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Cablegate: Fujian Officials Describe Rural-Urban

VZCZCXRO2387
RR RUEHCN RUEHGH RUEHVC
DE RUEHGZ #0697/01 3560556
ZNR UUUUU ZZH
R 220556Z DEC 09
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 1201
INFO RUEHOO/CHINA POSTS COLLECTIVE 0393
RUEHBJ/AMEMBASSY BEIJING 0963
RUEHGH/AMCONSUL SHANGHAI 0318
RUEHCN/AMCONSUL CHENGDU 0319
RUEHSH/AMCONSUL SHENYANG 0328
RUEAUSA/DEPT OF HHS WASHINGTON DC 0059
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC 0121
RUEATRS/DEPT OF TREASURY WASHINGTON DC 0211
RUEKJCS/SECDEF WASHDC 0033
RUEAIIA/CIA WASHDC 0366
RUEKJCS/DIA WASHDC 0362

UNCLAS SECTION 01 OF 04 GUANGZHOU 000697

SENSITIVE
SIPDIS

STATE FOR EAP/CM, OES/IHA, MED
STATE PASS TO ENVIRONMENTAL SCIENCE & TECHNOLOGY
COLLECTIVE
STATE PASS TO USAID FOR ANE AND GH
HHS PASS TO OGHA, NIH/FIC, CDC/COGH
BANGKOK FOR RMO, CDC, USAID
BEIJING FOR HHS HEALTH ATTACHE AND RMO

E.O. 12958: N/A
TAGS: SOCI TBIO ELAB PGOV CH

GUANGZHOU 00000697 001.2 OF 004

SUBJECT: Fujian Officials Describe Rural-Urban
Disparities in Health Care and Insurance Coverage
(U) This document is sensitive but unclassified.
Please protect accordingly. Not for release
outside U.S. government channels. Not for internet
publication.

1. (SBU) Summary: Public health officials in
Fujian admit there are significant gaps in the
level of medical care and health insurance
protection available to Fujian residents. Farmers,
in particular, fare poorly in the type of
government health insurance coverage and health
care to which they have access. Rural areas suffer
from a severe shortage of doctors. Urban workers,
on the other hand, generally receive broader
insurance coverage, and they have access to the
best medical facilities and doctors. Urban
residents who are unemployed, work part-time, or
who are migrant workers or students fare have more
limited coverage. End summary.

Health Care Resources Concentrated in Major Cities
--------------------------------------------- ---
2. (U) To serve its population of approximately 36
million, Fujian Province has a total of
approximately 20,000 medical care facilities,
including hospitals, clinics and infirmaries.
Public health officials in Fujian frankly
acknowledge that the existing infrastructure cannot
adequately meet current demand and provide
comprehensive medical care to all of FujianQs
residents. Currently, medical resources and
personnel are concentrated in urban areas.
FujianQs top-grade (Grade III, A Level) hospitals
are all located in major cities. In addition to
major and specialized hospitals, the larger cities
have a network of almost 9,000 community hospitals,
clinics and infirmaries. For example, public
health officials in Xiamen noted that the city has
over 1,100 hospitals, clinics and infirmaries at
all levels. The city has three major hospitals and
two specialized hospitals of the top grade. In
addition, the city has over 20 government-funded
hospitals at the community level. Community
hospitals, clinics, and infirmaries provide basic
medical services to urban residents at a lower cost
than the major hospitals.

3. (SBU) Because they provide advanced levels of
care, facilities and expertise, major hospitals and
medical centers in urban areas attract both urban
and rural residents. The outpatient department of
the Fujian Provincial Hospital in Fuzhou reportedly
treats over 1.4 million patients on an annual basis.
Officials estimate that 30% to 40% of the patients
in Xiamen's general hospitals come from surrounding
rural areas. Public health officials told
ConGenOff that due to heavy demand for medical
services, all of Fujian's major hospitals are
forced to operate at maximum capacity around the
clock. Patients face long waits before they see a
doctor; although doctors spend only minutes on each
patient, the doctors still must put in long hours
to meet demand. Many hospital wards are filled to
overflowing with patients. Hospital officials say
that the challenge of meeting current demand
imposed by an ever-growing number of patients makes
it difficult and almost impossible to take steps to
improve the quality of medical services provided.

