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Welfare effects of public health insurance reform: The case of urban China

Author

Listed:
  • DING Jihong

    (School of Economics, Nankai University, Tianjin 300071, China)

  • ZHU Minglai

    (School of Economics, Nankai University, Tianjin 300071, China)

Abstract

This paper evaluates Chinese public health insurance reform enforced since 1998 in terms of its welfare effects. We evaluate China health insurance reform since 1998 using the China Health and Nutrition Surveys (CHNS) data with relevant econometric models. The results of empirical studies show that the public health insurance status has significant impact on medical service utilization and expenditure. The reform reduces the positive effect of public health insurance on medical service utilization, meaning the utilization gap is narrowed after the reform. However, the empirical studies find that the medical expenditure growth of the sample individuals in urban China has not been controlled after the Basic Medical Insurance (BMI) program even if a new co-payment is enforced. Two main reasons for this failure might be the rising cost of medical service and physician's severe moral hazard, while both of them come from no managed care mechanism for medical service providers in China.

Suggested Citation

  • DING Jihong & ZHU Minglai, 2007. "Welfare effects of public health insurance reform: The case of urban China," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 2(3), pages 289-323, September.
    • Handle: RePEc:fec:journl:v:2:y:2007:i:3:p:289-323
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    File URL: http://journal.hep.com.cn/fec/EN/10.1007/s11459-007-0016-y
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    More about this item

    Keywords

    health insurance reform; medical service expenditure; medical service utilization;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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