Although China's current strategy to improve health care financing is heading in the right direction, much remains to be improved in terms of resource mobilization, particularly for employees from the informal sector. This paper argues that to achieve better health care, attention must be drawn to a more equitable contribution system. In addition, high out-of-pocket payments, inadequate coverage and protection, as well as the fragmentation of resource pools are issues that must be squarely faced by the government. This paper aims to provide a broad evaluation of the performance of China's health care financing and also to detail some of the challenges ahead.

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