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China’s New Rural Cooperative Medical Scheme

Evolution, Design and Impacts

by Dan Liu (Author)
Thesis XXI, 141 Pages

Table Of Content

  • Cover
  • Title
  • Copyright
  • About the author
  • About the book
  • This eBook can be cited
  • Table of contents
  • Foreword
  • Abstract
  • List of Table
  • List of Figure
  • Abbreviations and Acronyms
  • Acknowledgments
  • 1. Introduction
  • 1.1 Background and problem statement
  • 1.2 Research objectives
  • 1.3 Data sources
  • 1.4 Structure of the thesis
  • 2. Healthcare management
  • 2.1 Linkage between health and health care demand
  • 2.2 Determinants of health care demand
  • 2.3 Uncertainty in health care and risk-sharing strategies
  • 2.4 Health insurance and its standard features
  • 2.5 Relationship of health risk to poverty reduction
  • 2.6 Provision of health insurance to the rural population
  • 3. An overview of health care system in rural China
  • 3.1 Introduction
  • 3.2 Rural household demographic features
  • 3.3 Rural health care before the economic reform in China
  • 3.3.1 Rural health service network
  • 3.3.2 Financing mechanisms before economic reform
  • 3.4 Economic reform affecting the health care system in rural China
  • 3.4.1 Major aspects of market-oriented economic reform
  • 3.4.2 The impact of market-oriented economic reform on the rural health care system
  • 3.4.3 Health status and health care expenditure of the rural population
  • 3.4.4 Attempts at rebuilding the CMS
  • 3.5 The New Cooperative Medical Scheme (NCMS) in rural China
  • 3.5.1 Financing mechanism of the NCMS
  • 3.5.2 Coverage and operational procedure of the NCMS
  • 3.5.3 Reimbursement modes of the NCMS
  • 4. The impact of the New Cooperative Medical Scheme on access to rural health care and reducing medical expenditures
  • 4.1 Introduction
  • 4.2 Previous studies about the NCMS program
  • 4.3 Data and methodology
  • 4.3.1 Data
  • 4.3.2 Methodology
  • 4.3.2.1 Propensity score matching
  • 4.3.2.2 Bounding approach
  • 4.4 Variables defined
  • 4.4.1 Dependent variables
  • 4.4.2 Independent variables
  • 4.5 Results
  • 4.5.1 Descriptive statistics
  • 4.5.2 Propensity score estimates
  • 4.5.3 Impact estimation
  • 4.5.4 Sensitivity test results
  • 4.6 Discussion
  • 4.7 Policy implications
  • 5. Health care demand pattern and reimbursement mechanisms of the NCMS
  • 5.1 Introduction
  • 5.2 Reimbursement arrangements of the NCMS
  • 5.3 Previous studies on the reimbursement mechanism of the NCMS
  • 5.4 Methodology
  • 5.4.1 Behavioral assumptions
  • 5.4.2 Statistical analysis
  • 5.4.3 Empirical strategy
  • 5.5 Data
  • 5.6 Results
  • 5.6.1 Descriptive statistics
  • 5.6.2 Econometric estimation results
  • 5.6.2.1 Health care demand pattern
  • 5.6.2.2 Policy simulation
  • 5.7 Discussion
  • 5.8 Conclusions and policy implementations
  • 6. General conclusion and recommendations
  • 6.1 Main findings
  • 6.2 Policy recommendations
  • References
  • Appendix
  • Series index

About the author

Dan Liu is currently Research Fellow at the Mannheim Institute of Public Health, Social and Preventive Medicine, University of Heidelberg (Germany). She studied at Sichuan Agricultural University (China) and completed her PhD at the University of Bonn (Germany). Her research interest lies in the area of development economics, with a focus on health domain, including health care demand, health financing, health risk management, and the impact evaluation of policy. In recent years, she has extended her studies related to health economics, ranging from the economic evaluation of health technology to health intervention programs.

About the book

The New Cooperative Medical Scheme (NCMS) was implemented in 2003 in response to the poor state of health care in rural China. It holds the primary objective of insuring rural residents against catastrophic health expenses, protecting them from impoverishment caused by medical expenses. The objective of this study, therefore, is to explore variation in the determinants of household enrolment in this scheme and the impact of enrolment on health care utilization and medical expenditures in three large geographic regions in China and further to simulate the reimbursement package design in order to achieve better financing protection and policy effectiveness.

