For many years, China had a fairly successful cooperative medical system. When that system was dismantled, costs rose dramatically and no one paid them. As a result, 100 million people lost their insurance coverage [source: Lowrey]. The cost of going to the hospital was often enough to put people paying out of pocket into bankruptcy. Particularly stark was the difference between health care in rural and urban areas. The rural farmers were more at risk for conditions such as avian flu but lacked the resources of the urban professionals to pay. Clinics outside of major cities fell into disarray, and even a plan to have farmers pay the equivalent of $1 for a year of medical care failed, with the Chinese complaining that such a fee was too expensive [source: French].
Now, China is in the midst of a major health care reform initiative aimed at these problems. While reforms will continue until 2020, there are some immediate goals. The government is paying $124 billion (850 billion yuan) to ensure that 90 percent of the population has health insurance by 2011 [source: The Economist]. The country will also build 700,000 new clinics [source: Lowrey]. According to the Economist, one major hurdle on the road to reform will be who ultimately foots that $124 billion bill. Right now, only 40 percent of the funds are slated to come from the central government, and provincial governments may be unwilling to pay the rest [source: The Economist].