Although most of these big hospitals are either State-owned or non-profit institutions, financial assistance from the government has been dwindling and so they rely on high-priced drugs and diagnostics to keep operating.

The Ministry of Health official said the government would use more tax revenues to directly set up hospitals providing free primary medical care for all, especially the poor, the elderly, the jobless, and the disabled.

The government will also help more people secure medical insurance coverage, he said.

According to the 2003 survey, about 45 per cent of urban and 80 per cent of rural residents had no medical insurance.

In the past several years, the government has helped 156 million farmers join a "rural co-operation medical system".

The system pools money from the central government, usually 10 (US$1.2) to 20 yuan (US$2.4) per person, and a similar amount from local governments and the farmers themselves. The money is used to treat major illnesses.

The system will cover all 800 million rural residents by 2010, according to the ministry.

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