Dr. LI Ling is Professor of Economics and Deputy Director of the China Centre for Economic Research (CCER), housed within the National School of Development, Peking University. Professor Li has an M.A. and a Ph.D. in Economics from the University of Pittsburgh. She also has an M.A. in Economics and a B.S. in Physics from Wuhan University. She serves an advisor to the Ministry of Health of China and an expert consultant on China’s healthcare reform for the World Bank. From 2000 to 2003, she was a tenured Associate Professor at the Department of Economics, Towson University. She has also been a faculty member of the Department of Management and Marketing at Hong Kong Polytechnic University and a teaching fellow of the Department of Economics at University of Pittsburgh. Professor Li's current research interests and teaching fields focus on Health Economics, Health Services Management, Economics of Aging, Economic Growth Theory, and Public Finance.
李玲教授简介：李玲博士现任北京大学国家发展研究院中国经济研究中心教授、副主任。曾任美国Towson大学经济学院经济系副教授 (终身职) ，2003年至今担任世界银行中国医疗卫生改革专家顾问，2005年至今担任中国卫生部政策与管理专家委员，2007年起担任国务院城镇居民基本医疗保险试点评估专家组成员。2000-2003年曾担任香港理工大学部门咨询委员会非正式召集人和香港理工大学医疗管理学硕士项目负责人。李玲教授先后于1982年和1987年获武汉大学物理学学士学位、经济学硕士学位；接着求学于美国匹兹堡大学，并于1990年获得经济学硕士学位、1994年获得经济学博士学位。她曾获得美国Towson大学1995-2000共六个年度的优异表现奖，曾获美国匹兹堡大学1994年“McKay博士前教育奖学金”和该校教学优秀资格认证。李玲教授主要教学与科研领域是卫生经济学，卫生服务管理，医疗计划和评估，和商业研究方法。她曾在Towson大学和匹兹堡大学讲授管理经济学、微观经济学、老龄经济学等。
1. Career Path
Rui: Professor Li, I’m really glad to have this opportunity to talk with you. I heard that you graduated from Wuhan University, received your doctoral degree from the University of Pittsburg, and then returned to China. Would you please tell us more about yourself?
Professor Li: My career path has been very simple, just moving around from one university to another. In 1978, I was admitted to Department of Physics at Wuhan University as an undergraduate, and became a faculty member at the school after graduation. Two years later, I enrolled into the graduate program at Department of Physics, and after another two years transferred to Department of Economics. In 1987, I went abroad to study at University of Pittsburgh and received my Ph.D. degree in economics. I was a faculty member at Towson University in Mary for 10 years before I came back to China to work at the National School of Development, which was called the China Center for Economic Research then.
I grew up during the Culture Revolution and didn’t receive the typical schooling that kids go through nowadays. However, people from that time had early exposure to the everyday life and had many other experiences like learning from workers, farmers, and soldiers, visiting factories and military bases. I think the experience benefited me in terms of research design and survey. I was fortunate that I did not stay too long in the countryside like a lot of other people, and I went to college directly after graduating from high school. I was more interested in social sciences but when I entered college, it was the “golden time of science”, so I followed the general trend and chose physics. I was able to build a very solid mathematics foundation, which benefited me in my later years. I often share with my students that the oft-spoken theoretical utility optimization doesn’t necessarily lead to optimization in the real world. So when choosing a career, it is better to have a broader perspective, you will reap the benefits later. My undergraduate and graduate studies in physics built a very solid scientific foundation for me; with a firm grasp on systematic thinking and scientific methods, other topics became easy. Later when I transferred to economics, it was not difficult at all.
李玲：我的经历很简单，从一个校门到另一个校门。我78年进入武汉大学物理系读本科，毕业后留校，两年后考上物理系研究生，物理系两年后又转入经济系读研究生，87年出国，在匹兹堡大学学习，94年获得博士学位，在马里兰大学系统的 Towson州立大学（后改名为Towson大学）, 差不多工作了有10年。2003年回国，在当时的中国经济研究中心工作，也就是现在的国家发展研究院。然后一直在这里。
Rui: Majoring in physics, when and how did you grow interested in health economics?
