The Chinese government is confident of injecting sufficient money into its ambitious health-care reform, a government official said on Wednesday.

The reform, which aims to provide basic medical care for China's 1.3 billion people by 2020, would cost 850 billion yuan (US$124 billion) in the first three years.

"About 331.8 billion yuan comes from the central government and the rest will be invested by local governments," Vice Minister of Finance Wang Jun told a press conference.

"I believe the investment will be made in time and in full because we have given full consideration to the financial capacity of local governments when drafting the plan," he said.

Wang said health investment had become one of the priorities of all local governments and the central government would issue incentive measures to encourage local investment.

The State Council, China's Cabinet, has set up a working team, led by Vice Premier Li Keqiang to guide the reform. The team includes senior officials from 16 state departments, including the ministries of health and finance and the National Development and Reform Commission.

The Ministry of Supervision has joined the team to oversee the allocation and spending.

With the 850-billion-yuan investment in three years, the government promised universal access to basic health insurance, introduction of an essential medicine system, improved primary health care facilities, equitable access to basic public health services and pilot reform of state-run hospitals.

Wang did not say how much would be invested in each of the five sectors, but he said a third of the investment would go to the provider of the health care services and two thirds go to the recipients.

"That means about 280 billion yuan will go to hospitals and health facilities and the rest will be used mainly to improve China's medical insurance system," Prof. Li Ling of Peking University, told Xinhua.

Three different insurance programs already exist in China for urban employees, unemployed urban residents and rural residents, into which governments, employers, and individuals contribute.

More than 200 million urban workers, 100 million urban residents and 800 million rural residents have joined the three programs respectively, according to the Development Research Center under the State Council.

According to the action plan, the health insurance subsidy offered by the government for unemployed urban residents and farmers will rise from 80 yuan per person to 120 yuan per person as of next year.

The level of reimbursement an inpatient or an outpatient can get from one of the three programs will be gradually raised.

The reformers also intend to have more vulnerable people covered by insurance, such as retirees from bankrupt or financially troubled companies who can no longer afford insurance, migrant workers and the self-employed.

In some places where pilot work was carried out, progress has been made in bringing more people under the shelter of medical insurance.

Wang also declined to specify how much money the government planned to invest annually in the next three years.

"The 850-billion-yuan investment is a calculated figure," he said. "As for the actual investment each year, it will be budgeted by local governments and should go through legal procedures.

"In the coming three years, the proportion of investment in different sectors might also be adjusted as the reform progresses," he said.

(Xinhua News Agency April 8, 2009)