China's 3 year, CN¥850 billion (US$125 billion) reform plan, launched in 2009, marked the first phase towards achieving comprehensive universal health coverage by 2020. The government's undertaking of systemic reform and its affirmation of its role in financing health care together with priorities for prevention, primary care, and redistribution of finance and human resources to poor regions are positive developments. Accomplishing nearly universal insurance coverage in such a short time is commendable. However, transformation of money and insurance coverage into cost-effective services is difficult when delivery of health care is hindered by waste, inefficiencies, poor quality of services, and scarcity and maldistribution of the qualified workforce. China must reform its incentive structures for providers, improve governance of public hospitals, and institute a stronger regulatory system, but these changes have been slowed by opposition from stakeholders and lack of implementation capacity. The pace of reform should be moderated to allow service providers to develop absorptive capacity. Independent, outcome-based monitoring and evaluation by a third-party are essential for mid-course correction of the plans and to make officials and providers accountable. Copyright Â© 2012 Elsevier Ltd. All rights reserved.