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Keywords:

  • health insurance;
  • catastrophic health expenditure;
  • equity;
  • China
  • assurance maladie;
  • dépenses catastrophiques de santé;
  • actions;
  • Chine
  • Seguro sanitario;
  • Gasto sanitario catastrófico;
  • equidad;
  • China

Summary

  1. Top of page
  2. Summary
  3. Introduction
  4. Methods
  5. Results
  6. Discussion
  7. Conclusions and recommendations
  8. Acknowledgements
  9. References

Objectives  China has implemented the New Cooperative Medical Scheme (NCMS) in rural areas since 2003 to provide financial protection to its rural population. This article explores the effect of NCMS on relieving catastrophic health expenditure (CHE) among the poor and non-poor groups.

Methods  A questionnaire survey was conducted in three counties, with a random sample of 358 poor and 523 non-poor NCMS enrollees who used inpatient services and obtained NCMS reimbursement in 2005.

Results  Majority of NCMS enrollees suffered CHE because of using inpatient services; the occurrence and intensity of CHE was greater among poor inpatients. NCMS reimbursement helped relieve CHE to a certain degree. Poor inpatients benefited more from NCMS than non-poor, but the effects varied among counties. Cost control measures and other medical financial assistance (MFA) helped reduce inpatients’ economic burden.

Conclusions  The objective of NCMS is only partly achieved. However, NCMS has promoted equity in health financing as poor inpatients can acquire more protection than the non-poor. Our analysis suggests that efforts should be made to improve NCMS design, strengthen cost containment and extend other MFA to further relieve economic burden of disease.

Comment le nouveau schéma de coopérative médicale peut-il réduire effectivement les dépenses catastrophiques de santé pour les pauvres et non pauvres dans la Chine rurale?

Objectifs:  La Chine a adopté le Nouveau Schéma de Coopérative Médicale (NSCM) dans les zones rurales depuis 2003 afin de fournir une protection financière à sa population rurale. Cet article explore l’effet du NSCM sur le soulagement des dépenses catastrophiques de santé (DCS) dans les groupes pauvres ou non pauvres.

Méthodes:  Une surveillance par questionnaire a été menée dans trois comtés, avec un échantillon aléatoire de 358 pauvres et 523 non-pauvres inscrits dans le NSCM qui ont utilisé les services d’hospitalisation et obtenu le remboursement du NSCM en 2005.

Résultats:  La majorité des personnes inscrites au NSCM ont subi des DCS dues à l’utilisation des services d’hospitalisation, la fréquence et l’intensité de DCS ont été plus importantes chez les patients hospitalisés pauvres. Le remboursement par le NSCM a aidéà soulager la DCS à un certain degré. Les patients hospitalisés pauvres ont plus bénéficié de NSCM que les non-pauvres, mais les effets variaient selon les comtés. Des mesures de contrôle des coûts et autre assistance financière médicale ont contribuéà réduire la charge économique des patients hospitalisés.

Conclusions:  L’objectif du NSCM n’est que partiellement atteint. Toutefois, le NSCM a favorisé l’équité dans le financement de la santé car les patients hospitalisés pauvres peuvent acquérir une plus grande protection que les non-pauvres. Notre analyse suggère que des efforts devraient être faits pour améliorer la conception du NSCM, renforcer la maîtrise des coûts et étendre d’autres assistances financières médicales pour soulager d’avantage la charge économique des maladies.

Como puede el nuevo régimen de cooperativa médica reducir efectivamente los gastos catastróficos en salud entre los pobres y no-pobres de la China rural?

Objetivos:  China ha implementado el nuevo régimen de cooperativa médica (NRCM) en áreas rurales desde 2003 para proveer protección financiera a su población rural. Este artículo explora el efecto del NRCM en el alivio de gastos catastróficos en salud (GCS) entre los grupos de pobres y no-pobres.

Métodos:  Se realizó una encuesta, mediante cuestionario, en tres condados, con una muestra aleatoria de 358 pobres y 523 no-pobres participantes del NRCM que tuvieron ingreso hospitario y obtuvieron reembolso durante el 2005.

