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The Risks and Dynamics of Health Care Expenditures in Urban China: An Illustration in Kunshan City

Author

Listed:
  • Guan Gong

    (School of Economics, Shanghai University of Finance and Economics, Shanghai 200433, China)

  • Hongmei Wang

    (College of Public Health, University of Nebraska Medical Center, Omaha, NE 68198-4350, USA)

  • Lingli Xu

    (School of Economics, Shanghai University, Shanghai 200444, China)

Abstract

This paper examines the individual financial risk of health care expenditures over time in urban China, using longitudinal health expenditure data from 2005 to 2007 in Kunshan City, Jiangsu Province, China. We find that the stochastic process of log total health care expenditures is well represented by the sum of an AR(3) process and a white noise process. Simulating this model, we find that the urban health insurance system protects enrollees from the risk of catastrophic health care expenditures by bearing the majority of the health care expenditures. However, out-of-pocket health care expenditures represents a considerable risk to an individual¡¯s financial status.

Suggested Citation

  • Guan Gong & Hongmei Wang & Lingli Xu, 2014. "The Risks and Dynamics of Health Care Expenditures in Urban China: An Illustration in Kunshan City," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 9(4), pages 634-660, December.
    • Handle: RePEc:fec:journl:v:9:y:2014:i:4:p:634-660
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    File URL: http://journal.hep.com.cn/fec/EN/10.3868/s060-003-014-0029-7
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    Keywords

    out-of-pocket expenditures; financial risk; urban health insurance system; China;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare

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