The Role of the Public and Private Sectors in China’ s Health Care System Michael K. Gusmano 1 Published online: 3 August 2016 # Springer International Publishing 2016 Abstract In 1949, China established a government-run health system with an emphasis on primary care and preven- tion. The economic reforms of the 1970s led to a dramatic reduction in public expenditures and undermined the public health and health care systems of the country. In 2009, the government reversed course yet again and established several social health insurance schemes. The country has expanded social health insurance to the vast majority of its 1.3 billion citizens, but public spending remains low. The continued re- liance on private financing generates inequalities in access to health care. The delivery system is Bmixed^ with a dominant role for public sector institutions, but the reliance on private financing means that public hospitals and clinics are insuffi- ciently attentive to public goods and addressing the needs of vulnerable patients. Keywords Government-run health care . Regional health care . Bmixed^ system . Marketization and inequality Since the establishment of the People’ s Republic of China in 1949, China’ s health care system has undergone several trans- formations. After the revolution, Mao Zedong and the Chinese Communist Party (CCP) established a government-run health system with an emphasis on primary care and prevention. The economic reforms of the 1970s led to a dramatic reduction in public expenditures and undermined the public health and health care systems of the country. After the outbreak of se- vere acute respiratory syndrome (SARS) in 2003 and an embarrassing assessment of the lack of equity within the Chinese health system by the World Health Organization (WHO), the Chinese government reversed course yet again and established several social health insurance schemes. Although this latest health reform has led to nearly universal health insurance country, the coverage is often described as Bshallow^ because it offers limited financial protection and varies significantly across the country. Furthermore, despite investments in public health and primary care, many health care organizations still rely on revenue from pharmaceutical companies and medical device manufacturers. This raises questions about the efficiency and quality of health care in China. Today, the finance and delivery of health care in China is mixed. Government spending has grown, but represents less than one third of total health expenditures. Private health in- surance is also limited in China, but out-of-pocket payments are large. In terms of health care delivery, the system is still dominated by public institutions for both inpatient and outpa- tient care. Yet, despite negative experiences with market- based solutions in health care during the 1980s and 1990s, the Chinese government has relaxed restrictions on foreign investment in health care and the private system is growing. In this paper, I review the evolution and structure of China’ s mixed health care system and provide a brief assess- ment of its performance. In the first section, I outline the current financing and delivery systems. In the next four sec- tions, I describe the evolution of the system from 1949 to the present day. Finally, I discuss the limitations of the 2009 health reforms and summarize evidence about health care in- equalities in China. * Michael K. Gusmano mkg93@sph.rutgers.edu 1 School of Public Health, Rutgers University, New Brunswick, NJ, USA Glob Soc Welf (2016) 3:193–200 DOI 10.1007/s40609-016-0071-3