Resultados:  La mayoría de participantes del NRCM sufrieron GCS durante su ingreso hospitalario; el acontecimiento e intensidad GCS fue mayor entre los pacientes pobres. El reembolso del NRCM ayudó a aliviar los GSC hasta un cierto punto. Los pacientes pobres se beneficiaron más del NRCM que los no-pobres, pero los efectos variaron entre condados. Las medidas de controles del coste y otras ayudas financieras para gastos médicos ayudaron a reducir la carga económica de los pacientes ingresados.

Conclusiones:  El objetivo del NRCM solo se ha alcanzado parcialmente. Sin embargo NRCM ha promovido la equidad en la financiación de la salud, puesto que los pacientes pobres pueden adquirir una mayor protección que los no-pobres. Nuestro análisis sugiere que los esfuerzos deberían encauzarse para mejorar el diseño del NCMS, fortalecer la contención de costes, y extender otro tipo de asistencia financiera para aliviar la carga económica de la enfermedad.


Introduction

  1. Top of page
  2. Summary
  3. Introduction
  4. Methods
  5. Results
  6. Discussion
  7. Conclusions and recommendations
  8. Acknowledgements
  9. References

In recent years, health expenditure has escalated worldwide (Okunade & Suraratdecha 2000; WHO 2008). Meanwhile, many developing countries are still heavily relying on user charges to fund healthcare services (Newbrander et al. 2001). As a result, high costs of health services place a heavy burden on patients. According to China’s National Health Surveys in 1998 and 2003, rural residents’ health expenditure grew at an annual rate of 11.48%, four times faster than their net income over the same period. High healthcare expenses in the absence of financial protection have impoverished many rural households. Out-of-pocket (OOP) health payment is taken to be catastrophic when a household must reduce its basic expenditure over a period of time to cope with health costs (Xu et al. 2003). These households often have to borrow money, mortgage or sell assets to pay for healthcare expenses, or just forgo treatment (Devadasan et al. 2007; Wang et al. 2005).

Health insurance has been seen as an effective way to contain healthcare costs and reduce economic burdens of illness (Jakab & Krishnan 2001; Mills & Bennett 2002; Ahmed et al. 2005). China had developed a successful community-based health insurance system called the Cooperative Medical Scheme (CMS) in the rural areas since the 1950s. Unfortunately, CMS collapsed during the transition towards a market-oriented economy at the end of the 1970s (Bloom & Tang 1999). The Chinese government re-established the health insurance system – called the New Cooperative Medical Scheme (NCMS) – for rural residents in 2003. NCMS is a type of health insurance advocated, organized and sponsored by government, with rural residents’ voluntary enrolment. One of its prime objectives is to effectively reduce rural people’s economic burden of seeking health services and to relieve impoverishment through protection against catastrophic health expenditure (CHE). To achieve this objective, the NCMS policy mainly focused on impatient services.

International experiences have shown that health insurance can provide protection against CHE, although in some countries the effect is partial or limited (Devadasan et al. 2007; Limwattananon et al. 2007; Kawabata et al. 2002). However, with the exception of several studies published in Chinese (Cui et al. 2006; Sun et al. 2007), there is very limited empirical evidence on the equity of NCMS in preventing CHE. This article aims to fill this knowledge gap by exploring the impact of NCMS on CHE in poor and non-poor households.

Methods

  1. Top of page
  2. Summary
  3. Introduction
  4. Methods
  5. Results
  6. Discussion
  7. Conclusions and recommendations
  8. Acknowledgements
  9. References

Study sites selection and sampling methods

Three counties that implemented NCMS were selected including Yuexi County in Anhui province, central China; Qianjiang County in Chongqing municipality, southwest China; and Datong County in Qinghai province, northwest China. All three counties were poor counties verified by the central government.

