BEIJING, Nov 1 (Reuters) - Health in parts of rural China is deteriorating despite rising incomes, and commercialised care has ratcheted up costs for those who can least afford them, the head of the World Health Organisation said on Thursday.

Hong Kong-born Margaret Chan said the cost of health care in China was outstripping income growth and that poor health was a major cause of poverty among China's hundreds of millions of rural residents.

"The payment of providers and fees charged for services has commercialised health care, compelling providers of care to focus on profit rather than the most efficient health services," she told a conference in Beijing.

"Health education and preventive services are neglected. Why? Because these activities do not guarantee income. As a result, simple conditions are often treated at very high cost."

The costs of seeing a doctor or staying in hospital are out of reach for many in the world's fourth-largest economy, and the lack of access combined with corruption has made the issue a source of social unrest.

China has pledged to provide its population with basic medical care by 2020, but Chan said the government was receiving little return in the form of better health for its investment in the sector.

"When ability to pay determines access, many rural residents will not seek care until a disease has reached an advanced stage when treatment is more complex and costly, if not impossible," she said.

"In short, the health system in rural areas has been given multiple incentives to operate with great inefficiency."

That could undermine China's efforts to expand care through its Rural Cooperative Medical Scheme, a plan under which subscribers are funded at a level of 50 yuan per person -- 20 yuan from the central government, 20 from the local government and a 10 yuan contribution from the individual.

Chinese Vice-Minister of Health Chen Xiaohong said nearly 85 percent of counties in China were participating in the plan but the funding level paled to that of wealthy coastal cities.

China was also facing new pressures in the health sector, from an ageing population and environmental risk factors, as well as the challenge of drawing doctors to practise in its rural interior.

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