DOES CHINA'S RURAL COOPERATIVE MEDICAL SYSTEM ACHIEVE ITS GOALS? EVIDENCE FROM THE CHINA HEALTH SURVEILLANCE BASELINE SURVEY IN 2001

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Abstract

The Chinese government is in the process of providing health insurance to the uninsured rural population by expanding the rural Cooperative Medical System (CMS) to every rural county. Using the China Health Surveillance Baseline Survey in 2001, we conducted a case study on two CMS pilot programs and investigated whether or not enrolling in these CMS pilot programs has led to an increase in health care utilization and a decrease in the likelihood of catastrophic health spending for rural residents. Matched data sets are produced using propensity score and the instrumental variable (IV) method is used. We have found that the CMS pilot programs have had a significant and positive effect on the probability of seeking medical care and the number of visits. However, the CMS programs did not seem to have had a significant impact on households' out-of-pocket health expenditure and on reducing catastrophic spending. The findings generated from the matched data are consistent with those obtained from the full set of data and those obtained from the IV method. (JEL I18)

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