To estimate and compare the economic burden of disease between poor and non-poor NCMS enrollees, the target population in this study was NCMS enrollees who used inpatient services and got reimbursement from NCMS in 2005. Thus, people who did not join NCMS or who did not use inpatient services were not covered. In Yuexi and Qianjiang, three townships were randomly selected from each county. Considering the sparse population in Qinghai province, five townships were randomly selected in Datong County. In each township, the NCMS reimbursement database kept in the township health centre was used for sampling. First, all the eligible population was extracted from the database and divided into two lists of poor and non-poor. The poor residents were authorized by the local civil affairs department if the household’s annual income per person was lower than the minimum living standard to cover their necessary expenses on food, clothing, water and electricity (State Council 2007). Then, from each list, a random sample of 50 enrollees was selected using systematic sampling in each township. Ten percent were added to the sample in case there were non-responses. As the total number of poor patients in Qianjiang and Datong was less than 150, all eligible poor patients were selected. In total, 358 poor inpatients and 523 non-poor inpatients were interviewed.

Data collection

A questionnaire survey was conducted in October 2006 by health workers from township health centres. The questionnaire included questions on demographic and socio-economic status (such as age, gender, household income and expenditure), inpatient services expenditure in the previous year (including direct medical expenses such as inpatient expenditure, self-purchased drug expenditure and direct non-medical expenses such as transportation and cost occurred by accompanying family members), and reimbursement from NCMS and other sources.

Data analysis

There are various definitions of CHE, ranging from a total health expenditure of more than 10% of total household income (Pradhan & Prescott 2002; Ranson 2002; Wagstaff & Van Doorslaer 2003; Van Doorslaer et al. 2006), to a total health expenditure exceeding 40% of ‘capacity to pay’ (Xu et al. 2003; Filmer et al. 2002). In this research, we used the total household expenditure as the denominator to calculate CHE. The most commonly used threshold of 10% was applied to define CHE, with the rationale that if a household spends 10% of its annual household expenditure, it may be forced to sacrifice other basic needs, sell productive assets or incur debt (Van Doorslaer et al. 2006).

In this study, OOP payment for inpatient services was used to calculate CHE including direct medical expenditure and non-medical expenditure. The non-medical expenditure was simply not covered by NCMS benefit package. Because patients need to pay the full expenses OOP before reimbursement, three scenarios were considered: (i) before reimbursement; (ii) after reimbursement from NCMS; and (iii) after reimbursement from NCMS and other sources.

To measure the incidence and intensity of CHE, two indicators proposed by The World Bank (O’Donnell et al. 2007) were employed in this research. Head count (H) represents the incidence of CHE. In a household, if the health expenditure is T and total expenditure is x, then T/x represents the share health expenditure accounts for. Define an indicator, E, which equals 1 if Ti/xi > 10% and zero otherwise. Then an estimate of the head count is given by

  • image

where N is the sample size.

To reflect the intensity of CHE, another indicator, overshoot (O) was used to capture the average degree by which payments exceed the 10% threshold. Define the household overshoot as Oi = Ei((Ti/xi − 10%)). Then the overshoot is simply the average:

  • image

The data were double entered using Epi Data 3.0. spss 11.5 were employed for data analysis. Where statistical comparisons were made, the significance level was set at 0.05.

Results

  1. Top of page
  2. Summary
  3. Introduction
  4. Methods
  5. Results
  6. Discussion
  7. Conclusions and recommendations
  8. Acknowledgements
  9. References

Study counties

Yuexi was the poorest of the three poor counties (Table 1). Yuexi and Qianjiang initiated NCMS in 2003, Datong in 2005. Coverage in Yuexi and Datong was >90%, in Qianjiang it was 56%. Premiums in 2005 in these three counties were 30 Chinese yuan (CNY) per capita; 10 CNY from individual enrollees and 20 CNY from central and local government. NCMS reimbursement policies were different in the three counties as shown in Table 2. Yuexi and Datong employed a so-called ‘medical savings account’ in NCMS fund. The 10 Yuan individual premium were put into the medical savings account for reimbursing outpatient expenditure, while the 20 Yuan subsidy from government were put in a risk pool for inpatient expenditure. However, Qianjiang County instead adopted a unified fund for both outpatient and inpatient reimbursement. The deductible rate in Yuexi and Datong was 100–500 CNY in hospitals at different levels, while no deductible was applied in Qianjiang. The reimbursement rate in the three counties was between 30% and 50% according to the level of health facilities and medical expenses. Ceilings varied between 800 and 30000 CNY in different level hospitals.

