Sus­tain­able So­cial Se­cu­rity

China Pictorial (English) - - Contents - Text by Ru Yuan

For a large coun­try like China, na­tion­wide co­or­di­na­tion of pen­sion funds has be­come an ir­re­sistable trend. Build­ing the cen­tral ad­just­ment sys­tem rep­re­sents China’s res­o­lu­tion to ad­dress chal­lenges in the realm of so­cial se­cu­rity.

This June, China an­nounced a pol­icy to es­tab­lish a cen­tral ad­just­ment sys­tem to cover ba­sic pen­sion funds of en­ter­prise em­ploy­ees. The new pol­icy went into ef­fect on July 1, 2018, with the aim to bal­ance pen­sion pay­ment bur­dens of lo­cal gov­ern­ments and re­al­ize sus­tain­able de­vel­op­ment of China’s re­tire­ment in­sur­ance sys­tem. Rea­sons be­hind the Cen­tral Ad­just­ment

In re­cent years, re­forms of China’s ba­sic pen­sion sys­tem have delved deeper to achieve ma­jor progress. In gen­eral terms, its re­tire­ment in­sur­ance sys­tem fea­tures sta­ble op­er­a­tion and strong fund­ing sup­port, guar­an­tee­ing timely and full pen­sion pay­ments to re­tirees. In 2017, the to­tal rev­enue of China’s pen­sion funds reached 3.3 tril­lion yuan, and the to­tal ex­pen­di­ture hit 2.9 tril­lion yuan. By the end of 2017, the cu­mu­la­tive ac­count bal­ance reached 4.1 tril­lion yuan.

How­ever, hid­den be­neath the over­all steady op­er­a­tion of China’s pen­sion sys­tem are widen­ing gaps among var­i­ous re­gions. The de­pen­dency ra­tio between the pop­u­la­tion typ­i­cally not in the la­bor force (chil­dren and se­niors) and work­ing-age adults varies greatly among re­gions. The im­bal­ance in re­gional pen­sion funds has be­come in­creas­ingly glar­ing in re­cent years. Al­though nu­mer­ous fac­tors may come into play in­clud­ing di­ver­si­fy­ing em­ploy­ment and im­bal­anced eco­nomic de­vel­op­ment, the im­bal­ance is pri­mar­ily caused by an ag­ing pop­u­la­tion and in­creas­ing pop­u­la­tion mo­bil­ity.

By the end of 2017, China was home to 241 mil­lion se­niors aged 60 and above, ac­count­ing for more than 17 per­cent of its to­tal pop­u­la­tion. In 2017, its el­derly pop­u­la­tion grew by more than 10 mil­lion year-on-year for the first time. This enor­mous fig­ure and the mas­sive pop­u­la­tion flow in the coun­try ex­ac­er­bated the re­gional im­bal­ance of pen­sion funds. Specif­i­cally, the sur­plus of pen­sion funds has mostly oc­curred in eastern parts of China, while some west­ern and north­east­ern prov­inces have been hit with great pres­sure on their pen­sion funds. Ac­cord­ing to the China so­cial se­cu­rity de­vel­op­ment Re­port2016 is­sued by the Chi­nese govern­ment in Novem­ber 2017, fund rev­enues of seven pro­vin­cial-level ad­min­is­tra­tive units in­clud­ing Qing­hai and Jilin failed to cover their pen­sion ex­pen­di­tures in 2016. Among them, the north­east­ern prov­ince of Hei­longjiang was un­der­funded by 32 bil­lion yuan in its pen­sion fund in 2016, and its cu­mu­la­tive fund short­age reached more than 23 bil­lion yuan. How­ever, an­other nine pro­vin­cial-level ad­min­is­tra­tive units in­clud­ing Guang­dong, Jiangsu, and Zhe­jiang each re­ported a cu­mu­la­tive pen­sion fund sur­plus of at least 100 bil­lion yuan. Guang­dong Prov­ince topped the list with a sur­plus of nearly 726 bil­lion yuan.

The im­bal­ance in pen­sion funds at the pro­vin­cial level is a dif­fi­cult is­sue to be ad­dressed, so ad­just­ment across the na­tion is needed. The new

pol­icy cov­ers the fol­low­ing as­pects: First, the cen­tral ad­just­ment sys­tem will draw a cer­tain por­tion from pro­vin­cial pen­sion fund pools for re­dis­tri­bu­tion later. Sec­ond, fund dis­tri­bu­tion of the cen­tral ad­just­ment sys­tem will be based on the scale of the cap­i­tal pool. Third, funds raised through the cen­tral ad­just­ment sys­tem will be al­lo­cated to lo­cal gov­ern­ments for pen­sion pay­ments only, and not used to bal­ance bud­gets. Fourth, the ex­ist­ing cen­tral fis­cal sub­sidy poli­cies will con­tinue and the cen­tral govern­ment will con­tinue sup­port­ing lo­cal gov­ern­ments in pen­sion dis­tri­bu­tion.

