World Bank for China healthcare reform

A series of structural changes to China's current healthcare system could save Asia's largest economy up to 3 per cent of GDP, says a study.

Conducted jointly by the World Bank Group, the World Health Organization and Chinese government agencies, the report suggests China take ten years to fully implement changes, including bolstering its primary care system and allowing private sector players fair competition with the public sector.

Without such measures, the World Bank projects that health expenditure in China will increase in real terms from 3.5 trillion yuan ($529 billion) last year to 15.8 trillion yuan in 2035, and from 5.6 per cent of GDP to 9.1 per cent in the same time frame, according to the report.

In recent decades, China has made efforts to improve healthcare access, extending a basic public health insurance network to virtually all of its people in some form since 2009. But public hospitals are overwhelmed by the task to treat close to 90 per cent of patients for conditions ranging from the common cold to terminal cancer.

The report "makes a strong case for a new model that would both improve quality and save the economy up to 3 per cent of GDP," Jim Yong Kim, president of the World Bank Group, said in a conference call. "We're confident that these reforms will help China build a strong foundation to create a healthier population, which will be an engine for job creation and sustainable economic growth in China."

Hospitals still rely on medicine sales for revenue, creating skewed incentives for doctors to over-prescribe.