Prof. Li: There were a lot of coincidences. When I studied in Wuhan University, our beloved Chancellor, Mr. LIU Daoyu, was a strong advocate of academic freedom. Thanks to him, we had the chance to attend seminars and presentations from a variety of disciplines, including Western social science. Having studied physics and social science, I felt that what China needed the most was social management, especially the effective allocation of resources for the entire society. So I transferred from Department of Physics to the Department of Economics. Later at University of Pittsburgh, I studied macroeconomics and grew interested in the elderly population. This population’s consumption and expenditures have significant impact on national economy. For the elderly, they have limited need for things such as food and clothing, but almost unlimited demand for healthcare. Since then I began to pay attention to health economics, and found this discipline very interesting: it touches on almost all the difficult questions in modern economics, such as asymmetrical information, risk aversion, adverse selection, moral hazard, and many others. Towson University had a large School of Public Health Management and I had the chance to teach health economics there for 10 year, starting in 1994. That same year, Bill Clinton was running for President of the United States and he was campaigning for universal healthcare coverage. At that time, few scholars focused on health economics, including those in the United States. Health economics is still an evolving field, receiving more and more attention.
李玲： 这也是很多巧合。我当时上大学的时候我们武汉大学的校长是刘道玉，他是一位非常优秀的校长，可以说是现代的蔡元培。记得他那个时候非常提倡学生的自由，那个时候武汉大学学生的风气是最自由的了，有机会听各种各样的讲座，看各种各样的书，比如西方社会科学。我们物理学是科学救国，我学了物理又学了社会科学，感到中国最缺的其实不是科学，而是社会管理，就是怎样让整个社会的资源得到最有效的配置，所以这就是我为什么就转到了经济学。我的论文是有关宏观经济的增长，学习宏观经济增长的理论的时候，发现老年人这个群体，它的消费和支出对整个经济的影响非常大。它的消费支出是由政府的养老保障，还是个人支出，这个决策对于整个宏观经济的影响很大。所以我就开始关注老年经济学，关注以后发现老年经济的最大一块就在卫生这一块。因为他们对吃和穿的需求都有限，可是他们对医疗服务的需求可以说是无限的。那个时候就开始关注卫生经济学。恰好我原来教书的学校有很大的医疗管理的学院，正好需要老师教卫生经济学，所以我就去给他们教卫生经济学。在教的过程中开始研究卫生经济学，后来越研究越觉得卫生有意思，因为卫生经济学这个学科，可以说集合了我们现代经济学所有的难点问题，比如信息不对称，比如风险规避，逆向选择，道德风险，很多很多问题，都包含在里面。卫生这个领域，很有挑战性, 很有意义。我是从94年教卫生经济学开始接触这门学科。我转过去教书的那一年正好是克林顿的总统竞选，他提出的口号是全民保险。那时候医改在美国是一个很热的话题，但当时中国还没有医改这个词。[我做这方面的研究，]一方面是学术上的兴趣，另一方面是整个大环境的态势。那个时候真正做卫生经济学的人还很少，包括在美国。英国比较早一些。美国卫生经济学开始热实际上在90年代，也就是94年左右，克林顿竞选的时候。卫生经济学还是一个正在发展的领域，很多经济学家关注的还是不够,但是这些年越来越多的人开始关注它。
Rui: When did you decide to go back to China and work for the China Center for Economic Research (currently National School of Development)?
Prof. Li: I moved back to China in 2003. At that time I had already received my tenure in Towson University and there didn’t seem to be many challenges remaining. Perhaps life in the U.S. had become too comfortable. Our generation grew up with the idealistic motto of “striving for the country and the people”. If I stayed in the United States, I could definitely see what life is like for the next 30 years, which would be dull. I wanted to make a difference, so I accepted Professor Justin (Yifu) Lin’s invitation and joined the China Center for Economic Research.
