VZCZCXRO2387
RR RUEHCN RUEHGH RUEHVC
DE RUEHGZ #0697/01 3560556
ZNR UUUUU ZZH
R 220556Z DEC 09
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 1201
INFO RUEHOO/CHINA POSTS COLLECTIVE 0393
RUEHBJ/AMEMBASSY BEIJING 0963
RUEHGH/AMCONSUL SHANGHAI 0318
RUEHCN/AMCONSUL CHENGDU 0319
RUEHSH/AMCONSUL SHENYANG 0328
RUEAUSA/DEPT OF HHS WASHINGTON DC 0059
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC 0121
RUEATRS/DEPT OF TREASURY WASHINGTON DC 0211
RUEKJCS/SECDEF WASHDC 0033
RUEAIIA/CIA WASHDC 0366
RUEKJCS/DIA WASHDC 0362

UNCLAS SECTION 01 OF 04 GUANGZHOU 000697 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/CM, OES/IHA, MED 
STATE PASS TO ENVIRONMENTAL SCIENCE & TECHNOLOGY 
COLLECTIVE 
STATE PASS TO USAID FOR ANE AND GH 
HHS PASS TO OGHA, NIH/FIC, CDC/COGH 
BANGKOK FOR RMO, CDC, USAID 
BEIJING FOR HHS HEALTH ATTACHE AND RMO 
 
E.O. 12958: N/A 
TAGS: SOCI TBIO ELAB PGOV CH
 
GUANGZHOU 00000697  001.2 OF 004 
 
SUBJECT: Fujian Officials Describe Rural-Urban 
Disparities in Health Care and Insurance Coverage 
(U) This document is sensitive but unclassified. 
Please protect accordingly.  Not for release 
outside U.S. government channels.  Not for internet 
publication. 
 
¶1.   (SBU) Summary:  Public health officials in 
Fujian admit there are significant gaps in the 
level of medical care and health insurance 
protection available to Fujian residents.   Farmers, 
in particular, fare poorly in the type of 
government health insurance coverage and health 
care to which they have access.  Rural areas suffer 
from a severe shortage of doctors.  Urban workers, 
on the other hand, generally receive broader 
insurance coverage, and they have access to the 
best medical facilities and doctors.  Urban 
residents who are unemployed, work part-time, or 
who are migrant workers or students fare have more 
limited coverage.  End summary. 
 
Health Care Resources Concentrated in Major Cities 
--------------------------------------------- --- 
¶2.  (U) To serve its population of approximately 36 
million, Fujian Province has a total of 
approximately 20,000 medical care facilities, 
including hospitals, clinics and infirmaries. 
Public health officials in Fujian frankly 
acknowledge that the existing infrastructure cannot 
adequately meet current demand and provide 
comprehensive medical care to all of FujianQs 
residents.  Currently, medical resources and 
personnel are concentrated in urban areas. 
FujianQs top-grade (Grade III, A Level) hospitals 
are all located in major cities.  In addition to 
major and specialized hospitals, the larger cities 
have a network of almost 9,000 community hospitals, 
clinics and infirmaries.  For example, public 
health officials in Xiamen noted that the city has 
over 1,100 hospitals, clinics and infirmaries at 
all levels. The city has three major hospitals and 
two specialized hospitals of the top grade.  In 
addition, the city has over 20 government-funded 
hospitals at the community level.  Community 
hospitals, clinics, and infirmaries provide basic 
medical services to urban residents at a lower cost 
than the major hospitals. 
 
¶3.  (SBU) Because they provide advanced levels of 
care, facilities and expertise, major hospitals and 
medical centers in urban areas attract both urban 
and rural residents.  The outpatient department of 
the Fujian Provincial Hospital in Fuzhou reportedly 
treats over 1.4 million patients on an annual basis. 
Officials estimate that 30% to 40% of the patients 
in Xiamen's general hospitals come from surrounding 
rural areas.  Public health officials told 
ConGenOff that due to heavy demand for medical 
services, all of Fujian's major hospitals are 
forced to operate at maximum capacity around the 
clock.  Patients face long waits before they see a 
doctor; although doctors spend only minutes on each 
patient, the doctors still must put in long hours 
to meet demand.  Many hospital wards are filled to 
overflowing with patients.  Hospital officials say 
that the challenge of meeting current demand 
imposed by an ever-growing number of patients makes 
it difficult and almost impossible to take steps to 
improve the quality of medical services provided. 
 
