SHANGHAI/LONDON • As medical bills in China soar, outpacing government insurance provision, patients and their families are increasingly turning to loans to pay for healthcare, adding to the country's growing burden of consumer debt.
While public health insurance reaches nearly all of China's 1.4 billion people, its coverage is basic, leaving patients liable for about half of total healthcare spending, with the proportion rising further for serious or chronic diseases such as cancer and diabetes.
That is likely to get significantly worse as the personal healthcare bill soars almost fourfold to 12.7 trillion yuan (S$2.6 trillion) by 2025, according to Boston Consulting Group estimates.
For many, like construction materials trader Li Xinjin, whose son was diagnosed with leukaemia in 2009, that means crippling debt.
Mr Li, from Hebei province, scoured local papers and websites for small lenders to finance his son's costly treatment at a specialist hospital in Beijing, running up debts of more than 1.7 million yuan, about 10 times his typical annual income. "At that time, borrowing money and having to make repayments, I was very stressed. Every day I worried about this," said Mr Li, 47, adding that he and his wife had at times slept rough on the streets near the hospital.
"But I couldn't let my son down. I had to try to save him," he said.
Mr Li's boy died last year.
The debts will weigh him down for a few more years yet.
Medical loans are just part of China's debt mountain - consumer borrowing has tripled since 2010 to nearly 21 trillion yuan, and in eight years household debt relative to the economy has doubled to nearly 40 per cent - but they are growing.
That is luring big companies like Ping An Insurance Group , as well as small loan firms and P2P platforms, as China's traditional savings culture proves inadequate to the challenge of such heavy costs.
The stress is particularly apparent in lower-tier cities and rural areas where insurance has failed to keep pace with rising costs, said Mr Andrew Chen, Shanghai-based healthcare head for consultancy Parthenon-EY.
"It's a storm waiting to happen where patients from rural areas will have huge financial burdens they didn't have to face before," he said, adding that people would often take second mortgages or turn to community finance schemes.
China's government has moved to ramp up rural health insurance, boost coverage for major illnesses and put pressure on drug companies to slash prices, but it is an uphill battle.
The Ministry of Health, which did not immediately respond to requests for comment, is investigating the impact of these costs on the country's labour force.
Official data shows up to 44 per cent of families pushed into poverty were impoverished by illness.
Some desperate patients also resorted to pawning their personal belongings. "They use things of various value from jewellery to purses to even cars," said an employee at online lender minbaodai.cn.
"Previously the majority of people were looking for extra cash flow for their business, but last year and this, we've seen a rise in healthcare loans."