From the Economist, medicine is not going well in rural China:

Since 2004 the government, for the first time, has been giving direct subsidies to grain farmers in an effort to keep them growing grain and to curb grain-price rises. This year the subsidies are due to rise 63%, to 42.7 billion yuan ($5.7 billion). Grain output has risen for three consecutive years, the best stint of growth since 1985. But high grain prices may have encouraged this more than the subsidies, which have been largely offset by the rising cost of fuel, fertiliser and other materials.

The changes are a temporary salve, at best. In the case of the medical-insurance scheme, the biggest beneficiaries are the richest peasants. The poorest are just as likely to choose to die at home rather than risk deeper impoverishment of their families by venturing into hospital. The measures also do next to nothing for a huge section of the rural population that has moved to the cities in recent years. These people, perhaps 150m of them, enjoy neither the recent benefits accorded to those who have stayed on the land nor the far greater subsidies enjoyed by their city-born counterparts. In 2004 the World Health Organisation (WHO) described the launch of the new medical system during such a rapid population shift as "the equivalent of launching a ship with a radically new design at the height of a typhoon'. The ship is not weathering well.

In Jiuxian, one of Luochuan's 16 townships, the hospital is one of the better looking buildings amid a hotch-potch of grey and brown Mao-era edifices (some of them "caves", built directly in the loess soil and open only at the front). It has recently been rebuilt at a cost of 4.5m yuan. A cluster of crates in the lobby containing new medical equipment has yet to be unpacked. A handwritten notice explains how the township's 14,000 citizens, most of them scattered in 34 surrounding villages, can enjoy the benefits of what is known as the "new co-operative medical system" introduced three years ago.

The system sounds a good deal. For a premium of a mere 15 yuan (about $2) a year, Jiuxian's residents can claim back a big part of their hospital costs. Before 2004 they had no insurance at all. Now, beyond a certain threshold (which varies between 100 yuan and 600 yuan according to the quality of hospital) and up to a ceiling of 10,000 yuan a year, they can reclaim between 40% and 60% (the better the hospital, the lower the percentage). The premium is waived entirely for the "impoverished", of which there are several hundred in the township. For each premium paid, the central government contributes another 10 yuan. The provincial, prefectural and county governments add a total of another 10 yuan to the kitty.

The premiums may sound small for such potentially great rewards. But for rural residents, who earned on average 3,371 yuan last year, 15 yuan amounts to nearly two days' income. In Luochuan, as in other counties where the insurance scheme has been launched, officials have reported very high rates of participation by farmers, usually over 80%. But a former senior official in Luochuan's health bureau says participation has not been as voluntary as officials make it out to be.

Yang Xiumei, who is lying on a hard bed in a small, dim ward (left untouched by upgrading) of Jiuxian's hospital, has picked the wrong time to suffer haemorrhaging and abdominal pains. In her village, says the 44-year-old Ms Yang, officials told farmers that insurance premiums would be deducted, whether they liked it or not, from subsidies they were due to be given for growing grain. But they have received neither the subsidies nor the crucial enrolment booklet for the insurance scheme. The hospital considers her uninsured, and her costs are mounting.

What if Ms Yang had received her booklet? Her insurance would not kick in until she had spent 100 yuan, the equivalent of nearly 11 days' income for the average Luochuan rural resident. Beyond that she would then be able to claim 60% of her expenses, but these could amount to several hundred more yuan even for a relatively minor complaint. The Jiuxian hospital, with its three doctors, can perform only the simplest operations and provide only basic care. Anything more serious requires a trip to the Luochuan county seat, 20km (12 miles) away. For insured Jiuxian residents who used county-level facilities, average out-of-pocket expenditure in June was 1,219 yuan, or four months' income.

Read the whole thing.