Globally, China’s rate of catastrophic health spending is among the highest, far exceeding the 13.2% average recorded in 2017. By comparison, Russia and Malaysia, two countries with similar per-capita GDP, reported rates of 7.7% and 1.5%, respectively.
Across China, many families are facing a severe financial crisis due to crippling health expenditures, impacting household finances and economic growth. The high costs of treating chronic and serious illnesses are forcing families to cut back on consumption, which complicates the government’s efforts to boost domestic demand and sustain economic expansion.
In the village of Mashihaiwang, 70-year-old farmer Wang Jinchen represents this alarming trend. Bedridden with uremia, which results from kidney failure, Wang requires dialysis three times a week, costing over RMB 1,700 (approximately $233) monthly. Although he has insurance, it covers less than a third of his medical expenses, leaving his family to bear the burden. Wang’s and his wife Yuan Dinglai’s modest monthly pensions make it hard for them to afford basic necessities, let alone medical care. Yuan, who has had to stop farming to care for Wang, reflects their difficult situation amidst the cramped and deteriorating conditions of their home. Wang’s plight is shared by many.
Research published in The Lancet shows that China experiences disproportionately high rates of catastrophic health expenditure compared to other countries with similar economic levels. While health coverage has significantly improved—rising from 13% in 2003 to 95% in 2023—gaps remain, especially for chronic illnesses like diabetes and hypertension. These gaps are pushing households into financial distress and limiting consumer spending, which is vital for economic growth.
Despite advancements in healthcare over the last two decades, particularly in reproductive health and infectious disease management, the coverage disparity for chronic and severe illnesses remains concerning, particularly for rural populations. A 2023 study documented an increase in households facing catastrophic health expenditures, rising from 20.4% in 2007 to 21.7% in 2018. The increase is even steeper for rural families.
Globally, China has one of the highest rates of catastrophic health spending, surpassing the 13.2% average recorded in 2017. In contrast, Russia and Malaysia reported significantly lower rates—7.7% and 1.5%, respectively. Contributing to this problem are high hospital costs due to increased investments in healthcare that have led to costly diagnostic tests and hospitalizations, which are notably higher than the global average. Many families find themselves unable to manage medical expenses, prompting them to save more and cut back on consumption.
The Chinese government, prioritizing investments in strategic industries over social welfare, faces a challenging balancing act. Although welfare spending has increased, it remains below levels seen in many developed nations. President Xi Jinping has expressed concerns about excessive welfare, labeling it as potentially fostering complacency.
In Mashihaiwang, Wang and Yuan continue to survive with help from their financially strained children, who lost jobs amid the real estate crisis. Despite efforts such as crowdfunding, they cannot fully meet Wang’s medical expenses. Yuan expresses a grim resignation to their situation, emphasizing the emotional and financial toll of choosing between healthcare and survival.
Experts have warned that if the financial burden of medical costs is ignored, it could lead to long-term repercussions for millions of families. As the Chinese government deliberates its fiscal priorities, countless families remain caught in a cycle of struggle, highlighting the urgent need for systemic changes in healthcare access and affordability.
