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Adverse selection in China's New Rural Cooperative Medical Scheme

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Author Info

  • Lijian Qin
  • Suwen Pan
  • Chenggang Wang
  • Zhongyi Jiang

Abstract

Purpose – The purpose of this paper is to examine the adverse selection in participation in the New Rural Cooperative Medical Scheme (NRCMS), as well as in outpatient and inpatient service utilization, in Chaoyang, Beijing, China. Design/methodology/approach – Probit model is established to test whether the rural Hukou family member in Combined Household (CH) is statistically different from the Pure Rural Household (PRH) in enrollment in NRCMS. Seemingly Unrelated Regression (SUR) model is adopted to examine the difference in the utilization of outpatient and inpatient between the rural Hukou family members in the two kinds of households. Findings – This paper finds that the rural Hukou family member in CH has more probability to enroll in NRCMS than the counterpart in PRH. In the period of six months, the rural Hukou family member in CH exceeds PRH by 0.73 times in outpatient visit number per capita. The former average spends yuan 157 more in outpatient service and is reimbursed yuan 53 more from NRCMS than the latter. Moreover, on average, rural Hukou family member has no difference in the inpatient service utilization between the two kinds of households in the period of 12 months. Originality/value – This is the first study to empirically test the adverse selection in China's medical insurance market from the perspective of two different types of households, which are CH and PRH.

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Bibliographic Info

Article provided by Emerald Group Publishing in its journal China Agricultural Economic Review.

Volume (Year): 4 (2012)
Issue (Month): 1 (February)
Pages: 69-83

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Handle: RePEc:eme:caerpp:v:4:y:2012:i:1:p:69-83

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Related research

Keywords: Adverse selection; China; Health insurance; Health services; Medical insurance; Outpatients; Patients; Rural regions; Suburban district;

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References

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  1. Dong, Keyong, 2009. "Medical insurance system evolution in China," China Economic Review, Elsevier, vol. 20(4), pages 591-597, December.
  2. H. Holly Wang & Shaomin Huang & Linxiu Zhang & Scott Rozelle & Yuanyuan Yan, 2010. "A comparison of rural and urban healthcare consumption and health insurance," China Agricultural Economic Review, Emerald Group Publishing, vol. 2(2), pages 212-227, May.
  3. Wang, Hong & Zhang, Licheng & Yip, Winnie & Hsiao, William, 2006. "Adverse selection in a voluntary Rural Mutual Health Care health insurance scheme in China," Social Science & Medicine, Elsevier, vol. 63(5), pages 1236-1245, September.
  4. Karen Eggleston & Winnie Yip, 2004. "Hospital Competition under Regulated Prices: Application to Urban Health Sector Reforms in China," International Journal of Health Care Finance and Economics, Springer, vol. 4(4), pages 343-368, December.
  5. Yip, Winnie & Hsiao, William, 2009. "China's health care reform: A tentative assessment," China Economic Review, Elsevier, vol. 20(4), pages 613-619, December.
  6. Zhang, Licheng & Wang, Hong, 2008. "Dynamic process of adverse selection: Evidence from a subsidized community-based health insurance in rural China," Social Science & Medicine, Elsevier, vol. 67(7), pages 1173-1182, October.
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