Medical insurance reform has been initiated in 88 percent of the 349 regions targeted under the reform plan.

China's ongoing reform of its decades-old social security system, has achieved remarkable results, said the Ministry of Labour and Social Security.

The past six months saw a roughly 16 percent rise from the 43 million people who had enrolled in the medical insurance programme.

The Ministry of Labour and Social Security is planning to extend medical insurance to at least 80 million people by the end of this year.

Vice Minister Wang Dongjin said the reform is running smoothly, with medical insurance funds achieving a balance between revenues and expenditures.

The reform of the healthcare system and mechanisms for drug distribution should be given equal attention, Wang emphasized.

Medical insurance funds should be used efficiently to avoid unnecessary medical expenditures and ease patients' financial burdens, Wang said.

He also called for establishing a multi-level medical healthcare system to cover all citizens, including those living in extreme poverty.

China's free medical care system was launched in the early 1950s, immediately after the founding of the People's Republic of China.

But the system, which has many loopholes, has become less than utopian in recent years trying to provide for a huge population base and cover skyrocketing medical expenses.

Since the old healthcare system placed no limits on medical expenditures, many people who were entitled to government-paid care sought expensive and unnecessary treatments. In addition, some doctors prescribed more medicine than needed to earn kickbacks.

Meanwhile, employees of poorly-managed enterprises could not afford even basic medical services as their employers were unable to foot the bills.

To feed this irrational and inefficient healthcare system, both enterprises and the State have had to plough large amounts of money into the system every year, putting a heavy burden on many enterprises.

In 1994, the State Council launched pilot reforms in Jiujiang of Jiangxi Province and Zhenjiang of Jiangsu Province in East China.

So far, many cities, including Beijing, Shanghai and Shenzhen, have established medical insurance reform programmes.

The reform packages vary among regions, but the theme is the same -- to build a new pay mechanism in which employers, employees and the government all share medical expenses.

Clearly, the advantage of this system is that more people are able to enjoy financial coverage for medical treatments.

Polit trials prove feasibility

1994: Medical insurance reform was launched in Jiujiang of East China's Jiangxi Province and Zhenjiang of East China's Jiangsu Province.

1996: The pilot project was extended to over 40 cities across the country.

1998: The State Council required the establishment of a basic medical insurance system for employees in cities and towns, and clearly identified the goals, principles, policies and guidelines for the system.

(People's Daily 08/15/2001)