The Financing and the Economic Efficiency of Rural Health Services in the People's Republic of China

Abstract

This paper studies the resource allocation in the provision of health care services at the local level in the People's Republic of China. The subject of health financing and the effectiveness and cost of this medical cooperative service in the country's rural areas are evaluated. The conclusion drawn is that, with China's agricultural economic framework, the adoption of barefoot doctor services and the promotion of herbal medicine are cost-minimizing approaches that enable local political units to be financially self-supporting with regard to medical services. Based on a few samples at brigade or commune level, the results indicate that the barefoot doctor services are economically valuable. Furthermore, the sense of security and a point of entry into the health care system that the barefoot doctors can provide for lower-income peasants are by no means a minor noneconomic benefit. Some of their experiences may be useful to other developing countries.