Market reforms and China's health care system.

This paper provides an overview of the medical care system in the People's Republic of China, and assesses the impact of market reforms on the evolution of the medical care system. There is clear indication that China is moving towards a 'prepaid' system closely related to the HMO of the west. Decentralization of the medical care system administration has paved the way for a diversity of local experiments with different ways of reform, but the main direction is towards a integration of decisions over medical services and the insurance function. It is argued that reforms in this direction, while retaining a degree of socialization, will improve the efficiency and equity aspects of the Chinese medical care system.