Slowdown may spur China to speed health care reform

With the $586Billion stimulus package on its way, China now has to face the problem of poor health care and welfare system. China's poor health care and welfare program forces people to save more for times if a family member should fall ill or lose their job, rather then spend, because the success of the Stimulus package very much depends on people's spending this economic slow down will pressure the Chinese government to address key issues such as improving health care and social welfare. The average cost of an admission into the hospital in China is equivalent to annual salary of the lowest 20% of the population, and China has only put of 1.8 % of their GDP of Public money into health care accounts compared to 6% around the world.
The problem with the Chinese health care system has been that the hospitals has been marketized, and the hospital often over prescribe and diagnostic to boost revenue causing over inflated hospital bills.
"They need to think about incentives. You need to get the incentives right, and you need to back those incentives up with supervision mechanisms." says Christopher Spohr, a social sector economist with the Asian Development Bank in Beijing.