Table 1.   Socio-economic status in three counties in China 2005
 YuexiQianjiangDatong
  1. Data source: NCMS management data.

Number and percentage of townships implementing New Cooperative Medical Scheme (NCMS)24 (100%)30 (100%)22 (100%)
Number of NCMS enrollees (1000 persons)320.1240.9298.4
NCMS coverage rate (%)90.156.194.8
GDP per capita (CNY)185736545433
Annual net income per capita (CNY)183921292165
Table 2.   New Cooperative Medical Scheme (NCMS) policies in three counties in China 2005
CountyHospital levelDeductible (CNY)Reimbursement rate (%)Ceiling (CNY)
  1. Data source: NCMS policy document.

YuexiTownship200503000
County level3004010 000
Above county level5004030 000
QianjiangTownship050800
County level0408000
Above county level0308000
DatongTownship1004015 000
County level3003515 000
Above county level5003015 000

Qianjiang has implemented series of cost containment measures in NCMS. In terms of provider payment, the health bureau piloted case-based payment for 31 diseases and set payment ceilings for inpatient services for 547 diseases. To enable equitable access to medicine, an essential drug list was applied in all public health facilities. All drugs on this list should be purchased in a process known as ‘centralized purchasing’. In this process, the county health bureau invited public bidding and then used its bargaining power to purchase drugs at relatively low prices for all public health facilities within the county.

Besides NCMS, subsidies from other sources also helped to reduce poor people’s economic burden. The Civil Affair Bureau provided medical financial assistance (MFA) to people in absolute poverty, defined as those whose annual individual income is less than the national poverty line (683 CNY in 2005, equal to 99.85 US dollars). The MFA scheme will pay the premium for the absolutely poor population to ensure their enrolment in NCMS and provide further financial assistance after they obtain NCMS reimbursement.

Sample description

Table 3 presents the socio-economic features of the study sample. Poor inpatients in Qianjiang and Datong were older than the non-poor. All poor inpatients in Datong were ‘absolutely poor ‘ and thus qualified for MFA support. In all three counties, annual household income in poor families was significantly less than the non-poor (P < 0.01). However, the difference in annual household expenditure between the two groups was only significant in Qianjiang County (P < 0.01). In other words, the revenue in poor households was less but their expenditure was almost the same as non-poor households. In all counties, the percentage of households who have debt because of illness was higher in the poor (P < 0.01), with 76% as an average.

Table 3.   Socio-economic features of sampled population, China 2005
 YuexiQianjiangDatongThree counties
PoorNon-poorPoorNon-poorPoorNon-poorPoorNon-poor
  1. Data source: questionnaire survey.

  2. *The average annual household income in poor households includes all kinds of living subsidies.

Sample size14314889201126174358523
Average age40.640.854.440.945.436.945.739.6
Percentage of male inpatients (%)60.148.369.342.159.250.062.146.5
Proportion of absolutely poor inpatients (%)19.668.5100.059.8
Average annual household income* (CNY)10015.815965.35926.416775.95298.610759.37052.214556.6
Average annual household expenditure (CNY)17263.920900.76512.716110.29639.310598.311905.415641.3
Percentage of households who have debt because of illness (%)67.048.375.939.579.173.476.459.9

Medical expenditure and reimbursement for hospitalization

Medical expenditure for inpatient services was about 1500 CNY in Qianjiang, only 1/3 of that in Yuexi and 1/4 of that in Datong (Table 4). There was no significant difference in medical expenditure between the poor and non-poor in Yuexi and Qianjiang. However, in Datong, poor patients paid more for inpatient services than the non-poor (P < 0.01). Non-medical expenditure accounted for 14–24% of the total expenditure for inpatient services. No significant difference in non-medical expenditure was identified between the poor and non-poor. The share of total expenditure for inpatient services to annual household expenditure among poor patients was significantly higher than the non-poor (P < 0.01). The average reimbursement from NCMS was 978 CNY for the poor patients and 625 CNY for the non-poor, accounting for 26% and 25% of their total hospitalization expenditure, respectively. The effective reimbursement rate among poor patients was 57.2% in Qianjiang County, higher than the non-poor (44.3%, P < 0.01). In Yuexi and Datong, reimbursement rates were <26% and the differences between poor and non-poor were not significant.

