World’s highest cancer rates threaten China’s economic boom

In In The News by Barbara Jacoby


BEIJING — As one of China’s wave of entrepreneurs, Xiao Caiyu built and ran a small pork business with her husband that allowed her to squirrel away a nest egg of more than 30,000 yuan (about $5,000).

A diagnosis of cervical cancer wiped that out in months. Her family, now deeply in debt, closed the business.

“If the cancer gets worse I won’t get treatment,” said Xiao, 52, a mother of three in southern China. “What treatment? There’s no money.”

Across China, families who have ridden the country’s economic boom to prosperity often plummet into financial ruin after a cancer diagnosis. In a nation where most people rely on government health insurance, cancer patients are finding that costs, including expensive drugs, far outstrip coverage.

Cancer presents a growing threat to Asia’s biggest economy. China has the world’s largest number of cancer cases and deaths, driven by a rapidly aging population, environmental pollution and lifestyle changes. If current trends continue, cancer could cost China about $5.6 trillion in lost output from 2012 to 2030, a group of researchers from the Harvard School of Public Health and other institutions estimated.

The Chinese government is now coming up with ways to bolster insurance coverage for diseases like cancer. But the changes aren’t happening fast enough for patients like Xiao.

After Xiao’s diagnosis in July 2013, her family’s life turned upside down. They closed their pork vending business so her husband could work two better-paying jobs to cover living costs. Her son left a job assembling flash lights and water boilers to take care of her. Buying meat for the dinner table has become a luxury.

Although cancer can put a hefty financial burden on patients worldwide, the scale of China’s problem is particularly daunting. Its rapid economic ascent has caused cancer rates to rise at a startling pace. Also, private insurance isn’t widespread, and Xiao’s family had none. That puts the burden on the families, and particularly working-age children. Many parents have only one son or daughter under rules set by the country’s one-child policy.

While China made some health insurance available for almost all its people by 2010, coverage for many major illnesses is limited. Citizens need to make co-payments at every level of the medical-care process: consultation fees, examination fees, scans, drugs and operations.

“The high cost of health care, especially cumulative costs for chronic conditions, is an issue of great concern,” said Martin Taylor, Beijing-based health systems expert at the World Health Organization. “Families in this situation can easily fall into poverty.”

Xiao — whose name means “colorful jade” — lives in the wealthy Guangdong province in southern China, where her insurance covers about 65 percent of fees and procedures. Even so, her treatment — a mix of chemotherapy and surgery — has forced her family to borrow as much as 40,000 yuan (about $6,450).

The family calculates that it has spent about 72,000 yuan out-of-pocket on her treatment since her July 2013 diagnosis and another 2,000 yuan on “red envelope” payments — the informal handouts often made to doctors in China to win better treatment. Their monthly income: 7,000 yuan. In Xiao’s village, those stricken with cancer often return home to die once they run out of money, her son Liang Mianchang said.

“Village folks like us are good for nothing,” Xiao said. “When we get sick like this, we just wait for death.”

The nation’s overall cancer incidence, which has doubled over the past two decades and is expected to continue rising, is “truly astounding,” said Yanzhong Huang, a senior fellow of global health at the Council on Foreign Relations.

China has an estimated 3.07 million new cancer cases annually, according to the World Health Organization’s cancer agency — a diagnosis every 10 seconds and 2.2 million deaths annually.

China is caught in a particularly difficult situation because it is an economy in transition, said Huang. The incidence of “cancers of poverty” such as liver or stomach cancer remains one of the highest in the world. Other types, like lung and breast cancer, which had traditionally been more common in the developed world, are growing more prevalent.

Xiao’s family has gradually paid back about a third of what they borrowed. But there are still daily expenses to be juggled. “We buy less stuff now,” Xiao said, dipping her feet in hot water infused with ginger, trying to stay warm on a cold, wet day. “I just wear old clothes, and spend less on food. My husband and son need to work, I can’t not give them food, can I?”

The practice of Chinese families putting money aside for health-care emergencies and old age has long placed pressure on consumption. The previous generation of leaders implemented the health-care reform in 2009 mainly to balance social and economic development, said CFR’s Huang. The Confucian tradition of taking care of one’s parents also puts an unusual amount of pressure on children.

“No young people in England or Germany will think of saving money for medical costs at all,” said Shenglan Tang, professor at Duke Global Health Institute. “In some areas of the Chinese constitution it even says children have responsibility to take care of aging parents.”

Under the leadership of Mao Zedong, China had a state- planned health system. Urban workers counted on their work units to pick up bills at public hospitals while villagers in communes had “rural cooperative medical systems” with mostly free healthcare, albeit of questionable quality. In the 1980s and 1990s, out-of-pocket payments rose dramatically with market reform and the collapse of the commune system.

In addition to increasing insurance coverage for major illnesses, China is trying to bring in commercial insurers to partially reimburse residents for out-of-pocket payments, its National Health and Family Planning Commission said in an e- mailed reply to questions from Bloomberg News.

Even as the Communist Party’s leadership is increasing reimbursement levels, it is doing so gradually and incrementally. China wouldn’t be able to completely adopt a welfare-state model without going bankrupt, said Tang.

In China, non-communicable diseases cause eight in 10 deaths, according to the World Health Organization, higher than the six out of 10 globally.

While cancer is a fast-growing pharmaceutical category in China, the newest, life-extending brands are out of reach for most, according to Richard Yeh, a health-care analyst with Citigroup. Multinationals accounted for about 34.4 percent of the cancer drug market in 2013, Yeh wrote in a June note. Domestic firms are emerging with generic alternatives, serving the more general population.

Xiao’s medical receipts show that co-payments for drugs were her biggest expense. “There’s a real disparity between need and cost of medication,” said Angus Cole, a consultant at Deloitte China.

While drug companies have devised cost-sharing and insurance plans and even charities are offering help, many patients still struggle to bear the costs.

Early on in Xiao’s treatment, her son had wanted to get a second opinion and then faltered partly on concern that the extra tests and bills wouldn’t be covered by insurance.

“By ourselves we don’t know which hospitals are good and which aren’t, and we don’t have guanxi,” he said, using the Chinese word for connections that can win favors in the medical system.

After the surgery and treatment, Xiao’s most recent tests haven’t detected cancer, although she continues to receive some chemotherapy.

There have been times during the treatment when she felt like a burden, and thought that she should let nature take its course.

“Our savings are all used up and it makes my kids, my son, carry a lot of debt,” said Xiao. “Wouldn’t you think about giving up if you were me? But the kids said I had to do it, so what could I do?”
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