Financing Policy Of Rural Health Service

Rural health service includes rural medical treatment and rural public health service. Rural medical treatment does not accord with the basic assumptions of perfect competition market structures, government intervention is essential to reduce the damage of moral hazard and information asymmetric. Rural public health services have remarkable externalities; there are free riders; so the government must provide services and finances for that by revenue.Before the system transformations, the rural health services on the community and country's level that composed by provider (collectivity), producer (Chijiao doctor) and consumer (farmer). The collectivity delegate its members decided the arrangement and financing of public service, the health center of community and the Chijiao doctor of country produce the services, and inspired them with work points, supervised by rural credit cooperative, that ensured 85 percent of cooperative medical funds used for farmer. This system ensured the farmer in China acquired better rural health services than the other state and region at same income in the world. Rural health services over the system transformation period came through the disintegration of collective economy and the reform of finance decentralization. Township and village sanitation financing channel were disintegrated, the availability and accessibility have declined. Though the government take a series of reform policies, the effectiveness of reform is not better.Government provides financing for rural public health service, reform the inter-government finance system, moving the responsibility for the financing form the village, township or county level to a higher level, provide basic and security rural public health series for poor people but poverty area.