Doctors Avoid Rural Areas
-------------------------
4. (SBU) Although Fujian has over 10,000 clinics
and infirmaries that are located in rural areas,

GUANGZHOU 00000697 002.2 OF 004

SUBJECT: Fujian Officials Describe Rural-Urban
Disparities in Health Care and Insurance Coverage
(U) This document is sensitive but unclassified.
Please protect accordingly. Not for release
outside U.S. government channels. Not for internet
publication.

these clinics and infirmaries generally provide
only basic medical care, i.e. treating minor
ailments and injuries. Serious cases are almost
always referred to larger hospitals in urban areas.
Many rural residents are not covered by existing
health insurance systems (see below) and,
consequently, are reluctant to use the local
clinics and infirmaries even for minor ailments and
injuries. According to a rural doctor in FujianQs
Pingnan County, most rural residents do not receive
adequate health care. For cost considerations,
they seldom visit a doctor or pharmacist, even if
they do not feel well, and they almost never
receive regular physical exams. Rather, they
generally try to "endure the pain" and hope that
any discomfort will go away. Alternatively, they
may go to a rural drug store and, without
professional medical advice, select a medicine that
looks like it may be useful. This rural doctor
noted that due to lack of adequate preventative
medical care, many rural residents develop advanced
stages of severe illnesses including cancer,
diabetes or hepatitis before they receive any
medical treatment. In many cases, by the time they
receive medical care, it is too late.

5. (U) For lack of business, many of the rural
clinics and infirmaries operate at a deficit.
Because doctor salaries depend heavily on the
number of patients a doctor sees, most of the rural
clinics and infirmaries are unable to offer
competitive salaries. Consequently, many rural
areas are unable to attract skilled medical
personnel. Public health officials in Xiamen noted
that in order to help remedy this problem, they
have begun to link job promotion opportunities at
urban hospitals with a requirement that candidates
seeking promotion serve for specified periods of
time in rural areas. Nonetheless, rural areas
continue to experience a severe shortage of skilled
medical personnel.

Limited Health Insurance for Farmers
------------------------------------
6. (U) Government health insurance coverage varies
from locality to locality. Most of the government
plans are based on a complex tiered system offering
varying levels of coverage for outpatient and
inpatient care depending on whether an individual
is an urban or rural resident, or a migrant worker.
Rural residents, in general, receive very little
coverage. Farmers who are able to pay a small,
fixed premium annually receive coverage for some
inpatient expenses but not for outpatient costs.
In Xiamen, average annual income for rural
residents is approximately US$ 1,240 and the annual
premium for farmers and migrant workers is 200 RMB
(US$ 29), of which the individual must pay 50 RMB
(US$7) and the Xiamen government subsidizes the
remaining 150 RMB (US$ 22). When it comes to
hospitalization costs, insured rural residents,
like urban residents, still must pay the first
1,000 RMB (US$ 146) of inpatient costs. Afterwards,
the government covers 70% of the costs up to 5,000
RMB (US$ 732). If expenses exceed 5,000 RMB, rural
residents must cover the expenses on their own
unless they qualify for government funding
available for specified, severe illnesses or become

GUANGZHOU 00000697 003.2 OF 004

SUBJECT: Fujian Officials Describe Rural-Urban
Disparities in Health Care and Insurance Coverage
(U) This document is sensitive but unclassified.
Please protect accordingly. Not for release
outside U.S. government channels. Not for internet
publication.

the beneficiary of an NGO that helps individuals
with severe cases.

7. (U) Throughout Fujian, the outpatient expenses
of rural residents are not covered by the
government medical insurance. As noted earlier,
because rural residents must pay all of the cost of
outpatient treatment on their own, many opt not to
go to the clinics or infirmaries to receive
preventative or primary medical care. When rural
residents do seek outpatient medical care, they try
to avoid the larger hospitalsQthe very hospitals
possessing advanced diagnostic capabilitiesQ where
outpatient charges are higher than at smaller
clinics and infirmaries.

