聊聊人口、民族、医疗和疫情救治Demographics, National Character, and Healthcare: Notes from an Epidemic

May heaven bless China, help our nation beat back this epidemic soon, cut through the waves, and rise to glory once more.

Before We Begin

Lately I've been reading a book on demographics; there was the recent doctor-stabbing incident; and now this sudden outbreak. Sum it all up and it's all about people — human causes, requiring human solutions.

How We Will Age and Depart: Japan's Cautionary Tale and a Grim Population Problem

In the early years of Japan's "lost two decades," many scholars believed Japan's problem was mainly a financial crisis brought on by the bursting of the real-estate bubble, plus a too-rapid currency appreciation after the yen was floated, which hurt its export competitiveness. Once the crisis passed, they thought, Japan could rely on its formidable strengths to revive its economy. But it now looks like neither was the root cause.

A financial crisis generally lasts around three years; the most severe in history — America's Great Depression of the 1930s — lasted only about twelve, while Japan's has now dragged on for nearly twenty. Over the past two decades, Japan's economy has been weak but has consistently run trade surpluses. By the 1990s, Japan was no longer competing with China on labor costs but with the U.S. and Germany on technological innovation. The reason Japanese firms lost out is that they missed one wave of new technology after another.

The reason widely accepted today is this: Japan's twenty-year slump stems from a loss of its capacity for innovation and entrepreneurship, and that is closely tied to the aging of its companies and its society.

(Figure in original — a chart of Japan's postwar economic growth rate against its elderly-population index.)

Figure 4-1 charts Japan's postwar economic growth rate against its degree of aging. You can see that Japan's aging accelerated sharply after the 1990s, and at the same time its growth rate fell to around 1%. Japan became the world's "champion" of aging in the 1990s, driven by the steady rise in postwar Japanese lifespans and the drastic shift in the birth rate.

From another angle: Japan's old enterprises can stand amid the economic torrent for a hundred years or more, and their craftsman's spirit is genuinely admirable. But now there's an obvious break in the ranks of Japanese firms. Those craftsman's-spirit family businesses are only representatives of the small and beautiful; they can't hold up the economic development of Japanese society as a whole.

The so-called craftsman's spirit is, to some degree, a kind of "regression" — anti-industrialization, anti-scale. The aging of the workforce, combined with a rigid promotion system, sapped the vitality of Japanese firms and led to their defeat in the innovation contest against young American companies.

(Figure in original — China's projected 2040 population structure compared with Japan's in 2008.)

Comparing the two in the figure, you can see that China's population structure in 2040 will be extremely similar to Japan's in 2008.

Looking at China's population structure across the ten- and forty-year horizons: by 2040, though the total population will still hold at around 1.4 billion — slightly higher than now — the elderly population will rise from 171 million to 411 million, and the working-age population (20 to 60) will fall from 817 million to 696 million. The most vital 20-to-40 cohort will drop from 436 million to 302 million, a decline of more than 30%.

The aging of China's workforce tracks Japan's trend very closely. By 2025, the structure of China's workforce will be as old as Japan's workforce in the 1990s, and by 2040, China's workforce will be older than Japan's. If Japan is the cautionary tale, then China's economy will start suffering the heavy blow of a lack of innovation and entrepreneurship from 2025 on.

Many people assume that in the first 30 years after the founding of the People's Republic, we had too many children and the population grew too fast. But in fact, China's share of the world's population in 1950, 1980, and 2015 was 21.8%, 22.1%, and 18.7% respectively. Across the 30 years from 1950 to 1980, the Chinese share rose by only 0.3 percentage points; from 1980 to 2015, it fell by 3.4 points — the rate of decline in the later 30-odd years was ten times the rate of increase in the earlier 30.

What's more, in those first 30 years China's population grew faster only than the U.S., Japan, and Eastern Europe, all of which had once experienced population explosions, and far more slowly than almost every developing country. Although China's 1.375 billion people in 2015 were 2.49 times the 552 million of 1950, the 16.55 million born in 2015 were far below the annual average of more than 21 million born each year in the 1950s. If China's average life expectancy had stayed at its 1950s level, China's total population today might even be lower than it was in the early 1950s.

Over the past 30-odd years, China's annual number of births has shrunk dramatically overall. According to the 2010 census, the 80s, 90s, and 00s cohorts number 219 million, 188 million, and 147 million respectively. From the 80s to the 00s cohort — less than a single generation — the population shrank by 33%. Shanghai's registered-population fertility rate is currently the lowest in the world — 0.7, meaning each couple has only 0.7 children; in other words, the next generation of Shanghai's registered population is only one-third the size of the last.