Table 4.   Annual expenditure and reimbursement for inpatient services in three counties, China 2005 (unit: CNY)
 YuexiQianjiangDatongThree counties
PoorNon-poorPoorNon-poorPoorNon-poorPoorNon-poor
  1. Data source: questionnaire survey.

Direct medical expenses A6114.24119.91559.01400.95719.93497.44829.72871.1
Transportation and caring fee for hospitalization B1039.51198.4190.4301.3941.7575.4785.6643.1
Self-purchased drug expenses C207.6159.350.326.310.765.399.276.9
Total expenses for hospitalization D7533.05574.101799.71731.86737.24080.05757.13601.4
Proportion of direct non-medical expenditure to total hospitalization (B + C)/D22.3%24.1%14.9%18.4%18.1%17.5%18.8%19.6%
Proportion of total hospitalization expenditure to annual household expenditure44.1%27.7%25.3%14.6%57.8%37.5%44.1%26.1%
Reimbursement from New Cooperative Medical Scheme E1168.8800.7379.0429.11211.6718.4978.2625.0
Effective reimbursement rate ofDirect medical expenses E/A20.3%19.4%57.2%44.3%25.5%24.4%31.8%31.0%
Total hospitalization expenses E/D15.6%14.6%48.1%35.8%20.3%20.2%26.1%24.9%
Subsidies related to healthcare from other sources122.0072.101441.20573.90

In addition, people in absolute poverty also received MFA subsidies. In Datong, poor patients obtained 1441 CNY subsidies related to healthcare in 2005 from MFA. This was much more than that in the other two counties (P < 0.01).

CHE

The head count reflects the frequency of CHE occurrence. Table 5 shows that in all counties, more than 60% of poor inpatients enrolled in NCMS had CHE because of inpatient services in 2005, with the highest at 99.2% in Datong County. Among non-poor inpatients, this percentage was relatively low, although it was still more than 78% in Yuexi and Datong. In the second scenario, after NCMS reimbursement, the head count fell greatly in Qianjiang among both poor and non-poor patients (29.2% and 11.2%, respectively), while in Yuexi and Datong, the decrease was marginal. In the third scenario, after poor inpatients obtained reimbursement from both NCMS and MFA, there was a further reduction of head count in Datong (4.2%) and Qianjiang (2.3%). However, the MFA in Yuexi had hardly any effect on lowering head count.

Table 5.   Head count* of catastrophic health expenditure (CHE) in three counties, China 2005
 Yuexi (%)Qianjiang (%)Datong (%)Average (%)
  1. *Head Count refers to the frequency that CHE accounted for more than 10% of their annual household expenditures.

Poor
 Before reimbursement (P1)89.262.599.285.8
 After reimbursement from New Cooperative Medical Scheme (NCMS) (P2)85.633.395.075.1
 After reimbursement from NCMS and other sources (P3)85.631.090.872.9
Non-poor
 Before reimbursement (N1)78.439.183.865.3
 After reimbursement from NCMS (N2)73.927.980.258.3
Differences
 P1 − P23.629.24.210.8
 P2 − P30.02.34.22.2
 N1 − N24.511.23.67.0

In addition, intensity of CHE is measured by overshoot, the average extent to which the CHE is above the 10% threshold (Table 6). Before reimbursement, the overshoot was highest in Datong (47.8% and 28.0% for the poor and non-poor, respectively) and lowest in Qianjiang (17% and 8.3%). Table 6 also shows that the overshoot among poor inpatients was much higher than the non-poor in all three counties. After NCMS reimbursement, overshoot reduced 8-11% among poor inpatients and 3–7% among non-poor inpatients. Moreover, in Datong County, reimbursement from MFA was as high as 12.8% of total expenditure. The figure was much lower in Yuexi and Qianjiang (<1%).