2. Involvement in China’s Health Care Reform
Rui: Can you tell us how you were involved in the debate of health care reform, the central part of your proposal, and how did you feel about your proposal when there were at least 8 competing proposals being discussed?
Prof. Li: I have always been lucky in that I am always at the right place at the right time. In 2003, I returned to Beijing when SARS outbreak happened. The impact of SARS on China was profound. Government began to realize that economic development alone was not enough for the country, because a pandemic outbreak could cause economic stagnation and even contraction. I feel that the government did some soul-searching and proposed the concept of balanced development, known as the “scientific concept of development”, as well as the “people-oriented” and “harmonious society”. Since then, health reform in China had been proposed partly to meet people’s demand for accessible and affordable healthcare. At that time, many scholars believed that privatization, i.e., selling the public hospitals, should be the future of health reform. However, even in the United States, the government had a clear role and responsibilities in providing healthcare to its people, and healthcare expenditure is a major part of U.S. federal budget. Based on my research and knowledge of international healthcare systems, I wrote a series of articles detailing how other countries have dealt with healthcare, and how the systems have been evolving, trying to help people understand why the health sector is special, and government must be involved. The articles were well received. In 2006, I participated in a training session for China’s Politburo. It was after that training that the government established its leading role in China’s health care reform, which aimed to provide basic health services as a form of public services to all citizens.
Rui: I heard that there were 9 proposals on the table.
Prof. Li: Yes, there were 9 proposals submitted by domestic and international researchers including Peking University, Tsinghua University, Renmin University, World Health Organization (WHO), the World Bank, Mckinsey & Company, and Fudan University. The final scheme was a synthesis of the 9 proposals. However, the main framework was based on our proposal.
Rui: Rural China has recently seen much improvement in healthcare. Could you please tell us how you see the current situation regarding this part of the healthcare reform? Are there any issues that need further efforts?
Prof. Li: We believed that the government should take responsibility in two aspects of healthcare reform in rural areas: providing health insurance and increasing level of coverage for the New Rural Cooperation Medical Insurance and rebuilding rural primary care system.
Rural health care system in China is the weakest spot. During the Cultural Revolution, Chairman Mao emphasized the importance of rural health care systems, resulting in an influx of good doctors into rural areas and allowed the establishment of the three-level health system: “barefoot doctor-township hospital-county hospital”, which greatly improved rural quality of healthcare. After the Cultural Revolution, the collective economy was replaced by the Household Responsibility System, and barefoot doctors, a system dependent on the old economics model, diminished as well. In addition, the “barefoot doctor” was considered as a product of the Cultural Revolution and banned by legislation in the 1980s. These changes pretty much destroyed the cooperative rural health care system. Before 2003 there was no health care protection for farmers at all, leaving rural residents in a deep poverty trap-illness begets poverty and poverty begets illness. In recent years, 18 ministries and commissions worked together to jumpstart the health care reform and presented the draft proposal in April 2009. From 2009 to 2011, the main objective was implementing reform at the grass-root level, in accordance with the slogan “Ensuring Grassroots Capacity, Strengthening Basics, and Establishing Infrastructure”. Now there has been a dramatic change in the healthcare system in rural area. Farmers started to have medical insurance, even though the covered services were still limited. Nowadays, the most beautiful building in the rural area is usually the rural township community hospital. I just finished a field trip in seven counties in Jilin. A farmer told me that “[I]t is great! Now I can afford to see a doctor.”
In rural areas, the most important task of health care reform is to rebuild the primary health care system, not just expanding insurance coverage or improving community hospital’s facilities. Currently the primary healthcare system is funded with 120 CNY from each level of government and about 30 CNY out of pocket costs from rural residents. The funding level is still low, but it did allow the re-establishment of the three-level health services network: village doctors, township-village hospitals, and county hospitals. The township-village hospitals used to survive by selling medicines. After the reform, they become public service units and their budget is fully provided by the government, just like teachers and civil servants. To maintain quality and efficiency, the personnel system has also been reformed with a more competitive human resources policy being currently used. Employees for rural health care providers must compete for positions based on their qualification and performance evaluation. The new salary and incentive system is also based on performance evaluation. Furthermore, the introduction of digital recording and evaluation system guarantees the objectivity and impartiality of the personnel system. As a result, dramatic changes have occurred in the health care system in rural areas of China. I recommend you to watch a TV series called “Sheng Si Yi Tuo (生死依托)”. It reflects very well the reality of the ongoing healthcare reform in China. Previously rural residents often became poor due to their illness. Now things have changed: their agriculture taxes exempted; free nine year education provided, and the health insurance coverage provided after the reform.
