marketization" as some experts have pointed out? Professor Cai Jiangnan, from the School of Economics, Fudan University, and Professor Zhou Qiren, from the China Center for Economic Research, Peking University, put forward their different views on this issue, based on their long-term research of China's medical system reform.

Look Beyond Medical Pricing

By CAI JIANGNAN

When complaining something is too expensive, it means the price is too high, and must be cut. Recent years have seen the Chinese Government repeatedly reducing medicine prices, which fully shows its strong determination to solve the problem of unaffordable medical services to most average citizens. However, instead of easing the problem, it seems that the public have to pay more for their medical care.

The current problem of high medical fees should not be blamed on high prices of healthcare, nor is it a result of high medicine prices. The total expenses on healthcare account for 5 percent of China's national revenue. Compared with other countries, this sum measures up to China's current economic growth level. On the surface, the problem of high medical expenses does not exist.

We do not deny the existence of absurdly high medicine prices. This is mainly because hospitals depend too much on the profit from medicine sales. Nevertheless, it's also a fact that prices of medical services in China are relatively low, and this is the fundamental reason why hospitals depend so much on medicine sales to survive. If actions are taken to raise medical service prices while slashing medicine prices, there will be no clear change to the current per-capita medical expenses.

However, from the micro perspective, the fundamental reason for the public to feel that medical fees are too high lies in the fact that there is an uneven distribution of the incidences of diseases and medical expenses. A small fraction of people require the majority of medical resources and expenses, while most others only need a small amount of medical resources. Patients will surely be unable to afford high medical fees if there is no medical insurance to compensate. Even if medical prices fall sharply, it can do nothing to ease the current problem of high medical expenses because of the lack of a risk-sharing mechanism.

When it comes to common commodities and public services, the government usually first satisfies the demand of the majority and then turns to the minority.

China's current medical system reform is based on this logic, with a view to achieving social equality in the field of healthcare. The government is making great efforts to establish a basic healthcare system, consisting of community health centers in urban areas and the new type cooperative medical care system in rural areas, in the hope of treating and preventing common and frequently occurring diseases. As this kind of medical service covers the majority of the population, it conforms to the basic principle of equality. When China's economic levels have improved, cover will not only be given for minor diseases but also life-threatening diseases.

However, this seemingly quite rational logic is opposite to the procedures that people undergo when dealing with diseases. If one catches three diseases at the same time, one is fatal, one is serious and one is minor, it's certain that he or she will first deal with the fatal disease. If three members in the same family catch diseases of the above-mentioned nature, and if only one has the opportunity to be treated, the choice will be the same. Similarly, when medical resources are limited, we have to give priority to diseases that pose a threat to one's life, but if there are sufficient resources, both serious and non-serious diseases can be covered.

A small fraction of people who are seriously ill require the majority of medical resources. Is it going against the principle of social equality to give priority to these people's needs? Absolutely not. Many people will at some stage in their