The central government is expected to take a much more cautious approach than what most people expected in improving public healthcare and medical treatment services in rural areas.

The priority attention given to rural problems in the government work report tabled at the Second Session of the 10th National People's Congress might have left many citizens overly optimistic.

In reality, the "spring" of medical service for rural people is still far away.

The cautious attitude and actions on the part of the central government are a result not only of those long-existing problems, but also some new puzzle revealed by a pilot project aimed at establishing a joint cooperative medical insurance.

Since last year the central government has allocated 10 yuan (US$1.2) annually to every rural resident in central and western China to help them join the new insurance scheme.

The plan, which will also collect 10 yuan (US$1.2) for each rural resident from local governments and the same amount from each rural resident, is aimed at finding a way to help poverty-stricken rural residents afford expensive medical treatment for serious illnesses.

The pilot project has been launched in dozens of counties.

However, what the governments have learned from the year-long practice and the unexpected outbreak of SARS (severe acute respiratory syndrome) may make the central government even more cautious this year.

There are still many barriers before a viable system of medical insurance can be worked out for the rural areas.

In fact, before the opening of this year's NPC session, Vice-Premier Wu Yi delivered a speech calling on governments at various levels to do the pilot work in a down-to-earth way, without mentioning expanding the project to more regions.

Although promising to gradually establish a new rural insurance system in his government work report, Premier Wen Jiabao did not reveal a specific timetable.

In contrast to the cautious stand the central government may take this year, some provincial governments have made very ambitious plans aimed at enabling the system to cover all rural residents in their provinces in a few years.

One important reason for such an active attitude from local governments is that many counties with financial burden have received funding from the higher-level governments.

Some valuable experience has been gained in the pilot counties, but at the same time new difficulties have emerged, said Huo Jinhua, an NPC deputy from Central China's Henan Province.

Huo, also vice-mayor of Jiaozuo, said the letters of praise from rural people that have been received by the county government are about the medical insurance which helped them overcome major financial hurdles in seeking treatment for serious illnesses.

However, the present insurance system still faces a chronic shortage of funding.

Due to the low income of farmers and the tight local financial conditions, only a limited portion of the farmers' medical costs for serious illnesses -- usually not more than 50 percent -- can be covered by the system.

Meanwhile, the insurance system can't provide coverage for the 90 million farmers-turned-workers in urban areas, said Huo.

If these migrant workers receive medical treatment in urban hospitals, which usually charge much more than their rural counterparts, the present insurance system supported by rural financing will be unable to afford the burden, Huo said.

Moreover, some policies now are clearly in conflict, and may bring new trouble to the system.

For example, rural people must go to big hospitals in counties or even cities, which own the majority of the country's medical resources, for better treatment of their serious illnesses.

However, many of these hospitals are being encouraged by the government to become profit-making enterprises and usually charge dearly.

Meanwhile, the system does not cover treatment for common illnesses, which must be fully paid for by the rural residents themselves.

However, hospitals located in towns, which should have access to government funding and are responsible for treating common diseases and providing direct public healthcare to rural residents, have fallen into bad circumstances.

Due to poor investment from town governments, the absence of good doctors, obsolete equipment and lack of outpatient and in-patient facilities, most of China's 50,000 town-level hospitals are unable to make ends meet.

One bad result is that many town-level hospitals have become privatized. The village doctors, who are under the management of the town-level hospitals and are a main channel for rural people to get common medical treatment and healthcare, have also become a tool of the town hospitals to make money by selling expensive medicines.

China's reform aim is to have all town-level hospitals State-owned and totally supported by governments in order to ensure they can fulfill their responsibilities.

However, as Huo stated: "If we need a 200,000 yuan (US$24,400) investment to equip just one town hospital and make it able to fulfill its role, as a whole it will be a big amount and a heavy economic burden for governments."

(China Daily March 17, 2004)