Based on my experience during the past several years participating in China’s healthcare reform, I think it’s fair to give Chinese people and Chinese system a high score. Our system has many problems, but also many advantages. First of all, the Central Government has the willingness and capability to push for reform. The government solicited proposals globally; the process was open, transparent, and responsive to public comments. In addition, comparing with the U.S. 2010 health care reform, there is no room for pilot tests once the reform proposal became legislation. In contrast, any location in China can be a field experiment, with each pilot site implementing the reform in accordance with their capacity and resources. All these experience could be quickly summarized and developed into a model, then promoted nationwide. For example, the Anhui Model had been very successful and many places adopted or are planning to adopt it. The former Vice Governor of Anhui Province was in charge of the Anhui healthcare reform and later promoted to head the Office of National Healthcare Reform. The reform in China is a combination of top-down and bottom-up approaches and it is a continuous process with a lot of flexibility and strong momentum.
我参加医改这么多年来，我觉得还是要给我们中国人，中国制度以很高的评价 。我们的制度也有很多的优越性。当然我们有很多问题，这个一点也不回避，但是在推行医改过程中也看到我们的制度有很多的优越性。一个是高层强力推，第一次医改有了顶层设计，而且是向全球开放, 全球征求方案。没有任何一个国家做国家公共政策选择像中国这样开放。我觉得这是中国在尝试一种新的民主方式。民主一方面是选人，一方面是选事。医疗卫生改革涉及每个人的利益，这次医改方案是对全民征求意见，08年10月，方案放在中国发改委的网站上，全民都可以来提意见。中国政府在这次医改是尽可能的用公开，透明的方法来做决策，而且还一直顺应民意，因为这是民众最关注的事。跟美国医改相比较，中国医改还有一个好处，你看奥巴马这次医改，它一通过就成了法律，基层是没有空间去试点的。你一试点就违法了，所以它很难执行。中国的医改呢，我们在整体的框架，大的目标定下来以后，允许在各地试点。所以说医改在中国可以说是轰轰烈烈的社会实践，每个地方都不一样。每个县，每个城市，每个省都不一样。都是按他们的理解，结合当地的条件，能力，来推进医改，非常有意思。中国医改实际上是一个全世界最大的社会实验场，它让大家试，非常公开，但是试了以后，它又能够很快的总结经验。在各地试点情况下很快就形成模式。比如现在在基层推行的医改就是安徽的模式，因为安徽做得最好，所以它的经验可以很快的得到总结，提炼，推广。原来在安徽管医改的常务副省长就调去管国家的医改了，他现在是国家医改办的主任。我觉得这种从上到下，从下到上不断的上下联动，进行有机的结合，这是我们中国体制的最大一个优势，就是它的弹性。涉及13亿人的医改的战车，这么大的摩擦力，要往前推，是需要巨大启动力的。还要推到正确的方向，平稳的前进，不得不承认中国的体制还是有很大的优势的。
3. Health Care Reform in China: Next Steps
Rui: Your healthcare reform plan, or a very close version of it, has been adopted by the Ministry of Health. What is now on your research agenda and what is your 5-year, 10-year goal in moving healthcare reform forward?