Ad­dress­ing Con­cerns

The an­nounce­ment of the cen­tral ad­just­ment sys­tem for ba­sic pen­sion funds has gen­er­ated heated dis­cus­sion. Whether the new pol­icy will cre­ate bur­dens on en­ter­prises, em­ploy­ees and lo­cal gov­ern­ments has aroused great pub­lic con­cern.

“The cen­tral ad­just­ment fund is com­prised of pen­sion funds paid by each pro­vin­cial-level re­gion,” ex­plains You Jun, China’s Vice Min­is­ter of Hu­man Re­sources and So­cial Se­cu­rity. “Es­tab­lish­ing the cen­tral ad­just­ment sys­tem is pri­mar­ily aimed at bal­anc­ing deficits and sur­pluses in pro­vin­cial pen­sion funds. The to­tal vol­ume of the na­tional pen­sion fund will not change. The new pol­icy doesn’t raise the pay­ment ra­tio of en­ter­prises or in­di­vid­u­als, nor does it change ex­ist­ing meth­ods of pen­sion cal­cu­la­tion and pay­ment.” Thus, the new pol­icy will not cre­ate bur­dens for en­ter­prises or em­ploy­ees, nor will it have any neg­a­tive im­pact on the wel­fare of re­tirees.

“The cen­tral ad­just­ment sys­tem for ba­sic pen­sion funds was de­signed to bal­ance the pay­ment bur­dens of lo­cal gov­ern­ments and pro­mote fair shar­ing of so­cial se­cu­rity funds among the pub­lic at large,” opines Jin Weigang, head of the Chi­nese Acad­emy of La­bor and So­cial Se­cu­rity.

Dur­ing the im­ple­men­ta­tion process of the cen­tral ad­just­ment sys­tem, bal­anc­ing the in­ter­ests of var­i­ous par­ties will be tricky. Many have also weighed in on fair and rea­son­able turn-in and dis­tri­bu­tion so­lu­tions for funds raised through the cen­tral ad­just­ment sys­tem.

These con­cerns can be re­solved by in­sti­tu­tional de­sign. For ex­am­ple, in terms of in­cen­tive and re­stric­tive mech­a­nisms, the new pol­icy stip­u­lated that after re­ceiv­ing sub­si­dies and funds al­lo­cated by the cen­tral govern­ment, re­main­ing pro­vin­cial fund­ing gaps needs to be cov­ered by lo­cal gov­ern­ments. The new pol­icy also pro­posed that an eval­u­a­tion sys­tem be es­tab­lished. Var­i­ous is­sues such as pen­sion pay­ment and fund man­age­ment will be in­cluded in the work eval­u­a­tion list for pro­vin­cial-level gov­ern­ments.

Na­tion­wide Co­or­di­na­tion

Th­e­so­cialin­sur­ancela­wof the Peo­ple’sre­pub­li­cof China called for the coun­try’s ba­sic pen­sion funds to be­come co­or­di­nated na­tion­wide grad­u­ally to achieve uni­fied col­lec­tion and al­lo­ca­tion of funds by the state. The re­port de­liv­ered at the 19th Na­tional Congress of the Com­mu­nist Party of China placed na­tion­wide co­or­di­na­tion of pen­sion funds high on the agenda. How­ever, be­cause re­gional eco­nomic de­vel­op­ment is still un­bal­anced across China, na­tion­wide co­or­di­na­tion of pen­sion funds poses a huge chal­lenge. Even only a hand­ful of prov­inces could re­al­ize pro­vin­cial-level pen­sion funds co­or­di­na­tion in any real sense. Most Chi­nese pro­vin­cial-level ad­min­is­tra­tive units are do­ing pro­vin­cial-level ad­just­ment or build­ing other mech­a­nisms to pro­mote re­form of their re­spec­tive pen­sion sys­tems.

