Any marketised and fragmented insurance approach will necessarily be less efficient at delivering good health outcomes than a comparatively centrally planned one.

The reason was going to far looking to the US in the 1980s. The original CPC healthcare model was very different.

There have been some gradual improvements however

In 2017, the comprehensive reform pilot of urban public hospitals was fully carried out, with 93.9 percent of urban public hospitals canceling drug markup, effectively controlling the unreasonable growth of medical expenses in public hospitals. In May 2018, the National Healthcare Security Administration was formally established as an institution directly under The State Council. China’s medical security undertakings entered the stage of development in a more standardized way, with comprehensive reform of public hospitals, canceled drug markups, official drug purchase with volume, DRGS and other new policies