Connect to share and comment

The China syndrome: urban health care

Need an appendectomy from a Beijing hospital? $34, please.

Editor's note: While the health care reform battle rages in Washington, D.C., China has been quietly revamping its own massive health care system — with decidely mixed results. In this three-part special report, Kathleen E. McLaughlin and photographer Sharron Lovell tracked the results on both urban and rural residents.

BEIJING — The price list at a top Beijing hospital explains a lot about what is wrong with China’s health care system: An appendectomy by a leading surgeon, available to any Chinese citizen, costs only $34.

This is not because the doctors or the equipment come cheap — Peking University People’s Hospital attracts the top medical talent in the country. It has the seventh highest-paid doctors in China and imports cutting edge technology from around the world. The low cost of surgery is not because the communist government makes up the funding gap between patient prices and the actual cost of care.

Instead, it is simply because the central government set a maximum hospital rate 20 years ago in an attempt to guarantee health care access to all citizens. It hasn’t allowed them to be raised since, despite China’s massive economic growth, increased personal income and rising inflation. In short, that $34 doesn’t cover much and the costs are made up in other ways.

“Over the past 20 years, this has created a deficit for us,” said Wang Shan, president of the hospital and a professor of surgery. As a result, China’s hospitals and other medical centers have turned to other means to make money and improve their quality. While prices are capped on most services, they are allowed to make profits on prescription drugs — a measure critics say has led to rampant over-prescribing of often unneeded medication, causing problems in personal and public health. Testing and diagnostics, where there is room to profit because much has been invented and perfected since price caps were imposed, also leave room for money-making and potential overuse.

With so many pressures on making money to fund the business of health care, Wang is constantly looking for new ideas. He is trying to use new western management techniques to make things more efficient at the People’s Hospital, even while attracting new doctors and improving the quality of care. But the core problems remain, and even though this is the mega-urban capital, many of the critical issues facing this hospital trace back to the total breakdown of China’s rural health care systems.