The universal two-child policy will bring a brief, limited pileup rebound in births, but after that, because the number of women aged 22 to 30 — the peak childbearing years — will shrink by more than 40% over the next decade, even fully opening up births, or even vigorously encouraging them, cannot avert a cliff-edge plunge in the number of births.

Beyond the coming sharp shrinkage of the total population, China's demographic problem is far more complex. It shows up mainly as severe under-fertility and aging — that is, a sharp drop in the share of children in the total population and a sharp rise in the share of the elderly. In demographic terms, the share of those aged 0 to 14 can be called the degree of under-fertility (the lower the share, the more severe it is), and the share of those over 60 the degree of aging (the higher the share, the more severe).

The National Bureau of Statistics' 2018 Statistical Communiqué on National Economic and Social Development shows that as of end-2018, China's population aged 0 to 15 was 248.6 million — 890,000 fewer than the population over 60. This was the first time China's elderly population exceeded its child population. The National Strategic Study on Responding to Population Aging projects that China's over-60 population will reach 300 million and 400 million in 2025 and 2033 respectively, rise to 487 million by 2053, and hold steady at around 400 million through the second half of this century — about a third of the total population. Before 2070, China will remain the country with the most elderly people in the world.

Even with the two-child policy fully in place, China's 2018 birth rate still hit a new low since the founding of the People's Republic. New births in 2019 were only around 16 million. From 1982 to 2000 to 2015, China's under-fertility share fell and fell again: from 33.6% to 22.9% to 16.5%, while the aging share rose from 7.63% to 10.5% to 16.1%.

The falling share of children and rising share of the elderly have two causes: one is longer life expectancy; the other is a long-run low birth rate. According to 2015 UN data, among the 201 countries and regions listed, China ranks 71st in life expectancy — upper-middle — but ranks 45th and 65th in degree of under-fertility and degree of aging, both higher than its life-expectancy ranking. This shows that, compared with other countries, the cause of China's severe under-fertility and aging is a long-run low birth rate, not longer lifespans.

A low birth rate can produce a demographic dividend, but it isn't sustainable. The demographic dividend is usually measured by the dependency ratio — the number of non-working-age people (children under 15 and the elderly over 64) relative to the working-age (15 to 64) population in a society. The lower the dependency ratio, the fewer children and elderly each worker has to support, so per-capita income is higher, which produces the so-called demographic dividend.

China's "one-child policy" caused dramatic swings in China's fertility rate and dependency ratio over the past 30 years. From 1985 to 2015, under the combined effects of the one-child policy, rising urbanization, and rising female educational attainment, the number of children fell rapidly, and the dependency ratio dropped from 44% to 37%. Over the past 20 years, China's economy has enjoyed a huge demographic dividend — but this was only a short-term effect.

Because fewer children today means fewer workers 20 to 30 years from now. In 2011, China's number of workers peaked. After that, China's demographic dividend and dependency ratio will rapidly rise and reverse. From 2015 to 2040, China's dependency ratio will climb quickly from 37% to 60%. A rising dependency ratio — especially a rising old-age dependency ratio — will place a heavy fiscal burden on pensions and healthcare spending, which will inevitably mean higher taxes or a higher retirement age. This will consume vast government resources and drag on China's economic development.

To meet the growing demands of old-age care, the government has the following options:

(1) raise taxes; (2) increase deficits; (3) reduce benefits for the elderly; (4) raise the retirement age.

Raising taxes would sap the economy's vitality, especially the vitality of the young; increasing deficits doesn't address the underlying problem, since deficits must ultimately be repaid through higher taxes; and in an aging society, cutting benefits for the elderly is usually political "suicide," because elderly voters wield powerful political clout.

Many argue that, with average lifespans exceeding 80, today's elderly are healthier than ever, so working to 70 isn't a big problem — meaning the pension shortfall can be closed mainly by raising the retirement age. But if more and more elderly stay in the labor market, it brings a side effect: as political power and social resources tilt increasingly toward older workers, society as a whole becomes more conservative, and innovation and entrepreneurship inevitably suffer. This negative effect of an aging workforce is the main reason Japan's economy fell into its "lost decades."

Why the Population Is Declining

Economic development inevitably drives down both the total population and the birth rate. There are three main reasons:

(1) First, as the economy develops, society demands ever more education of people, so the cost of raising children — especially high-quality children — keeps rising.

(2) Second, as the economy develops, women's educational attainment and labor-force participation keep rising. In many developed countries, the share of women receiving higher education has already caught up with or surpassed men's. The more time and energy women pour into education and career, the lower the birth rate.

(3) Finally, the rich social and recreational life of modern city living further squeezes the time available for family life and raising children, and many young people choose to marry late or stay single.

