The current medical insurance system was based on the free medical care and labor insurance system established in the early 1950s, under which medical expenses incurred by workers and staff are covered by the state. This system has played an important role in guaranteeing the health of workers' and staff members, promoting economic development and safeguarding social stability. In the wake of China's economic development and the deepening of the economic reform, defects in this system have gradually emerged. The rapid increase in medical expenses has brought a heavy burden on the state and some enterprises. At the same time, a lot of medical resources have been wasted. But in the countryside, only a few well-off regions provide free medical care, while in other regions medical expenses are paid by the local people themselves. So reform of the medical services system is a matter of urgency.

The compensation mechanism of medical institutions has to be straightened out in the course of the reform of the medical and health care system for urban workers and staff. This means that the medical insurance system should be both socialized and localized. Medical expenses should be rationally allocated among the state, units and individuals. In the countryside, a cooperative medical service system should be further promoted and perfected. Organized and led by the government, the cooperative medical service system is run by the local people and subsidized by the state. Peasants take part in it voluntarily. The funds come mainly from peasant households, collectives and the state. In this way, basic medical services can be guaranteed in the countryside and the danger of rural people becoming impoverished because of illness can be averted.

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About Medical and Health Work

. The Establishment of the Rural Health Service Network . Reform of the Medical and Health Care System . Disease Prevention and Treatment . Maternity and Child Care . Traditional Chinese Medicine (TCM)and Pharmacology

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