Foreword

Ever since the collapse of the once successful Cooperative Medical Scheme (CMS) in rural China in early 1980s, rural people have been excluded from the social security system, with many obstacles impeding the poor in trying to access health services. As a result, health shocks and poor healthcare are correlated with increases in poverty. In order to solve the problems of unaffordable access and illness-led impoverishment, the Chinese government announced a new rural health financing policy to provide health insurance for its rural populations in 2002, henceforth, the New Cooperative Medical Scheme (NCMS), financed by a matching fund with contributions from central and local governments as well as individual households.

With huge government commitment and the injection of subsidies, this scheme represents the hope for achieving a harmonious society. Meanwhile, improving health equity between urban and rural is also a key determinant of further economic growth. Scaled-up from 2003 to September 2009, there are 2,716 counties (including suburban villages, accounting for almost 95% counties in China) executing the New Cooperative Medical Scheme, with 833 million rural people enrolled. Nationwide, the enrollment rate stands at 94%. It is worth noting that for the past decades, this is the first time for Chinese government provided financial support to the purchase of health care services for rural farmers. This policy represents a historic breakthrough and a fundamental shift towards a more equity-oriented social policy.

The success or failure of such a public-private partnership model for financing rural health insurance will not only directly impact the welfare of China’s rural population, but will also refer to the achievement of building a harmonious society through the balancing of economic and society development. Therefore, its experiences are deserved to closely monitored and evaluated, with the more valuable lessons learned in the process, the more achievements that can be realized.

The analysis and evidence-based recommendations produced in this study offer a valuable contribution to policy making to improve the NCMS design, particularly in regional policy development and reimbursement arrangements. This study particularly aims at the needs of China, detailing the critical concerns for an effective implementation of the NCMS and efficiency in the utilization of public investment. This study also intends to make clear that the implementation of the NCMS will be accompanied by various endeavors including the improvements of rural infrastructure and environmental health conditions.

Abstract

Following the inception of the economic system reform in the early 1980s, China embarked on a development path through marketization. Within this process, efficiency and economic growth were promoted as the country’s top priority, and the inequalities were no longer considered as being necessarily negative. Problems rendered by this laissez-faire attitude towards health policy were further exacerbated by the rapid collapse of the rural health insurance system. Strong­­ discontent with the unaffordable access and medical impoverishment in rural China is perceived as being a leading public concern.

To address poor health care and illness-led impoverishment in rural areas, the Chinese government has committed to greatly increase its investment in supporting and strengthening the rural health care system. The most important of the initiatives is the establishment of the New Cooperative Medical Scheme (NCMS) in rural China, which holds the primary objective of insuring rural residents against catastrophic health expenses, protecting them from impoverishment caused by medical expenses.

Assessing the New Cooperative Medical Scheme effectively is a challenging task, given the vast geographical and socioeconomic conditions of the rural communities. The NCMS policy rules three central guidelines nationwide: household-unit enrollment, county-level implementation, and catastrophic health expenditure oriented reimbursement, which are developed and tailored to the special regional needs. By adopting an abundant longitudinal dataset and counterfactual analysis methods, this research investigates in-depth the determinants of health insurance demand for rural households in different regions and income hierarchy positions, underscoring the heterogeneity of policy impacts.

Summary

The New Cooperative Medical Scheme (NCMS) was implemented in 2003 in response to the poor state of health care in rural China. It holds the primary objective of insuring rural residents against catastrophic health expenses, protecting them from impoverishment caused by medical expenses. The objective of this study, therefore, is to explore variation in the determinants of household enrolment in this scheme and the impact of enrolment on health care utilization and medical expenditures in three large geographic regions in China and further to simulate the reimbursement package design in order to achieve better financing protection and policy effectiveness.

Details

Pages
XXI, 141
ISBN (PDF)
9783653038446
ISBN (ePUB)
9783653991024
ISBN (MOBI)
9783653991017
ISBN (Hardcover)
9783631648551
Language
English
Publication date
2014 (January)
Published
Frankfurt am Main, Berlin, Bern, Bruxelles, New York, Oxford, Wien, 2013. XXI, 141 pp., 6 b/w fig., 28 tables

Biographical notes

Dan Liu (Author)

Dan Liu is currently Research Fellow at the Mannheim Institute of Public Health, Social and Preventive Medicine, University of Heidelberg (Germany). She studied at Sichuan Agricultural University (China) and completed her PhD at the University of Bonn (Germany). Her research interest lies in the area of development economics, with a focus on health domain, including health care demand, health financing, health risk management, and the impact evaluation of policy. In recent years, she has extended her studies related to health economics, ranging from the economic evaluation of health technology to health intervention programs.

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Title: China’s New Rural Cooperative Medical Scheme