Table 6.   Overshoot* of catastrophic health expenditure (CHE) in three counties, China 2005
  1. *Overshoot refers to the average extent to which the CHE is above the 10% threshold.

 Yuexi (%)Qianjiang (%)Datong (%)Average (%)
Poor
 Before reimbursement (A)34.817.047.834.8
 After reimbursement from New Cooperative Medical Scheme (NCMS) (B)26.78.036.825.4
 After reimbursement from NCMS and other sources (C)25.87.324.020.2
Non-poor
 Before reimbursement (A′)18.48.328.017.9
 After reimbursement from NCMS (B′)14.85.420.913.4
Differences
 A − B8.28.911.19.4
 B − C0.80.712.85.2
 A′ − B′3.72.97.14.5

Discussion

  1. Top of page
  2. Summary
  3. Introduction
  4. Methods
  5. Results
  6. Discussion
  7. Conclusions and recommendations
  8. Acknowledgements
  9. References

Because the emphasis of this article is to compare CHE between poor and non-poor NCMS enrollees, the target population was those NCMS enrollees who used inpatient services and obtained reimbursement in the year preceding the investigation. Those who were not covered by NCMS or who were too poor to afford the inpatient services were not included in this study. Even if poor people do use the inpatient services, they may try to minimize their cost by leaving hospital early or opting for less costly drugs when possible. This may underestimate the real economic burden on patients’ households. Furthermore, because NCMS only cover direct medical related costs, the study only counted direct cost for inpatient service in calculating CHE, and did not include any indirect costs in the analysis, nor did it include costs for other health services. In China, indirect costs (loss of production) can account for a high proportion of total health expenditure (Hu et al. 2007). Despite these limitations, we feel confident that the findings of this study shed light on NCMS’s role in providing financial protection to the poor.

The effect of NCMS

The aim of NCMS is to relieve enrollees’ economic burden and protect against CHE. From the study results, NCMS has partly achieved this objective in reducing CHE. Viewing from the two aspects of occurrence and intensity, the decline of CHE after NCMS reimbursement among the poor was more than that among the non-poor, especially in Qianjiang County. However, because of the low benefit level and low reimbursement rate, patients, both poor and non-poor, still faced a very high financial burden even after NCMS reimbursement. The ‘height of coverage’ in NCMS, defined as the portion of health-care costs covered through pooling and pre-payment mechanisms (WHO 2008), is very limited to achieve the goal of universal coverage. Previous researchers also found that NCMS did not reduce OOP and financial burden for enrollees compared to non-enrollees (Wagstaff et al. 2009; Yip & Hsiao 2009). Limited financial protection was also reported in other health insurances systems such as in India (Devadasan et al. 2007). However, the rural residents in China bear a higher financial burden of healthcare than countries with similar or higher GDP per capita (Hu et al. 2008). For example, compared with CHE indicators in some health insurance schemes in Vietnam (H = 15.1%, O = 1.39%) and India (H = 3.5–23%, O = 9%) (Devadasan et al. 2007; O’Donnell et al. 2007), the occurrence and intensity of CHE in China was still much higher after NCMS reimbursement.

Because of the policy design, the low effective reimbursement rate in NCMS greatly contributed to its limited effect on relieving CHE (Zhang et al. 2009). The NCMS benefit package excluded some new and expensive drugs and examinations. But in the fee-for-service payment system, doctors still have strong incentives to prescribe these expensive drugs and examinations (Hu et al. 2008). Thus, the expenditure within the benefit package amounted to much less than actual expenditure. Moreover, even where healthcare expenditure was eligible for reimbursement, policies mandating deductibles, co-payments and ceilings further reduced the proportion of effective reimbursement. As a result, this study shows that enrolees had to pay more than half of their expenditure on inpatient care OOP, with co-payment rates ranging from 50% to 65%.

