China Health Care: the Link Between Income and Health

Last week, I had the pleasure of attending University of Michigan’s Center for Chinese Studied Noon Lecture Series.  Dr. Jersey Liang, Professor of Health Management and Policy at the School of Public Health and Research Professor at the Institute of Gerontology at the University of Michigan, delivered a lecture entitled “Socioeconomic Status and Physical Performance among Older Adults in China.”

In the background of China’s economic development, demographic transition, and epidemiologic transition, the health consequences from substantial income disparities among older Chinese have not been adequately studied.  Dr. Liang’s research hypothesis was that physical performance is positively associated with socioeconomic status (SES) not only at the individual level, but also at the household and community levels.  Dr. Liang, in collaboration with Shanghai CDC, used physical performance metrics (grip strength and gait speed) from the WHO Study on global AGEing and adult health (SAGE) as measures for functional impairment and limitation.  Similar to Activities of Daily Living, grip strength and walking speed provide predictive and objective measures of functional impairment and limitation.  Currently, there is a breadth of compelling evidence that people of lower SES (i.e. education, income, assets, occupation, etc.) have worse health in terms of chronic disease morbidity, disability, mortality, and so on.  Dr. Liang’s key findings were that SES on the individual, household, and community levels in China were all significantly associated with health, as measured by grip strength and gait speed.  Individuals with higher education had larger grip strength. Households with higher income sufficiency had larger grip strengths and faster gait speed.  Additionally, urban communities also had significantly greater grip strength and gait speed than those in rural communities.   While prior research has relied on self-reported measures, Dr. Liang’s research contribution involved performance-based measures.  

Attention to the link between socioeconomic status and health is particularly salient for a country like China, which has such a severe economic and geographic divide between urban-rural, coastal-inland populations.  An effect from transitioning towards a market-based economy and experiencing unprecedented economic growth has been a widening disparity in income.  From 1978-2004, income (GDP) per capita ratios for urban-to-rural and coastal-to-inland populations have steadily rose.  (Source: Huang et al., 2008)

As of 2012, China had a Gini coefficient of approximately 0.41-0.48.  Gini coefficient is a standard for statistically measuring income distribution (zero being perfect distribution).  The National Bureau of Statistics has not issued an official number in over a decade and many believe China’s wealth gap to be particularly underestimated due to underreported grey income.  A report by the Chinese Household Finance Survey Center of Chengdu’s Southwestern University of Finance and Economics estimated the coefficient to be 0.61, which would put China in the company of the world’s least equitable countries in the world, such as South Africa and Brazil. 

None of this, however, is to denigrate China’s economic development – Rural or urban.  China has pulled half a billion people out of poverty in the last few decades, and continues to grow.  The standard of living for nearly the entire country has increased and, for this reason, the Chinese have been mostly tolerant of the growing inequality.  Nevertheless, China’s GDP can no longer grow at double-digit levels.  Central and local governments will be faced with accomplishing targeted goals on potentially smaller budgets, all while maintaining social stability for a population that is becoming more accustomed to and increasingly demanding of comprehensive social services and economic opportunities.  Health-equity and income-equity concerns usually become exacerbated when countries experience stagnating or worsening economic trends. 

In a country that relies heavily on personal financing for health services, the current link between income and health is very important.   Last month, the Chinese government issued an official plan to reform income distribution.  The much anticipated, yet vague plan sought to reduce the country’s wealth gap and the growing public discontent.  The official plan was delayed several months due to internal conflict with banks and other SOE stakeholders.  Being a final product of the outgoing Wen Jiabao, we will have to wait and see how serious and adept the new administration will be at tackling this domain.

 As the government works on the arduous task of reducing income inequality, further development of health financing mechanisms will aid low-income populations in China accessing necessary health services.  Specifically, the New Cooperative Medical Scheme, which has grown to cover nearly the entire rural population of China, is an extremely encouraging apparatus.  While the current benefit package is still relatively shallow, increased funding to this public insurance program will “buy” the government time in reducing the wealth gap while improving access to low-income populations.

Finally, as more evidence comes out highlighting the impact of socio-economic status on individuals’ health, it is important to consider the policy implications of not just health policy, but all policies being developed by the government.  All policies, whether they’re directed at higher education, the environment, foreign investment, property rights, et cetera, have socio-structural implications on population health.  Chinese policy makers, like all policy makers, must be cognizant of health consequences when developing future strategies and solutions for the country. 

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