Doctors Avoid Rural Areas 
------------------------- 
 ¶4.  (SBU) Although Fujian has over 10,000 clinics 
and infirmaries that are located in rural areas, 
 
GUANGZHOU 00000697  002.2 OF 004 
 
SUBJECT: Fujian Officials Describe Rural-Urban 
Disparities in Health Care and Insurance Coverage 
(U) This document is sensitive but unclassified. 
Please protect accordingly.  Not for release 
outside U.S. government channels.  Not for internet 
publication. 
 
these clinics and infirmaries generally provide 
only basic medical care, i.e. treating minor 
ailments and injuries.  Serious cases are almost 
always referred to larger hospitals in urban areas. 
Many rural residents are not covered by existing 
health insurance systems (see below) and, 
consequently, are reluctant to use the local 
clinics and infirmaries even for minor ailments and 
injuries.  According to a rural doctor in FujianQs 
Pingnan County, most rural residents do not receive 
adequate health care.  For cost considerations, 
they seldom visit a doctor or pharmacist, even if 
they do not feel well, and they almost never 
receive regular physical exams.  Rather, they 
generally try to "endure the pain" and hope that 
any discomfort will go away.  Alternatively, they 
may go to a rural drug store and, without 
professional medical advice, select a medicine that 
looks like it may be useful.  This rural doctor 
noted that due to lack of adequate preventative 
medical care, many rural residents develop advanced 
stages of severe illnesses including cancer, 
diabetes or hepatitis before they receive any 
medical treatment.  In many cases, by the time they 
receive medical care, it is too late. 
 
¶5.  (U) For lack of business, many of the rural 
clinics and infirmaries operate at a deficit. 
Because doctor salaries depend heavily on the 
number of patients a doctor sees, most of the rural 
clinics and infirmaries are unable to offer 
competitive salaries.  Consequently, many rural 
areas are unable to attract skilled medical 
personnel.  Public health officials in Xiamen noted 
that in order to help remedy this problem, they 
have begun to link job promotion opportunities at 
urban hospitals with a requirement that candidates 
seeking promotion serve for specified periods of 
time in rural areas.  Nonetheless, rural areas 
continue to experience a severe shortage of skilled 
medical personnel. 
 
Limited Health Insurance for Farmers 
------------------------------------ 
¶6.  (U) Government health insurance coverage varies 
from locality to locality.  Most of the government 
plans are based on a complex tiered system offering 
varying levels of coverage for outpatient and 
inpatient care depending on whether an individual 
is an urban or rural resident, or a migrant worker. 
Rural residents, in general, receive very little 
coverage.  Farmers who are able to pay a small, 
fixed premium annually receive coverage for some 
inpatient expenses but not for outpatient costs. 
In Xiamen, average annual income for rural 
residents is approximately US$ 1,240 and the annual 
premium for farmers and migrant workers is 200 RMB 
(US$ 29), of which the individual must pay 50 RMB 
(US$7) and the Xiamen government subsidizes the 
remaining 150 RMB (US$ 22).  When it comes to 
hospitalization costs, insured rural residents, 
like urban residents, still must pay the first 
1,000 RMB (US$ 146) of inpatient costs.  Afterwards, 
the government covers 70% of the costs up to 5,000 
RMB (US$ 732).  If expenses exceed 5,000 RMB, rural 
residents must cover the expenses on their own 
unless they qualify for government funding 
available for specified, severe illnesses or become 
 
GUANGZHOU 00000697  003.2 OF 004 
 
SUBJECT: Fujian Officials Describe Rural-Urban 
Disparities in Health Care and Insurance Coverage 
(U) This document is sensitive but unclassified. 
Please protect accordingly.  Not for release 
outside U.S. government channels.  Not for internet 
publication. 
 
the beneficiary of an NGO that helps individuals 
with severe cases. 
 
¶7.  (U) Throughout Fujian, the outpatient expenses 
of rural residents are not covered by the 
government medical insurance.  As noted earlier, 
because rural residents must pay all of the cost of 
outpatient treatment on their own, many opt not to 
go to the clinics or infirmaries to receive 
preventative or primary medical care.   When rural 
residents do seek outpatient medical care, they try 
to avoid the larger hospitalsQthe very hospitals 
possessing advanced diagnostic capabilitiesQ where 
outpatient charges are higher than at smaller 
clinics and infirmaries. 
 