In sum, most parents lack the energy, the money, and the will to raise more children — and this is nearly a universal law of development across all countries.

I've also "interviewed" some friends and women around me, asking whether they want to marry and have children. The conclusion: the share willing to marry is higher than the share willing to have children.

At bottom, the core factor shaping attitudes toward childbearing is its cost. But here's an important problem: many of us today have a skewed — or at least imprecise — understanding of the cost of childbearing. In modern society, we set up all sorts of hurdles for ourselves around having children, inventing all manner of difficulties, while overlooking what a child truly needs: a warm family, and the right kind of love from parents.

And this doesn't require high social status or exceptional financial means. Evolution endowed us with this need; in the process of raising children, a part of our own life is inherited and continued too, and nothing else can take its place.

Women's unwillingness to have children is, in fact, a systemic social problem. 1) Rising child-rearing costs come, first, from blind status competition, and second, from the scarcity of and underinvestment in educational resources (teachers and schools). 2) The workplace is extremely unfriendly to pregnancy and childbirth: women of childbearing age get asked whether they plan to marry and have kids; married women get asked whether they plan to have kids; women who've had kids get asked whether they can return to pre-childbirth form and who's looking after the child. Add it all up, and under workplace pressure women are forced to marry and give birth late, or to give up having children.

From a cost standpoint, firms' behavior is "understandable": facing market competition and national policy, firms need to survive, can't bear this cost, and can only pass it on to women — which shows up as workplace discrimination. But if firms won't shoulder the cost of women's childbearing, then shouldn't the state do something? After all, with the birth rate declining year by year, an aging population, and a shrinking workforce, the whole nation's future is at stake.

In many Western countries, the government is already acting: subsidies to lower the cost to firms of female employees having children; equal-length parental leave for both spouses (in some cases men are required to take it), to ease the burden on women during maternity leave and childcare and head off the workplace discrimination it brings; and a supporting childcare system (China, too, had workplace-affiliated nurseries in the 1980s and 90s) so working parents have no worries at their backs. The government will inevitably have to make more effort on the childbearing question and roll out more of these supporting policies.

Now let me address a few "stereotypes" that come from having lots of people.

Crowded Cities

Urbanization means more and more people live in cities, and cities grow ever more crowded, so many people hold the stereotype that "China has too many people." In fact, urban population density has nothing to do with national population density.

Russia and the U.S. are vast and sparsely populated, yet Moscow's and New York's population densities are in no way inferior to Beijing's or Shanghai's. In fact, China's crowded places are basically concentrated in large and mid-sized cities; small cities, most towns, and countless villages are not crowded at all.

Urban population density is high because of the agglomeration effect. In big cities you can enjoy convenient public facilities, a rich and varied life, and more and better career opportunities. The agglomeration effect shows up even more strongly today. Over the past 20 years, metropolises worldwide have generally drawn in more migrants. So even if China's total population were smaller than it is now, the populations of Shanghai and Beijing would still keep growing.

Controlling and reducing China's population won't ease the many problems of first-tier cities. On the contrary, the fact is: a populous country forms more cities of varying sizes, giving people more choices. In China, someone who doesn't like Beijing or Shanghai can still go to Chengdu, Hangzhou, Wuhan, Xi'an, Chongqing, and other big cities; in Russia, apart from Moscow and St. Petersburg there's almost no choice — the other cities are on the small side, their lives monotonous or unfit to live in.

If China's population fell to a few hundred million, the share of young people flooding into first-tier cities wouldn't drop, but small and mid-sized cities would shrink to a few hundred thousand people, many would decay all the faster, and the number of cities people could choose from would fall sharply.

Beijing Has Too Many People

Many people say: Beijing's subway mileage already surpasses Shanghai, Seoul, and London — first in the world — yet the streets are still jammed and the trains still packed, so people naturally complain there are too many people and demand population controls. This logic doesn't hold up either.

For instance, during Spring Festival, with huge numbers of out-of-towners heading home for the holiday, you can practically lie down on a Beijing subway, and you can drive 90 on the Second Ring Road. Many feel it'd be wonderful if Beijing always had this few people. The hidden assumption is that if there really were always this few people, the subway would still have this many lines and this dense a schedule. This is the classic illusion of viewing a macro problem through a micro lens — looking at the effect of a smaller population while assuming external conditions stay unchanged.

If there really were always this few people, Beijing's GDP wouldn't be this large, the need for and financial capacity to build subways wouldn't be this strong, and Beijing wouldn't have such a dense network of subway lines and schedules. If you want to see what would actually happen if Beijing lost half its usual population, you should look at cities that currently have half Beijing's population. Take Guangzhou: its built-up area's population is roughly half Beijing's, and its subway mileage is also about half Beijing's.

