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China: Rural Healthcare Guidelines

(Nov. 2, 2007) On September 10, 2007, China's Ministries of Health and Finance and the State Administration of Traditional Chinese Medicine jointly issued new guidelines on the management of the rural cooperatives' medical program, which was inaugurated in 2002. Under the existing scheme, the central and local governments contribute 40 yuan to an insurance fund for each farmer who voluntarily pays 10 yuan annually (about US$1.30) into the fund. Members of the plan can apply to have up to 20 percent of inpatient fees refunded should they require medical care, but outpatient care is apparently not covered "in the majority of areas." (Shan Juan, Govt Adds Clarity to Health Scheme, CHINA DAILY, Sept. 26, 2007, available at

Under the new guidelines, provincial governments would be given more information on how funds should be allocated in order to facilitate their implementation of the program, and they are called upon to gradually expand their coverage to include outpatient care as well. The guidelines stipulate that the fund is to be used only to subsidize farmers' medical bills and not for financing other public health programs; that the percentage of reimbursed fees should be balanced across rural areas nationwide; that the percentage of the fee that the farmer is entitled to reclaim is always made clear; and that reimbursements be made on the spot. In addition, the guidelines call for the cost of giving birth at a hospital to be covered and for a free check-up to be awarded to plan members who make no claims upon the fund during a 12-month period. The government reportedly allocated 9.4 billion yuan (about US$1.25 billion) to the fund in June 2007. (Id.; Guanyu wanshan xin xing nongcun hezuo yiliao tongchou buchang fang'an de zhidao yijian, Ministry of Health Web site, Sept. 25, 2007.)

In addition, it was reported on September 20, 2007, that the China Development Bank (CDB), starting from 2008, will have each of its branches set aside five percent of its annual loans for rural health projects, with a focus on establishing clinics in impoverished areas and providing low-cost medical equipment and basic pharmaceuticals to health agencies in such regions. The loans issued will amount to more than five billion yuan (about US$665 million) and affect most of China's 1,500 counties, the CDB's governor Chen Yuan was quoted as stating. (CDB to Extend Billions [sic] Loans for Rural Health, XINHUA, Sept. 20, 2007, available at