Health cost containment on the supply side

High costs of health services cause CHE and undermine the effect of any health insurance system in financial protection (Devadasan et al. 2007). The high cost of healthcare in China can be attributed to insufficient financial input by government and the fee-for-service payment mechanism (Yip & Hsiao 2008; Hu et al. 2008; Blumenthal & Hsiao 2005; Ramesh 2008). By the end of the 1970s, the government had taken full responsibility for financing public hospitals to provide health services. However, in last three decades, subsidies from government have been dramatically reducing to less than one third of public hospitals’ revenue. Public hospitals have to heavily rely on user charges for cost recovery (Ramesh 2008). Fee-for-service is the most common provider payment mechanism in China, which encourages health workers to provide unnecessary health services (Yip & Hsiao 2008; Ramesh 2008). This supplier-induced demand, among other factors, has greatly contributed to the escalation of health expenditure (Hu et al. 2008).

From international experiences, cost containment measures on the supply side, such as use of generic drugs and ceilings on cost of hospitalization, are essential and effective in controlling and reducing excessive healthcare costs (Mays et al. 2004; Musau 1999). However, control measures on the demand side would be much easier to implement than those on the supply side. The current NCMS policy has concentrated more on controlling health cost from the demand side (through deductibles, co-payments and ceilings), but less on the supply side. The pilot of case-based payment in Qianjiang is an exception. NCMS in Qianjiang employed case-based payment for 31 diseases and a ceiling payment for 547 diseases for hospitalization, which aimed to motivate healthcare providers to control healthcare cost. The centralized drug purchase process also aimed to reduce the prices of basic drugs, and thus constrain the high costs of health services because of irrational drug prices. The study results suggest that these supply side cost control measures were effective, because the hospitalization expenditure and consequently the economic burden in Qianjiang County was significantly less than the other two counties.

MFA

Our results indicated that inpatients in Datong obtained more reimbursement than other two counties from MFA. This further relieved patients’ financial burden after NCMS reimbursement. This is possibly because more patients in Datong were in absolute poverty who were eligible for both types of financial protection (NCMS and MFA). This study found that the combination of supplementary financial assistance contributed towards alleviating the frequency and extent of CHE among the absolutely poor in Datong. Such supplementary assistance remains necessary to protect the absolutely poor from further impoverishment because of healthcare costs. However, we need to keep in mind that some poor people may not use the inpatient service because of the high medical expenditure. Combination of NCMS and MFA may help address this problem.

Conclusions and recommendations

  1. Top of page
  2. Summary
  3. Introduction
  4. Methods
  5. Results
  6. Discussion
  7. Conclusions and recommendations
  8. Acknowledgements
  9. References

CHE is a major cause of impoverishment in rural China. The NCMS aims to protect its members against CHE, but this objective is only partly achieved because of high medical costs and low effective reimbursement levels. NCMS has promoted equity in health financing as poor inpatients can acquire more protection than non-poor from NCMS. However, both the headcount and overshoot of CHE remain relatively high for the poor and non-poor.

To further enhance the financial protection and reduce CHE, the most important thing is to reconsider NCMS benefit package and policy design to improve the ‘height’ of NCMS coverage. In addition, cost containment measures need to be strengthened. These should include, but not be limited to, supply side measures. A key step is to gradually change the current fee-for-service payment system. Other medial financial assistance programmes may also need to be extended, especially for poor and vulnerable group, to supplement the NCMS and help further relieve economic burden of disease in rural China.

Acknowledgements

  1. Top of page
  2. Summary
  3. Introduction
  4. Methods
  5. Results
  6. Discussion
  7. Conclusions and recommendations
  8. Acknowledgements
  9. References

We would like to thank all the respondents for their participation. We are grateful to the Ministry of Health for coordination and the Health Bureau in three counties for cooperation. We are also grateful for Min Hu and Zhefang Hong’s assistance in data collection and statistical analysis. We thank Dr Ke Xu for her valuable comments on the draft.

References

  1. Top of page
  2. Summary
  3. Introduction
  4. Methods
  5. Results
  6. Discussion
  7. Conclusions and recommendations
  8. Acknowledgements
  9. References
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