In fact, it's precisely because of its huge migrant population that Beijing has boundless vitality. The various problems brought by Beijing's population concentration are a consequence of rising efficiency, and have little to do with the national total population. Manhattan's population density is higher than that of Xicheng, Beijing's densest district, but no one, seeing how crowded Manhattan is, thinks of reducing the U.S. population.

(Figure in original — China's and America's 2040 population structures at a glance.)

More People Doesn't Actually Get in the Way of Shared Prosperity

For any government, education spending is only a small share of tax revenue — generally far smaller than old-age spending. In the U.S., taxes are 26% of GDP, education spending only 5%, while old-age spending exceeds 12% of GDP. Because the U.S. birth rate has long sat at replacement level and its age structure is basically stable, these ratios can roughly reflect an individual's impact on government revenue and spending across the arc from birth to old age.

China's taxes are currently around 20% of GDP, and education spending around 4%. Because China's birth rate has long been far below replacement, the share of workers in the total population will fall sharply in future and the share of the elderly will rise sharply, so China's future spending on supporting the elderly will far exceed 10% of GDP — severely squeezing the country's investment in defense, research, and infrastructure.

Take the wealth an individual creates or consumes over a lifetime as one unit: to have a child, the government must invest 5% to educate them, but can collect 26% in taxes and ultimately spend 12% supporting them in old age, leaving 9% to invest in defense, research, or the creation of more social resources. Overall, what the government or society gains from an individual exceeds what it spends. This conclusion isn't surprising at all, because for society, a person isn't purely a burden but, even more, a contributor. Before working, a person is a burden; after starting work, they create social wealth; entering old age, they become a burden again — but on the whole, a person contributes more to society than the burden they bring. That is precisely the fundamental reason the world's population keeps growing while humanity as a whole keeps advancing.

Therefore, restricting children's births may look like it saves on rearing costs in the present, but it drastically cuts the force that drives society's future progress — a short-sighted, kill-the-hen-for-the-egg move.

Conclusion

Fully opening up childbearing carries no risk. Most crucial of all, we shouldn't treat childbearing as some flood-beast menace. In Western countries with birth rates far higher than ours, a baby boom is treated as a social blessing, because they understand: children are the most precious resource. Natural resources can be bought on the market; only a nation's own children must be borne and raised by itself. Even if handling the birth rebound takes some effort, the future returns will far exceed it.

What we truly need to worry about isn't a brief rebound in births after opening up, but that a few years later the number of newborns will avalanche downward again. Beyond the fact that the birth rate falls back after compensatory childbearing ends, the reason is the sharp drop in women of childbearing age, and behind that: the rapid fall in the birth rate in the 1990s means that mothers from the "post-90s" cohort will shrink by about half in under a decade. This great slide will severely worsen aging and intensify the future population decline. If large numbers of families have only one child, or none, then a family's ability to weather risk is very weak; the most extreme case is families who lose their only child, and over time these bereaved families will become an ever-larger social problem.

You don't really think that in old age you can rely purely on yourself, the government, and nursing homes, do you?

(Figure in original — China's and India's 2040 population structures at a glance.)

For the share of people over 65 to rise from 7% to 14% took France 115 years, Britain 47, Japan 24. And China? The latest estimate: just 21.

The first thing we must grasp is that China's lead time to prepare for an aging society is extremely short — compared with the decades or even century the West had, our aging is coming far too fast. Although Japan entered an aging society 20 years before China, the Japanese were prepared: they got rich before they got old. After decades of high-speed postwar growth, Japan had the economic strength to carry society's old-age needs.

(Figure in original — the aging speed of four major countries.)

Japan has a universal insurance system — kōsei nenkin. You start paying at 40; men pay for 25 years, women for 20; after retirement this pension links directly to nursing homes. High national medical subsidies, kōsei nenkin, plus personal savings mean many Japanese elderly can retire with peace of mind.

Looking at the elder-care industry: Japan's nursing-home system is fairly mature, and Japan's elder-care industry mainly targets the B end, so a single elder-care-bed company can become the world's number one. China's home-based elder care, in reality, leaves the old with no one to care for them; the elder-care industry faces the C-end consumer, which is why you get the so-called "Chinese auntie" consumer bloc, why even square dancing becomes an industry, and why countless elderly are conned by health supplements and mired in financial fraud.

They call it the "silver economy," but in fact this trillion-yuan-plus elder-care industry has yet to produce a single corresponding listed company.

A strong youth makes a strong China. Without the support of the young, everything else is water without a source, a tree without roots. Facing the future, raising the birth rate is the true way out of the population and aging problem. Whether it's great-power status or green mountains and clear waters, only what we leave to the young holds a future China.