Better Coverage for Urban Workers, But Still Gaps
--------------------------------------------- ----
8. (U) Urban residents with employers who
contribute to the government health insurance plan
qualify for both outpatient and inpatient health
insurance coverage. Subject to certain limitations
and a co-payment requirement of 20%, outpatient
medical charges are generally covered in full.
Medical insurance reimbursement rates depend, in
part, on the category of hospital the patient
visits. In order to encourage more people to visit
smaller, community level hospitals, the
reimbursement rate provided for medical expenses at
the smaller hospitals is higher than the
reimbursement rate provided for expenses at major
hospitals. Urban workersQ inpatient medical
expenses up to 5,000 (US$ 732) RMB are covered in
the same manner as they are for rural residents
(described above). However, urban workers with
inpatient medical expenses in excess of 5,000 RMB
up to 50,000 (US$ 7320) RMB are entitled to tap
into the government medical insurance pool. This
is a significant benefit that is not available to
rural residents, migrant workers or non-employed
urban residents. No government insurance is
available to cover costs in excess of RMB 50,000.
Individuals may subscribe to private insurance
plans to cover these catastrophic health costs.

9. (U) Urban residents who work only part time
must pay an annual premium of RMB 300 (US$ 44), of
which the Fuzhou government offers a subsidy of 150
RMB (US$ 22). Students pay a premium of RMB 100
(US$15), of which 60 RMB (US$ 9) is subsidized by
the city government. This provides insurance
coverage for limited inpatient treatment only.
Outpatient coverage is not provided. The
government will provide full reimbursement for
accident-related expenses of students. The
government also will fully reimburse allowable
fertility-related medical expenses. Part-time
workers, like rural residents and migrant workers,
are not eligible to tap into the governmentQs
medical insurance pool to cover inpatient costs in
excess of 5,000 RMB (US$ 732). To help patients
with financial hardships, some hospitals have
offered lower-cost options including Qlow cost beds
that are often placed in corridors and Qzero profit
medicines.

10. (SBU) Although employers are obligated to make
contributions to the government insurance plan on

GUANGZHOU 00000697 004.2 OF 004

SUBJECT: Fujian Officials Describe Rural-Urban
Disparities in Health Care and Insurance Coverage
(U) This document is sensitive but unclassified.
Please protect accordingly. Not for release
outside U.S. government channels. Not for internet
publication.

behalf of migrant workers, migrant workers
generally receive coverage that is limited to
inpatient medical care. Even though contributions
have been made to the locality (where the migrant
laborers are working) medical insurance pool on
their behalf, migrant workers are not eligible to
tap into the pool for inpatient expenses that
exceed 5,000 RMB (US$ 732). This is because the
migrant workers are not officially registered as
living in the locality. Comment: The inability of
migrant workers to tap into the local insurance
pools means that contributions made on the migrant
workers' behalf become de facto "donations" to the
locality's insurance pool. Although a number of
individuals have raised complaints about the
unfairness of this system, the insurance pool
system continues to operate in a manner that
exploits migrant workers. End comment.

Looming Need for Medical Care and Insurance Reforms
--------------------------------------------- ------
11. (SBU) Comment: Despite China's supposed
socialist underpinnings, health care today is not
provided to the masses in an egalitarian manner.
The current system favors the urban workers whose
contributions fund the system; even these residents
often feel compelled to save substantial sums to
cover catastrophic health care expenses. Rural
residents, often of limited economic means, are
largely neglected by the insurance regime. Among
the beggars and panhandlers on China's streets, it
is not unusual to see individuals, pleading for
donations, who bear placards detailing
circumstances describing urgent medical needs for
which the individual and her/his family are unable
to pay. Of the myriad possible sources of
discontent on the part of ChinaQs rural population,
lack of access to adequate health care remains a
leading possibility. End comment.

GOLDBECK

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