Better Coverage for Urban Workers, But Still Gaps 
--------------------------------------------- ---- 
¶8.  (U) Urban residents with employers who 
contribute to the government health insurance plan 
qualify for both outpatient and inpatient health 
insurance coverage.  Subject to certain limitations 
and a co-payment requirement of 20%, outpatient 
medical charges are generally covered in full. 
Medical insurance reimbursement rates depend, in 
part, on the category of hospital the patient 
visits. In order to encourage more people to visit 
smaller, community level hospitals, the 
reimbursement rate provided for medical expenses at 
the smaller hospitals is higher than the 
reimbursement rate provided for expenses at major 
hospitals.  Urban workersQ inpatient medical 
expenses up to 5,000 (US$ 732) RMB are covered in 
the same manner as they are for rural residents 
(described above).  However, urban workers with 
inpatient medical expenses in excess of 5,000 RMB 
up to 50,000 (US$ 7320) RMB are entitled to tap 
into the government medical insurance pool.  This 
is a significant benefit that is not available to 
rural residents, migrant workers or non-employed 
urban residents.   No government insurance is 
available to cover costs in excess of RMB 50,000. 
Individuals may subscribe to private insurance 
plans to cover these catastrophic health costs. 
 
¶9.  (U) Urban residents who work only part time 
must pay an annual premium of RMB 300 (US$ 44), of 
which the Fuzhou government offers a subsidy of 150 
RMB (US$ 22).  Students pay a premium of RMB 100 
(US$15), of which 60 RMB (US$ 9) is subsidized by 
the city government.  This provides insurance 
coverage for limited inpatient treatment only. 
Outpatient coverage is not provided.  The 
government will provide full reimbursement for 
accident-related expenses of students.  The 
government also will fully reimburse allowable 
fertility-related medical expenses.  Part-time 
workers, like rural residents and migrant workers, 
are not eligible to tap into the governmentQs 
medical insurance pool to cover inpatient costs in 
excess of 5,000 RMB (US$ 732).  To help patients 
with financial hardships, some hospitals have 
offered lower-cost options including Qlow cost beds 
that are often placed in corridors and Qzero profit 
medicines. 
 
¶10.  (SBU) Although employers are obligated to make 
contributions to the government insurance plan on 
 
GUANGZHOU 00000697  004.2 OF 004 
 
SUBJECT: Fujian Officials Describe Rural-Urban 
Disparities in Health Care and Insurance Coverage 
(U) This document is sensitive but unclassified. 
Please protect accordingly.  Not for release 
outside U.S. government channels.  Not for internet 
publication. 
 
behalf of migrant workers, migrant workers 
generally receive coverage that is limited to 
inpatient medical care.  Even though contributions 
have been made to the locality (where the migrant 
laborers are working) medical insurance pool on 
their behalf, migrant workers are not eligible to 
tap into the pool for inpatient expenses that 
exceed 5,000 RMB (US$ 732).  This is because the 
migrant workers are not officially registered as 
living in the locality.  Comment:  The inability of 
migrant workers to tap into the local insurance 
pools means that contributions made on the migrant 
workers' behalf become de facto "donations" to the 
locality's insurance pool.  Although a number of 
individuals have raised complaints about the 
unfairness of this system, the insurance pool 
system continues to operate in a manner that 
exploits migrant workers.  End comment. 
 
Looming Need for Medical Care and Insurance Reforms 
--------------------------------------------- ------ 
¶11.  (SBU) Comment:  Despite China's supposed 
socialist underpinnings, health care today is not 
provided to the masses in an egalitarian manner. 
The current system favors the urban workers whose 
contributions fund the system; even these residents 
often feel compelled to save substantial sums to 
cover catastrophic health care expenses.  Rural 
residents, often of limited economic means, are 
largely neglected by the insurance regime.  Among 
the beggars and panhandlers on China's streets, it 
is not unusual to see individuals, pleading for 
donations, who bear placards detailing 
circumstances describing urgent medical needs for 
which the individual and her/his family are unable 
to pay.  Of the myriad possible sources of 
discontent on the part of ChinaQs rural population, 
lack of access to adequate health care remains a 
leading possibility.  End comment. 
 
GOLDBECK