IS COMMUNITY FINANCING NECESSARY AND FEASIBLE FOR RURAL CHINA

The collapse of the Cooperative Medical System (CMS) in China after th e agricultural reforms of the early 1980s caused serious concern and d oubt about the viability of community financing of basic health care f or the low-income population. This paper examines the rise and fall of China's community financing schemes and ascertains the need for and f easibility of community financing. Of the Chinese rural population, 90 % now pay out-of-pocket for their health services. Both the problems w ith the fee-for-service system on the one hand and the observed advant ages of the existing community financing schemes on the other indicate the necessity and desirability of revitalizing community financing as a major rural health care reform strategy. However, the feasibility o f the community financing approach depends on adequate financial and s ocial resources. Our study found that there are multiple potential fun ding sources for health care in rural areas, including households, vil lage welfare funds, local enterprises, and the government. We designed several illustrative benefit packages and estimated their costs. It a ppears that a basic benefit package with high co-insurance would be af fordable if funds could be mobilized from multiple sources. More impor tantly, community financing would require governmental promotion and s upport.