Why Do We So Rarely Prevent Risk and Only Ever Fight to Eliminate Crises?

The era we live in is a risk society. A risk society is a stage of social development in which, against the backdrop of globalization, global risks arising from human practice hold the dominant position — a society in which all manner of global risks pose grave threats to human survival and development. In a world of risk, the danger is objective, the probability is constructed, the consequences are real.

The unintended consequences of modern social development — modern risks — are precisely the result of the interaction of many factors: modern science, technology, industry, the state, capital. And these factors act in combination, the key being a lack of careful consideration in decision-making of the unintended consequences and the aftermath of the decisions. Therefore, to nip risk in the bud and avert the risks of a risk society, we must start by rethinking decision-making.

Seventeen years have passed. Today we have hundreds of millions on social media, world-leading 5G, advanced artificial intelligence, "mind-reading" big data, and all-powerful converged-media platforms — yet Chinese society still handles this with a traditional emergency-response method. That is: once a risk turns into actual harm, mount a broad mobilization of massive manpower, materiel, money, and brains to reduce the spread of harm, treat the wounds, arouse goodwill, and win support.

Someone asked: "If someone traveled back to Wuhan a month ago, could they save us from this disaster?"

Answer: No. They'd become the ninth person accused of spreading rumors.

Why do other countries not have this, while China is prone to large-scale viruses?

First, ordinary people are superstitious and have poor dietary habits — afraid of nothing, willing to eat anything, even without inspection. This is unimaginable in other countries.

Second, ordinary people have poor self-protection awareness, lack basic media literacy, and have weak information-discernment ability.

Singapore began screening arrivals from Wuhan on January 2, and foreign media began large-scale reporting on the Wuhan outbreak on January 7. But ordinary Chinese people simply had no self-protection awareness and lacked the ability to discern and judge information; the views of the netizens in the figure below basically capture ordinary people's capacity to process information since January 7.

At any time, the self-reliant become the mighty. If you yourself are foolish, don't blame the government first.

At home, the ones who do this best are Shanghai and the people of Shanghai. In some ways, they're rather like the Anglo-Saxons.

Shanghainese have an extremely strong sense of protecting the community's public interest. Locals rarely concern themselves with affairs of state; they mull over the things right beside them — whether public services are good, whether environmental protection is adequate, whether the vegetable prices in their own neighborhood are reasonable, whether disease is circulating in the community clinic — matters that touch them directly.

At the slightest bit of bad news — never mind a novel coronavirus, but even something like unhealthy meals for the kids, a bad actor breaking into a school, a reeking dumpster — Shanghai's uncles and aunties blow up, all kinds of public opinion starts to churn and respond, people organize to look into it, and they force the government to take it seriously and disclose information.

In Shanghai, the concept of public interest is extremely strong. It's almost impossible for the Wuhan scenario to happen — where eight informed people revealed such a terrifying situation and local residents remained indifferent and numb, and where the grassroots government could conceal it and turn a blind eye. There's a true story from my social feed: a Hubei native stayed in Shanghai over Spring Festival instead of going home. During their stay, they were phoned in turn by their apartment, a Shanghai police station, the district of their household registration, the neighborhood committee, and even the driving school, all asking about their travel before and after the holiday. To handle things this personally, this thoroughly, down to the last detail — Shanghai is surely the only place in China that does it, "second to none."

By contrast, in the vast majority of cities most people severely lack this kind of community awareness and sense of public interest. They pour little attention into the affairs right beside them, and focus the overwhelming majority of their attention on national and international events far removed from them — and on those issues they have the strongest urge to speak out and the most heated words.

So when someone risks disclosing an epidemic, local residents turn a blind eye, in one ear and out the other, with the mindset that it's everyone's business anyway, someone else will handle it anyway — and the people who care about these public interests end up looking "stupid" instead. This is unimaginable in Shanghai. In such circumstances, the public pressure on the local government naturally can't compare to that on the Shanghai government.

Many praise Shanghai's municipal governance without knowing this is the result of long-term, high-quality interaction between officials and citizens. It's the citizens' concepts and awareness that drive and determine how the government governs, not the other way around.

The American public is the same — they rarely concern themselves with international affairs. Many Chinese have probably felt it: after arriving in the U.S., they discover — where's all that American imperialism we were promised? Why are Americans so ignorant? Many of them don't even know where China is.

This is Americans' nature and character: from the very question of whether to enter World War II. Americans rarely spend time on things unrelated to them, but they care intensely about matters closely tied to their own interests. Most Americans don't care what's happening in the world, or how China's or the EU's economy is doing; they care more about their state, their city, their county, their community. The closer the public affair is, the more it concerns the people and family around them, the more they care.