Thus, the cen­tral ad­just­ment sys­tem is the first step to­wards na­tion­wide co­or­di­na­tion. As a transitional pol­icy, the sys­tem can ease the se­ri­ous im­bal­ance in pen­sion funds among dif­fer­ent prov­inces and re­gions and fa­cil­i­tate a sus­tain­able ba­sic pen­sion scheme. Dur­ing the tran­si­tion pe­riod, the cen­tral govern­ment should care­fully con­sider eco­nomic de­vel­op­ment dis­par­i­ties across the coun­try, in­crease ef­forts to for­mu­late meth­ods for trans-pro­vin­cial pen­sion transfers and re­newals, and ra­tio­nally di­vide re­spon­si­bities between cen­tral and lo­cal gov­ern­ments. The cen­tral ad­just­ment sys­tem presents an op­por­tu­nity for China to in­vest greater ef­forts to plan and re­al­ize na­tion­wide co­or­di­na­tion of the coun­try’s ba­sic pen­sion funds.

For a large coun­try like China with a rapidly ag­ing pop­u­la­tion and un­bal­anced re­gional de­vel­op­ment, na­tion­wide co­or­di­na­tion of pen­sion funds has be­come an ir­re­sistable trend. Build­ing the cen­tral ad­just­ment sys­tem rep­re­sents China’s res­o­lu­tion to ad­dress chal­lenges in the realm of so­cial se­cu­rity. “The cen­tral ad­just­ment sys­tem en­ables the coun­try to al­lo­cate and dis­trib­ute pen­sion funds from an over­all per­spec­tive,” says Chu Ful­ing, pro­fes­sor with the School of In­sur­ance at China’s Cen­tral Univer­sity of Fi­nance and Eco­nom­ics. “In this cru­cial pe­riod marked by an ac­cel­er­ated ag­ing process and rapid trans­for­ma­tion and up­grad­ing of eco­nomic struc­ture, China faces long-term pres­sures from pen­sion pay­ments. The cen­tral ad­just­ment sys­tem will help strengthen the sus­tain­abil­ity of China’s pen­sion sys­tem.”

The re­port to the 19th Na­tional Congress of the Com­mu­nist Party of China (CPC) called for the Healthy China ini­tia­tive, which aims to “im­prove com­mu­nity-level health­care ser­vices and strengthen the ranks of gen­eral prac­ti­tion­ers.” The ini­tia­tive is in­tended to en­hance ra­tio­nal al­lo­ca­tion of med­i­cal re­sources, in­crease health­care ef­fi­ciency, re­duce ex­ces­sive reliance on first-class hos­pi­tals and im­prove pa­tient ex­pe­ri­ence.

In early 2018, the Chi­nese govern­ment an­nounced plans to train more qual­i­fied gen­eral prac­ti­tion­ers and ex­pand de­ploy­ment of con­tracted fam­ily doc­tors. In China, gen­eral prac­ti­tion­ers are physi­cians who di­ag­nose, treat and man­age a wide ar­ray of pa­tient con­di­tions and pro­vide med­i­cal ser­vices rang­ing from early treat­ment of reg­u­lar ill­nesses, pre­ven­tion, health­care and re­ha­bil­i­ta­tion to chronic dis­ease man­age­ment at com­mu­nity level as well as rou­tine, in­te­grated and cus­tom­ized health­care ser­vices for in­di­vid­u­als or fam­i­lies. Ac­cord­ing to the Na­tional Health Com­mis­sion of China, less than 200,000 com­mu­nity-level gen­eral prac­ti­tion­ers are pro­vid­ing ser­vices across the coun­try, which is only about half of the num­ber needed.

In 2015, as a pi­lot zone for com­mu­nity-level health­care re­form in China, Shen­zhen’s Luohu Dis­trict be­gan to im­ple­ment a gen­eral prac­ti­tioner sys­tem which has proven very suc­cess­ful.

Gate­keep­ers for Com­mu­nity Health­care

Wen­hua Com­mu­nity in Luohu Dis­trict has a pop­u­la­tion of 25,000, of whom many are mi­grants. The com­mu­nity hospi­tal is staffed with 10 gen­eral prac­ti­tion­ers and 12 nurses. Wu Tian­long is a gen­eral prac­ti­tioner posted there.

Be­fore she met Wu, com­mu­nity res­i­dent Xu Yanyan pre­ferred to see doc­tors at pres­ti­gious Hong Kong hos­pi­tals like many high-in­come Shen­zhen res­i­dents. About six years ago, her two-year-old son came down with a cough that per­sisted even after con­sult­ing sev­eral doc­tors in Hong Kong. So she de­cided to try her luck at the com­mu­nity hospi­tal.

“Frankly, see­ing Doc­tor Wu was so young, I didn’t have much con­fi­dence in his ex­per­tise,” Xu re­called. To her sur­prise, three days later her son’s cough was cured after tak­ing medicine Wu pre­scribed.

