How does China's healthcare system fuel its poverty alleviation campaign?

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By CGTN’s The Point

Over 68 million people have been lifted out of poverty over the past five years in China. That’s an average of 37,000 people every single day. However, over 30 million people are still living in extreme poverty.

“What the government means by a targeted poverty alleviation effort is to craft personalized poverty alleviation measures aimed at helping individuals stuck in various situations－health for example,” said CGTN reporter Tao Yuan in Chengdu, southwest China’s Sichuan Province.

“46 percent of people in China’s rural and impoverished regions are poor because of health issues, so the government is incorporating these rural families into a public medical insurance scheme called the new Rural Cooperative Medical Scheme (RCMS),” she added.

China has stepped into the last but toughest mile of accomplishing its goal to eradicate poverty by 2020. Even for those who have just climbed out of poverty, a critical disease could drag them back into the abyss.

Residents of south China's Hunan Province move to their new homes. / CFP photo

“This problem is even difficult for developed countries,” said professor Zheng Xinye from Renmin University of China.

There are two problems that stopped the insurance programs from working in many countries, including the developed world, Zheng pointed out. “One is a ‘moral hazard,’ meaning people under insurance have incentives to do something unnecessary. The other is ‘adverse selection,’ meaning healthy people might not join the medical program and vice versa.”

By encouraging individuals to join the program as a household, meaning that when parents participate, their children are automatically enrolled (even if they are healthy), China addressed these problems.

By the end of 2012, after a decade of implementation, the RCMS covered 805 million people living in rural areas, which represents 98 percent of the entire rural population. As the World Health Organization stated, the scheme is now a cornerstone for China’s rural health system and exemplifies the success of the current health system reforms that aim to achieve universal health coverage by 2020.

The Point with Liu Xin is a 30-minute current affairs program on CGTN. It airs weekdays at 9:30 p.m. BJT (1330GMT), with rebroadcasts at 5:30 a.m. (2130GMT) and 10:30 a.m. (0230GMT).