China, like U.S., tackles thorny healthcare reform

By Lucy Hornby

HANGZHOU, China (Reuters) - Construction worker Li Fuxing had been in the wealthy Chinese city of Hangzhou for less than a month when a falling beam smashed his knee, landing him with hospital bills equivalent to half a year's wages.

In striped pyjamas and a cast, he is another test case in China's experiment in providing affordable health care to 1.4 billion people, an endeavour expected to cost $124 billion (74 billion pounds) over the three years to 2011.

As debate rages in the United States over whether and how the government can extend health insurance, China is simply attempting to provide a modicum of cover for its people and revamp the hospital system's reliance on peddling drugs to earn revenue.

"In the U.S., the reform is to try and expand coverage whereas in China, they're just trying to make sure everyone has basic health care," said Drew Thompson, who does research on China's health system at the Nixon Centre in Washington.

"You keep hearing the word 'basic'."

Li hoards his daily bills from the hospital in Hangzhou, a lakeside city near Shanghai whose prosperity draws migrants from around China.

When Li gets better, he will travel 800 km to his hometown to see what, if any, of the costs he can claim through a new insurance scheme that provides patchwork cover to millions of migrant workers but which is linked to their hometowns.

One illness can ruin a Chinese family, driving everyone -- from well-paid white collar employees at foreign firms to migrant construction workers and hard-scrabble farmers -- to save around 40 percent of household income for a rainy day.