities is 2000 to 3000 yuan; lower than the average wage in big cities like Beijing and Shanghai, where doctors are paid between 4000 and 8000 yuan a month, mostly made up of bonuses earned by prescribing unnecessary and expensive medicines.

Doctors' income in a public-owned hospital is linked to how much additional revenue they earn for the hospital. This situation is not found in any other country in the world. But the draft reform plan side-stepped the issue of how to return hospitals to their original mission of "healing the wounded and rescuing the dying." Such a change is impossible unless public expenditure is raised, said Lai.

Professor Lai wants the government to increase its spending on public health to 3 percent of GDP. "We can do a simple calculation. 720 billion yuan, 3 percent of 2007 GDP, could pay for necessary fixed capital investment, and provide 6 million medical workers an annual wage of 60,000 yuan, a little bit higher than the average wage in Beijing and Shanghai."

Lai said that in 2007, government investment in infrastructure and real estate was over 2 trillion yuan, 10 times the expenditure on health. In developed countries, expenditure on these two items is more or less the same.

Governments in developed countries spend much more on public health and much less on administrative and economic construction than the Chinese government. The solution is to cut spending on administrative and economic construction and increase spending on social welfare, such as education and public health, said Lai.

(China.org.cn by Zhang Yunxing, December 8, 2008)