Two years later, Xu’s younger son came down with a cough. This time, Wu rec­om­mended a very cheap drug. “Each bot­tle con­tains six grams of tablets, and they’re very af­ford­able,” Xu said. “Doc­tor Wu helps my fam­ily save a lot of money on med­i­cal care.”

Back then, the con­tracted fam­ily doc­tor sys­tem had yet to be im­ple­mented in Shen­zhen. But, when­ever her sons got sick, Xu ha­bit­u­ally con­sulted Wu over the tele­phone. “Ev­ery time I called, he asked in de­tail about my sons’ symp­toms and then dis­pensed use­ful ad­vice,” she said. “He knows key phys­i­o­log­i­cal in­for­ma­tion about ev­ery mem­ber of my fam­ily, even our heights and weights.”

Com­pared to spe­cial­ized physi­cians at large hos­pi­tals, com­mu­nity-level gen­eral prac­ti­tion­ers not only treat ill­nesses, but also fo­cus on in­di­vid­ual pa­tients’ health.

“You shouldn’t in­ter­rupt pa­tients when they talk to you but en­cour­age them to ask what­ever they want,” ex­plained Zhang Xiaox­iao, a doc­tor at the Health Ser­vice Cen­ter of Luohu Com­mu­nity. “By con­vers­ing with pa­tients, you get in­for­ma­tion that can be very help­ful for di­ag­no­sis. Some­times I feel like a de­tec­tive.” In her eyes, how gen­eral prac­ti­tion­ers com­mu­ni­cate with pa­tients is to­tally dif­fer­ent from spe­cial­ized physi­cians.

Once, a boy suf­fer­ing from fre­quent stom­achaches came to see Doc­tor Zhang. “In most cases, a spe­cial­ized physi­cian would sus­pect gas­tric dis­eases and or­der a gas­troscopy or he­li­cobac­ter py­lori in­fec­tion ex­am­i­na­tion.” Zhang said.

After talk­ing with the boy, she re­al­ized that his stom­achaches oc­curred only in the morn­ing from Mon­day to Fri­day, but never in the af­ter­noons or evenings. On press­ing fur­ther, she learned that the boy was walk­ing quite far to school since reach­ing mid­dle

school, so he didn’t have time for break­fast. And his stom­achache usu­ally sub­sided after the first morn­ing class.

Zhang di­ag­nosed that the boy had tem­po­ral ab­dom­i­nal cramp­ing and sug­gested he get up ear­lier in the morn­ing to eat break­fast be­fore go­ing to school. Fol­low­ing her ad­vice, the boy never again had such pains. When the boy came back for a fol­low-up visit, Zhang only talked with him in­stead of per­form­ing an ex­am­i­na­tion or or­der­ing tests.

In Zhang’s opin­ion, gen­eral prac­ti­tion­ers usu­ally pro­vide med­i­cal ser­vices through heart-to-heart com­mu­ni­ca­tion with pa­tients,

rather than with medicine and pro­ce­dures. Luohu Ex­pe­ri­ence

Three years ago, be­fore the gen­eral prac­ti­tioner sys­tem was in­tro­duced to Luohu, Zhang Xiaox­iao didn’t get much sat­is­fac­tion from her work. At that time, sec­ond- and third-tier hos­pi­tals and com­mu­nity health­care cen­ters in Shen­zhen lagged far be­hind hos­pi­tals in Guangzhou, cap­i­tal of Guang­dong Prov­ince, in terms of med­i­cal re­sources—never mind in­sti­tu­tions in Bei­jing and Shang­hai. Many lo­cal pa­tients pre­ferred to see doc­tors in Bei­jing, Shang­hai, Guangzhou or even Hong Kong and South­east Asian coun­tries. Shen­zhen be­came known as a “health­care desert.”

The new health­care re­form that be­gan in 2015 quickly be­came a game-changer. That year, with its Luohu Dis­trict as a pi­lot area, Shen­zhen launched a re­form fo­cus­ing on com­mu­nity-level health­care. Luohu merged five hos­pi­tals and 23 com­mu­nity health­care cen­ters into Luohu Hospi­tal Group.

Sun Xizhuo, pres­i­dent of Luohu Hospi­tal Group, and his health­care re­form team com­mit­ted to en­sur­ing lo­cal res­i­dents ac­cess to qual­ity, ef­fec­tive health­care ser­vices within a 15-minute walk. The hospi­tal group pays great at­ten­tion to dis­ease pre­ven­tion and health man­age­ment to “free res­i­dents from ill­nesses and hos­pi­tal­iza­tion, cut their health­care bur­dens and en­able them to en­joy high-qual­ity med­i­cal ser­vices.”

