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China's health care reform: A tentative assessment

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  • Yip, Winnie
  • Hsiao, William

Abstract

China has recently unveiled an ambitious new health-care reform plan, entailing a doubling of government health spending as well as a number of concrete reforms. While the details of the plan have not yet been completely announced, we offer a preliminary assessment of how well the reform is likely to achieve its stated goal of assuring every citizen equal access to affordable basic health care. The reform is based on three fundamental tenets: strong role of government in health, commitment to equity, and willingness to experiment with regulated market approaches. Within this framework, the reform offers a number of laudable changes to the health system, including an increase in public health financing, an expansion of primary health facilities and an increase in subsidies to achieve universal insurance coverage. However, it fails to address the root causes of the wastes and inefficiencies plaguing China's health care system, such as a fragmented delivery system and provider incentives to over-provide expensive tests and services. We conclude that China should consider changing the provider payment method from fee-for-service to a prospective payment method such as DRG or capitation with pay-for-performance, and to develop purchasing agencies that represent the interests of the population so as to enhance competition.

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Bibliographic Info

Article provided by Elsevier in its journal China Economic Review.

Volume (Year): 20 (2009)
Issue (Month): 4 (December)
Pages: 613-619

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Handle: RePEc:eee:chieco:v:20:y:2009:i:4:p:613-619

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Web page: http://www.elsevier.com/locate/chieco

Related research

Keywords: Health Care Health insurance Income distribution Asymmetric information Incentive compatibility;

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Cited by:
  1. repec:hal:wpaper:halshs-00564848 is not listed on IDEAS
  2. Liu, Hong & Sun, Qi & Zhao, Zhong, 2013. "Social Learning and Health Insurance Enrollment: Evidence from China's New Cooperative Medical Scheme," IZA Discussion Papers 7251, Institute for the Study of Labor (IZA).
  3. Ng, Ying Chu, 2011. "The productive efficiency of Chinese hospitals," China Economic Review, Elsevier, vol. 22(3), pages 428-439, September.
  4. Chu, Xueling & Chen, Qihui & Fang, Xiangming, 2013. "Can National Health Insurance Programs Improve Health Outcomes?—Re-Examining the Case of the New Cooperative Medical Scheme in Rural China," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150488, Agricultural and Applied Economics Association.
  5. Carine Milcent, 2011. "Baisse du recours aux soins dans les zones rurales en Chine," PSE - Labex "OSE-Ouvrir la Science Economique" halshs-00653450, HAL.
  6. Pan, Jay & Liu, Gordon G. & Gao, Chen, 2013. "How does separating government regulatory and operational control of public hospitals matter to healthcare supply?," China Economic Review, Elsevier, vol. 27(C), pages 1-14.
  7. Liu, Hong & Gao, Song & Rizzo, John A., 2011. "The expansion of public health insurance and the demand for private health insurance in rural China," China Economic Review, Elsevier, vol. 22(1), pages 28-41, March.
  8. Lijian Qin & Suwen Pan & Chenggang Wang & Zhongyi Jiang, 2012. "Adverse selection in China's New Rural Cooperative Medical Scheme," China Agricultural Economic Review, Emerald Group Publishing, vol. 4(1), pages 69-83, February.
  9. Jacky MATHONNAT & Yong HE & Martine AUDIBERT, 2013. "Two-Period Comparison of Healthcare Demand with Income Growth and Population Aging in Rural China: Implications for Adjustment of the Healthcare Supply and Development," Working Papers 201315, CERDI.
  10. repec:hal:psewpa:halshs-00653450 is not listed on IDEAS
  11. repec:hal:wpaper:halshs-00653450 is not listed on IDEAS
  12. Sun, Jiawei & Ma, Chao & Song, Ze & Gu, Hai, 2013. "Inequality of Opportunity in Health Care in China: Suggestion on the Construction of the Urban-Rural Integrated Medical Insurance System," MPRA Paper 49389, University Library of Munich, Germany.

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