The old lady might still be hesitating if she should have her liver disease treated, if not for the cooperative medical care.

Pang Chunxiang, 61, from the Beizhai Village of northwest China's Shaanxi Province, was glad to receive more than 9,000 yuan reimbursement for her surgery that cost her 23,814 yuan (about US$3,072), roughly tenfold of the poor farmer's annual earning.

Pang is only among millions of beneficiaries of the rural cooperative medicare scheme, launched nationwide after the outbreak of SARS (Severe Acute Respiratory Syndrome) in 2003.

Under the system, a farmer who is willing to take part in the program is to hand in 10 yuan a year out of his own pocket, while the state, provincial, municipal and county governments jointly put in another 40 yuan for the farmer.

The participant could have part of his expense reimbursed in case he is hospitalized. The rate of reimbursement varies according to different kinds of illness and the actual cost of medical expenses incurred.

In Shaanxi Province, the average rate is 35 percent and the fund has reached 612 million yuan (about US$78.6 million) since 2003, covering more than 12 million farmers, or 44.5 percent of the rural population in the province.

The total reimbursement was 390 million yuan (about US$50 million) last year, almost seven times of the amount in 2005, said Li Hongguang, head of the Shaanxi Health Department.

Cooperative medicare is not new in China. It was adopted by the government as a national policy in 1956 and had helped built one of the best rural healthcare networks in developing countries over the past decades.

A market-oriented reform since the 1980s, however, have led to the dismantling of the system. Without government support, rural hospitals and clinics had been left to struggle for survival. Many of them were simply abandoned as doctors looked for greener pastures.

Rocketing medical bills have pushed health service farther from farmers.

A survey by the Ministry of Health showed one third of poor rural patients choose not to go to hospital, and 45 percent of farmers in hospital ask to be discharged before they have recovered.

"With the co-op medicare system, an illness does not mean a catastrophe anymore," said Lu Zhenshan, a farmer in his fifties who claimed 30 percent reimbursement after having a heart surgery.

So far, China's central and local governments have invested over 18.9 billion yuan (about US$2.4 billion) into the medicare scheme to provide 400 million times of reimbursements to the farmers.

Nationwide, the system has covered 51 percent of the rural farmers, and will be extended to cover all the rural areas by 2008, according to Gao Qiang, the Minister of Health.

The new system also brought changes to rural clinics. In the Niudong Clinic where Lu Zhenshan attended, the hospitalized patients totaled over 60 last year, quadrupling the number in years before the program was launched. Among the patients, one third had chronic diseases, for which they had been reluctant to go to hospital before.

"If not for the co-op system, our clinic would be bankrupt," said Li Xiangmin, head of the clinic, noting that their revenue was 286,000 yuan in 2006, a sharp increase from the less than 200,000 yuan before. He is thinking of purchasing some new medical equipments.

But the national drive is also met with difficulties. "Many counties and towns do not have enough financial power to supply their portion in the fund," said Li Ling, professor from the Chinese Economy Research Center in Beijing University.

In addition, many clinics are in shortage of eligible doctors and equipments. In over 1,600 clinics in east China's Anhui Province, there are only 723 college graduates, less than two percent of the total number of doctors. Half of the clinics are not equipped with stomach pump and 30 percent without electrocardiograph.

Fund resources need to be expanded, and the funds from richer counties may need to be diverted to support the poor ones, Li Ling noted.

More efforts are needed to lower the costs of medicine, and support under-funded and poorly equipped village clinics, she added.

(Xinhua News Agency February 21, 2007)