Because ordinary Americans care so deeply about affairs of their own state, city, and community that touch their interests, at the slightest rumor of a virus, local residents start tracing it to its source, ultimately pushing the government to keep following through and solving the problem — the strong yet ordinary national character of the Anglo-Saxons.

The Wuhan outbreak's earth-shaking change in ten days, from "a single spark" to "a raging prairie fire," is at bottom a problem of grassroots governance between officials and citizens, a problem of misaligned interaction between the two. Although officials bear most of the responsibility, that by no means implies the citizens have none and need not reflect. Local residents' degree of attention and passion for local public affairs is an important — even the main — path to the local government avoiding such failures in future; that is, the mindset and thinking of the citizens in fact determine the government's mode of governance, not the other way around.

The Pain of Public vs. Private

The first problem this outbreak laid bare is people's insufficient self-protection awareness; the second is the performance and role of public versus private hospitals, and China's healthcare-reform problem.

In 2015, the number of private hospitals nationwide surpassed public ones for the first time, reaching 21,000 by the end of 2018 — 63.5% of the total. But by volume of treatment, in 2018 private hospitals handled 530 million patient visits, only 14.8% of the total; the vast majority of care still took place in public hospitals. Money and equipment but no talent, along with poor policy implementation, lack of standardization, and inadequate oversight in some places, are the main reasons privately run medicine is plentiful but not strong.

The two biggest differences between public and private hospitals today lie in two areas:

① Public hospitals have the support of a strong system of doctors and medical education;

② Public hospitals have market trust and public recognition accumulated over years and years.

If there are other differences, they are:

① Private hospitals charge more and offer somewhat better service;

② Public hospitals shoulder more social obligations; private hospitals shoulder far fewer.

③ Doctors at public hospitals earn less but get more in career advancement and honor; doctors at private hospitals earn more, but their social recognition and status are far below those at public hospitals. This is determined by the medical-education system and the standing of public hospitals; if the private-hospital system had a big boss pour in vast sums to build its own medical-education system and hospital scale, it could achieve the same effect too. But that would, first, take time, and second, require earning public esteem for itself.

Why, at present, are public hospitals so important?

Because public hospitals are the only ones conveying the core value of "curing the disease." In healthcare supply, traditional Chinese medicine takes a big chunk but produces little; private hospitals have risen sharply (about 50% of the total by number), but of those that truly solve people's problems and have a good reputation, how many are there? The core competitiveness of the vast majority of private hospitals is the hospital's décor and parking lot. In the end, anyone who can't get cured elsewhere goes to a public tertiary hospital; those delayed by traditional medicine, those cheated and mistreated at private hospitals — in the end it's public hospitals that have to clean up the mess.

Since the outbreak, hordes of media figures and the self-media crowd riding the wave have righteously blasted Wuhan hospitals for "not a bed to be found." Yet before this, it was precisely these same people who blasted public hospitals for being too large and demanded strict controls on the number of public-hospital beds (to hand the market to "private hospitals" — mainly the Putian system, really).

This isn't without a cautionary precedent.

The former member of the Yunnan Provincial Party Standing Committee, Party Secretary of Kunming, and Deputy Party Secretary of Yunnan was sentenced in 2016 for graft and bribery. What made Qiu He's name was his "Suqian healthcare reform." During his time in Suqian, Qiu He pushed sweeping healthcare and education reforms. The reforms Suqian ran back then sold public hospitals and schools to private owners — from the city hospital down to the township clinics, all sold to private hands, every public hospital sold off — and it was hugely controversial. The "Suqian model" of healthcare reform thus became known nationwide. Under Qiu He's rule, all 124 township public health clinics and 10 county-level-or-above public hospitals in Suqian were converted to private ownership. This reform was also called the "sell-it-all" reform.

After the sweeping reform, Suqian became the only prefecture-level city in the country with no public hospital. The result: locals went elsewhere for care, and nearly 30% of the profits of Jinling Pharmaceutical, owner of the area's largest hospital, came from Suqian People's Hospital — the reason isn't hard to guess. Later, the Suqian government offered 1 billion, then 2 billion yuan, but Jinling Pharmaceutical wouldn't sell, so the local government had no choice but to invest nearly 2 billion outside the urban area to rebuild a 2,000-bed hospital. And it wasn't until July 2016, when Suqian First People's Hospital formally opened, that Suqian had its "first" public hospital.

Qiu He's reforms, though loudly trumpeted on the surface, were extremely cagey in practice: the interest groups that truly needed to be touched, the interest relationships that truly needed adjusting, he didn't touch at all — he steered well clear.