Prof. Li: We are researching and evaluating the current healthcare reform, as well as some theoretical research. During the early stage of the reform, we conducted surveys on the implementation and coordination of the New Rural Cooperative Medical System (NCMS). The next step will be to reform urban public hospitals. It is still not clear in which direction the reform should go. The healthcare reform has been successful at the grass-root level. However, only 20% of the total health care services are provided at the grass-root level. All the hospitals at the county level and above, which provide 80% of the total health care services, have remained in the old system. We did pilot studies in 17 cities in the past three years, but there was not a clear model for health reform in urban public hospitals. It has to go through system reconstruction, including its financing system, payment system, and personnel system. In addition, the reform of personnel system plays a fundamental role, and the appropriate incentive system has to be established.
The reform of public hospitals should still be government-led, rather than completely market-oriented. However, in China the private sector nowadays is very strong. There is intensive lobbying from interest groups. I think we should learn from the U.S. Veterans Affairs system, to move away from for-profit and come back to public services—to provide the best quality of care to the public with the lowest cost. To achieve this goal, we need to reconstruct the system of public hospitals; and I think the experience of three years’ primary health system reconstruction in rural areas can also serve as an example for the reform in public hospitals. The main difficulty is that the incentive system of public hospitals is much more complicated, for urban medical faculties are more professional and the classification of specialists is more complex. I think the U.S. Veterans Affairs system is the example we can learn from.
The reform in urban public hospitals will have a very long way to go, because it’s a major issue of resource rebalancing. After we complete the reform in urban public hospitals, I think the overall healthcare system reconstruction project will be completed. And the next step, as the ultimate goal of healthcare, is “health”, which has to be realized by prevention instead of medication. Information system will play a major role in promoting health for all Chinese people.
现在的公立医院改革方向应该还是以政府为主导，不是把它完全市场化。 但是现在中国资本的力量还是很强大的。现在公立医院可是最后一块没有被分掉的肥肉，各方利益的博弈很厉害。中国公立医院的改革很大程度上应该学习美国的退伍军人医疗系统， 应该建立一个信息化的服务网络，回归它的公益性，回归到用最低的成本为老百姓服务。不能象我们公立医院现在是要挣钱的，要利润最大化。怎么能保证它回到这个目标？需要进行体制的再构。三年基层医改的体系再构我觉得是可以复制到城市医改的。主要的难点在于医务人员的激励体制再构要比农村复杂得多。城市医务人员水平高，专科的分类更复杂。我觉得在这方面美国的退伍军人医疗系统很值得我们学习。
4. Professor Li’s Team and Words to CHPAMS members
Rui: Can you tell us about your group? Do you have plan for new recruitment? Are there any collaboration opportunities for other health economists and policy researchers to work with your group?
Prof. Li: We have an excellent team, including Dr. CHEN Qiulin and JIANG Yu, with whom you’re quite familiar. And most of them are my students and many of them have graduated. They are excellent in learning by doing, and they will play major roles in future healthcare reforms in both China and elsewhere. We also have two graduate students who are now studying at Harvard. One is working with Prof. William Hsiao in the School of Public Health and the other one is in the Department of Economics working with Prof. David Cutler.
If anyone would like to know more about our team and our work, please e-mail me. We love collaboration opportunities--we have a large amount of data from the three years’ reform, and would like to evaluate the effectiveness of China’s healthcare reform and get more high quality scientific papers published as well.
Rui: What advice do you have for young health economists in China and abroad? Do you have any words for members of the China Health Policy and Management Society (CHPAMS) and readers of the China Health Review?
Prof. Li: I hope you all pay more attention to what is going on in China’s healthcare reform. I pay close attention to the U.S. healthcare reform, which seems to reach an ending point for this round. In fact, reform is always a political issue rather than a technicality. On the other hand, China’s healthcare reform is ongoing; it has strong support from the leadership, it has generated grass-root know-how. Its innovative approaches are worthwhile for us to examine and study. It also provides new ideas and directions for theoretical research and academic efforts.
Thank you for organizing CHPAMS to attend to China’s healthcare reform. I hope you will keep an eye on what is happening in China, build collaboration, and collectively push China’s healthcare reform forward to benefit the Chinese people.
 The English version was translated from the original transcript in Chinese. In case any ambiguity arises, please refer to the Chinese version.
By Rui Li, PhD, BM, MM, CHPAMS member