Chinese Healthcare And Economic Development

This study focuses on the topic of demand and allocation of healthcare resources in China. Like many resources studied by economists, healthcare is no different. The implementation of healthcare policy and allocation of medicinal resources is critical to the process of development of any nation, as research has shown that the health of a nation and productivity are highly correlated. As humans continue to evolve and nations become increasingly integrated, every nation encounters vexing challenges of how best to efficiently and equitably allocate healthcare. In2000and again in2005, the Chinese government instituted a series of healthcare reforms. While these reforms have certainly meant progress, this paper argues that these reforms have failed to meet the nations growing demand for healthcare, the growing healthcare inequality, and furthermore are not sustainable for the future population growth scenarios.Using data time series data, we demonstrate the difference in attitude of American and Chinese citizens in terms of trust in a social safety net. Because of excess trust in medical and education safety nets provided by the government, Americans save little while Chinese a much larger proportion of their income because of a lack of confidence in social safety nets such as education and healthcare. Before assessing the Chinese healthcare system, this study discusses the failures that have plagued the U.S. healthcare system since the1960’s and what the Chinese healthcare reformers can learn from US failures.This discussion is divided into three parts, which focus on three different aspects of the Chinese healthcare system. The first part focuses on two questions:Why is there a large difference in consumer confidence in social safety nets with regards to the United States and China? And, does healthcare inequality exists among provinces in China and to what degree? The second part of this discussion attempts to quantify health-based consequences of lifestyle choices and healthcare investment using an econometric approach. Finally, the third part of this Study provides recommendations drawn from developed nations success and failures with regards to what healthcare reforms can solve challenges of demand elasticity and resulting inequalities. Using cross section and time series data, we utilize the demand function to analyze healthcare demand. Using R statistical analysis platform to conduct statistical analysis we find that life expectancy of an individual is correlated to factors that are beyond the scope of healthcare reform. These factors include smoking, disposable income, access to healthcare, air quality, and education level. Furthermore, this study concludes that while not an appropriate standard of measurement for developed nations, consumer confidence in a sustainable safety net, is the best approach for healthcare reformers to measure success as China continues to transition from am export oriented economy to a consumer based economy.