First, the drug-distribution chain, with its layer-upon-layer markups and kickback red envelopes — the biggest reason healthcare is expensive — went entirely untouched. Second, the profit-and-revenue drive of large hospitals: Qiu He sold the hospitals, but it was nothing more than a change of costume — the director became the boss and went on being the director, went on chasing profit and revenue. The ones harmed were ordinary medical staff and ordinary people. After privatization, to control costs, the pay of ordinary doctors and nurses fell, but the medical burden on ordinary people didn't drop one bit.

Some ordinary people believe that so-called market-decisive forces in healthcare, put bluntly, just mean "they're not looking after us anymore." You used to hear a line: after healthcare is marketized (privatized), give it a discount, and the doctor (or teacher) can say to the customer: for your body (or child), can I offer a discount? Charge whatever they want.

Going back further, in the 1990s China let the Putian system expand and run wild while suppressing public hospitals. Many people bring up Taiwan, but during the 2003 SARS period, one of Taiwan's biggest scandals was private hospitals with beds refusing suspected cases. At 9 a.m. on April 28, the Chen Shui-bian administration convened an emergency meeting, and the first thing the head of Chang Gung Hospital said was, "This is a matter for you public hospitals — it has nothing to do with us private hospitals!" A private hospital in Taipei even hung out a sign to lure patients: "This hospital has admitted no SARS patients; please come with peace of mind."

At the height of the outbreak, private-hospital magnates banded together large private teaching hospitals to pressure the authorities to concentrate SARS patients in public hospitals, so as not to hurt business. This was the backdrop for the hastily arranged "ROC Songshan Hospital." Taiwan's chaos back then is worth taking as a lesson for mainland healthcare reform.

After the 2003 SARS episode, the government recognized that in the critical moment, you still have to rely on public tertiary hospitals. After that, the government no longer suppressed public hospitals as before, and with the spread of the new rural cooperative medical scheme and universal health insurance, Chinese healthcare improved greatly.

In recent years, once the scar healed, the pain was forgotten. Misled by public opinion, China has to some degree gone back down the old road of the 1990s — suppressing public hospitals, propping up the Putian system, weakening health insurance, and so on — leading to this round's "not a bed to be found" chorus.

In this Wuhan outbreak, the ones charging to the very front are Party members and cadres, the people's soldiers, and public-hospital doctors; it's precisely their vanguard, exemplary role that lets us unite as one with a single will. Suppose our hospitals were all private or foreign-owned, and the railways and highways private or foreign-owned — could we still respond to the disaster with such high administrative efficiency?

After the Wuhan outbreak, doctors from Shandong, Shanghai, Chongqing, and elsewhere rushed to help, but every one of them came from public hospitals — not a single one from the private hospitals that enjoy the backing of ten ministries and are half again as numerous. Not long ago those ten ministries made a great show of declaring: strictly limit the number of public hospitals, strictly limit public-hospital beds, strictly limit public hospitals acquiring large medical equipment, strictly limit public hospitals taking on debt, eliminate 1,300 public hospitals in ten years. This time we still have public hospitals — next time, who do we rely on?

The cold reality tells and teaches us (in today's China, at least) that healthcare and education — these two matters that touch millions of households and the nation's livelihood — cannot be over-industrialized or over-privatized. Otherwise, ordinary people's lives and children's education can't be strongly guaranteed.

That said, although Taiwan's chaos back then is worth taking as a lesson for mainland healthcare reform, Taiwan's reforms of that era still had much worth learning from.

Taiwan is a world-renowned medical center; of the world's top 200 hospitals, Taiwan has 14, second only to the U.S. and Germany, first in Asia. National Geographic produced the documentary Asia New View: Taiwan's Medical Miracle, introducing Taiwan's advanced medical technology and friendly medical service to the world, letting viewers everywhere witness Taiwan's medical miracle.

Taiwan's national health insurance is hailed as one of the best systems in the world. Health spending of 6.6% of GDP achieves an 84% public satisfaction rate; when The Economist assessed its world rankings, combining various indicators, it placed Taiwan second, behind only Sweden.

Taiwan's Chang Gung Memorial Hospital was a bomb dropped onto flat ground in a field once monopolized by public hospitals. From 1976 to today, Chang Gung has surpassed Taiwan's various medical-school-affiliated hospitals to become Taiwan's largest hospital system, spread across Keelung, Taipei, Chiayi, Taoyuan, Linkou, Kaohsiung, and more, and even entering the mainland market (Xiamen Chang Gung Hospital and Tsinghua Chang Gung Hospital). More remarkable still, the success of Taiwan's Chang Gung Hospital drew large amounts of capital into healthcare, ultimately overturning the fundamental landscape of Taiwan's medical industry.

How did Chang Gung Hospital do it?

