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Consistent with the global population trend, China is becoming an aging society. Over one-fifth of the world's elderly population (aged 65 and over) lives in China. Statistics show that the elderly populace in China constitutes 8% of the total population in 2006 and the percentage will be tripled to become 24% in 2050. As a result, there is inevitably an increase in the prevalence of chronic disease that accounted for almost 80% of all deaths in China in 2005. On the other hand, from 1978 to 2003, the total expenditure on healthcare in China increased from 11.02 billion RMB up to 658.41 billion RMB, and in terms of GDP, it is an increase from 3.04%to 5.62%. The annual average increase (12.1%) in healthcare investment is therefore even higher than the annual rate of GDP increase (9.38%) during the last two decades. Meeting the long-term healthcare needs of this growing elderly population and escalating healthcare expenditure pose a grim challenge to the current Chinese healthcare system and the solvency of state budgets. In fact, the healthcare services in China have become less accessible since the early 1980s when its costs soared up. The rising costs have prevented many Chinese people from seeking early medical care. The phenomenon has created a wide disparity in seeking healthcare between urban and rural areas. These trends are of particular concern to the elderly, who have higher healthcare needs yet lesser means to afford the services. Furthermore, according to the 3rd National Health Service Survey, 79.1% of rural residents and 44.8% of urban citizens did not have any form of medical insurance. Such a low percentage of coverage of medical insurance indicates that many people may not be able to afford medical services when they suffer from severe diseases. Therefore, there is a great need of a more effective and low-cost healthcare system to alleviate the burden of the current healthcare system. A new system that can allow multi-level, multi-dimens- onal and standardized healthcare services for urban and rural citizens is proposed based on the development of miniaturized, integrated, networked, digitalized, and smart (MINDS) medical devices. Different from the traditional healthcare systems, the new one should bridge individuals and hospitals through a four-layer (PHCH) system structure: wearable intelligent sensors and devices for p-Healthcare system (PHS), home healthcare system (HHS), community healthcare system (CHS), and hospital health information system (H2IS). This four-layer structure should ensure people be monitored by the new system as closely as it can, resulting in the novel transformation of the function of healthcare systems from symptoms treatment to early risk detection and prevention. The new system is of particular importance to the cost reduction of healthcare services. It can reduce the chance of individual providers taking advantage of the provider-patient information asymmetry to prescribe unnecessary or inappropriate (but profitable) care. It also allows people to self-monitor their health conditions at their convenience in an attempt to lighten the workload of doctors and nurses. Moreover, more people can benefit from the new system with much lower medical insurance fees due to the reduced risk of developing severe diseases through regular, long-term and effective monitoring of citizens' health conditions national-wide.