Since 2015, a se­ries of new med­i­cal re­form poli­cies have been car­ried out in Luohu Dis­trict.

A mo­bile app devel­oped by the dis­trict, Healthy Luohu, is now used by ev­ery lo­cal doc­tor. With the app, pa­tients can make an ap­point­ment, pay for med­i­cal ser­vices and con­sult con­tracted doc­tors. Ev­ery hospi­tal and health­care cen­ter un­der Luohu Hospi­tal Group can share in­for­ma­tion via the app. More­over, it helps doc­tors reg­u­larly mon­i­tor the health of lo­cal res­i­dents, di­ag­nose ill­nesses ear­lier and re­duce dis­ease preva­lence rates. If a pa­tient needs to be trans­ferred to an­other hospi­tal, his or her med­i­cal data can be im­me­di­ately de­liv­ered ac­cord­ingly. Trans­ferred pa­tients need not reg­is­ter at the new hospi­tal.

In Luohu, med­i­cal in­sur­ance funds adopt a man­age­ment ap­proach called a “capped bud­get.” Lo­cal res­i­dents are free to choose lo­cal hos­pi­tals or clin­ics as their con­tracted med­i­cal ser­vice in­sti­tu­tions. Each year, the med­i­cal in­sur­ance ad­min­is­tra­tion pays Luohu Hospi­tal Group a cer­tain amount of money ac­cord­ing to the num­ber of the in­sured who chose it as their con­tracted med­i­cal ser­vice in­sti­tu­tion the pre­vi­ous year. The amount is based on per capita med­i­cal in­sur­ance in Shen­zhen plus the an­nual growth rate of med­i­cal in­sur­ance in the city. If the amount does not cover the med­i­cal ex­pen­di­tures of the con­tracted pa­tients each year, Luohu Hospi­tal Group will bear the loss it­self. If there is a sur­plus, the hospi­tal group will keep it.

Un­der these terms, the hospi­tal group can max­i­mize its prof­its in only two ways: one is to en­sure con­tracted res­i­dents are healthy and re­duce their med­i­cal spend­ing, and the other is to at­tract more con­tracted res­i­dents by im­prov­ing ser­vice qual­ity.

Ac­cord­ing to Sun, China still lacks a com­plete aca­demic and as­sess­ment sys­tem for gen­eral prac­ti­tion­ers, and some over­lap­ping ser­vices af­fect the ef­fi­ciency of com­mu­nity-level gen­eral prac­ti­tion­ers. “For in­stance, pub­lic health ed­u­ca­tion such as teach­ing chil­dren how to wash their hands should be over­seen by cen­ters for dis­ease con­trol, leav­ing com­mu­nity hos­pi­tals to fo­cus on treat­ment of chronic dis­eases and pro­vid­ing ba­sic pub­lic health­care,” he added.

“I don’t think our prac­tice should be called the ‘Luohu Model’ be­cause it’s merely a re­form,” Sun noted. “I hope more med­i­cal in­sur­ance cat­e­gories will be in­tro­duced to pro­mote com­mu­nity-level med­i­cal ser­vices so that large hos­pi­tals can con­cen­trate on med­i­cal teach­ing and re­search as well as treat­ing acute and se­vere dis­eases. That would help China form a bet­ter med­i­cal ser­vice sys­tem.”

Oc­to­ber 9, 2016: Se­niors prac­tice tai chi in Lip­ing County, Guizhou Prov­ince. In 2017, newly added Chi­nese se­niors ex­ceeded 10 mil­lion for the first time. VCG

April 15, 2018: A se­nior in a wheel­chair in Julu County, He­bei Prov­ince, is aided by a nurse. In re­cent years, China has placed more at­ten­tion on ad­dress­ing the needs of its boom­ing el­derly pop­u­la­tion. by Mou Yu/xin­hua

June 19, 2017: Lo­cal res­i­dents sign ser­vice agree­ments for fam­ily doc­tors at com­mu­nity health­care cen­ters in Luohu Dis­trict, Shen­zhen City, Guang­dong Prov­ince. courtesy of the web­site of the lo­cal govern­ment of Luohu Dis­trict

April 3, 2018: Zhao Sheng, a physi­cian at Erqibei Com­mu­nity Health­care Cen­ter in Feng­tai Dis­trict, Bei­jing, con­ducts a phys­i­cal ex­am­i­na­tion of a lo­cal res­i­dent. VCG

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.