1. Strictly ban red envelopes, stamp out bad medical practices.

In Chang Gung's early days, doctors were in short supply, and the giving of red envelopes was rampant. To fix this mess, Chang Gung mandated from its founding: physicians earn reasonable pay simply for doing their jobs, and it is expressly forbidden for anyone to accept red envelopes; violators would be dismissed on the spot, no leniency. Under Chang Gung's lead, the red envelope — once a familiar chaos in Taiwan's medical world — gradually vanished (this is fairly complex; I'll set it aside for now).

2. Pioneer paying after outpatient and emergency treatment; abolish the "hospitalization deposit."

From 1980, Chang Gung began implementing a treat-first, settle-later model, which was considered highly risky at the time. But thanks to Chang Gung's careful safeguards, the amount of unpaid bills was extremely small, prompting peers to follow suit. In 1983, Chang Gung directly abolished the hospital-deposit system; patients diagnosed as needing hospitalization were admitted for treatment directly, and if a patient couldn't bear the cost due to financial hardship, then after assessment by social workers, a social-welfare fund set up by Chang Gung would provide appropriate subsidy. Surprisingly, 90% of patients paid their bills voluntarily after discharge, and the share of non-paying patients was tiny.

3. Stick to the common-people route; drive corporate investment in healthcare.

Chang Gung was set up mainly to serve the low- and middle-income population — affordable fees, superb medical skill, service done right. In just three years it achieved a 15% profit margin, greatly encouraging other social forces to invest in hospitals. It quickly became Taiwan's most profitable and, at the same time, most patient-satisfying hospital.

After Chang Gung's success, Taiwanese private conglomerates, universities, and religious groups poured into the medical industry one after another, donating to build large privately run non-profit general hospitals. And they ultimately changed the ratio of public to private hospitals in Taiwan: from the original 8:2 to a reversed 2:8.

4. The "catfish effect" activates the healthcare-reform process.

Chang Gung's success demonstrated the high efficiency of private healthcare, lifted Taiwan's medical standards, raised public welfare, and activated the reform of Taiwan's medical system. The powerful competitive pressure Chang Gung's success brought to Taiwan's medical world led the authorities to allocate over ten billion in funds to subsidize public hospitals and strengthen public-hospital measures, while also spurring the various private hospitals to devote themselves to improving medical service. By 2011, private hospitals already accounted for 90%, providing medical services to the whole island and even the world.

5. Implement a physician-fee system to reasonably calculate physicians' pay.

From its founding, Chang Gung adopted a physician-fee system originating in the U.S. At Chang Gung, physicians aren't employees but partners, sharing the returns together with the hospital. Every staff member is an owner, with income and growth opportunities in direct proportion to their own effort. Private hospitals used to pay four or five times what public ones did; now, after public hospitals implemented performance-pay reform, doctors' salaries differ little from the private sector.

The prominent contradictions in mainland healthcare today are: hard to see a doctor, expensive to see a doctor, and tense doctor-patient relations. None of these three exists in Taiwan; ours are purely the result of mainland corruption.

1: Hard to see a doctor: In the process of mainland urbanization, the siphon effect is extremely pronounced. Big hospitals poach the good doctors from the grassroots; every doctor with a bit of skill concentrates in tertiary, provincial, or ministerial hospitals, so ordinary people run to big hospitals for illnesses large and small, packing the big hospitals and making it hard to see a doctor.

2: Expensive to see a doctor: When medical ethics go wrong — mainly the hospital leadership, out to make dirty money — they hand doctors drug-sales quotas and big prescriptions; even for a cold, they prescribe a huge pile of drugs. Doctors get both rewards from the hospital and kickbacks from drug factories — best of both worlds; who wouldn't do it? The patient's money all goes into their pockets — how could care not be expensive?

Doctors' (and teachers') incomes should be higher than those in ordinary industries, and transparent; strictly forbid revenue-chasing and money-grubbing, deal with each case discovered, punish severely, show no leniency. Accept public oversight, strengthen the building of laws and regulations and the education of medical ethics, and make clear that healing the wounded and rescuing the dying is every doctor's sacred duty. Taiwanese doctors' incomes are transparent, and every other crooked path is a dead end; a doctor's duty is to treat illness.

3: Doctor-patient relations run two ways. A few doctors have poor ethics, care only about making money, go through the motions, prescribe wildly without curing anything, and leave patients with a bad impression.

Solve the first two problems and doctor-patient relations will naturally improve.

Taiwan — a "tiny speck" only about the size of two Beijings — created a brilliant healthcare-reform miracle in a mere two or three decades, well worth our study and reference.

Finally

May heaven bless China, help our nation beat back this epidemic soon, cut through the waves, and rise to glory once more.