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A DID analysis of the impact of health insurance reform in the city of Hangzhou

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  • Jiale Zhang

    (Graduate School of Economics, Osaka University, Japan)

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    Abstract

    The purpose of this study is to examine the impact of the 2003 reform of the health insurance system (in particular, the reduction in the co-payment amount) on the consumption of inpatient medical services in the city of Hangzhou using a differences-in-difference (DID) empirical strategy. The results confirm that private-sector employees (PSEs) (who were much more directly affected by the 2003 reform) were much more responsive to the reform than government employees. The growth rate of overall inpatient expenditures of PSEs (including retirees) increased by 26.4 percentage points more than that of government employees, which implies a relatively high (in absolute magnitude) price elasticity of demand for inpatient care of −1.10. Moreover, the growth rate of overall inpatient expenditures of currently employed PSEs increased by 37 percentage points more than that of government employees. Thus, the reform was effective in increasing PSEs' consumption of inpatient medical services, thereby reducing inter-occupational inequities. However, a gap still exists between government employees and PSEs in their consumption of inpatient medical services, and thus further reforms of the system (for example, further reductions in inter-occupational inequities) are needed. Copyright © 2007 John Wiley & Sons, Ltd.

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    File URL: http://hdl.handle.net/10.1002/hec.1230
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    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

    Volume (Year): 16 (2007)
    Issue (Month): 12 ()
    Pages: 1389-1402

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    Handle: RePEc:wly:hlthec:v:16:y:2007:i:12:p:1389-1402

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    Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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    1. David Meltzer & Jeanette Chung & Anirban Basu, 2002. "Does Competition under Medicare Prospective Payment Selectively Reduce Expenditures on High-Cost Patients?," RAND Journal of Economics, The RAND Corporation, vol. 33(3), pages 447-468, Autumn.
    2. Meng, Qingyue & Rehnberg, Clas & Zhuang, Ning & Bian, Ying & Tomson, Goran & Tang, Shenglan, 2004. "The impact of urban health insurance reform on hospital charges: a case study from two cities in China," Health Policy, Elsevier, vol. 68(2), pages 197-209, May.
    3. H. Naci Mocan & Erdal Tekin & Jeffrey S. Zax, 2000. "The Demand for Medical Care in Urban China," NBER Working Papers 7673, National Bureau of Economic Research, Inc.
    4. Liu, Yuanli, 2002. "Reforming China's urban health insurance system," Health Policy, Elsevier, vol. 60(2), pages 133-150, May.
    5. Edward C. Norton & Courtney Harold Van Houtven & Richard C. Lindrooth & Sharon-Lise T. Normand & Barbara Dickey, 2002. "Does prospective payment reduce inpatient length of stay?," Health Economics, John Wiley & Sons, Ltd., vol. 11(5), pages 377-387.
    6. Winnie Yip & Karen Eggleston, 2001. "Provider payment reform in China: the case of hospital reimbursement in Hainan province," Health Economics, John Wiley & Sons, Ltd., vol. 10(4), pages 325-339.
    7. Mari Kan & Wataru Suzuki, 2006. "The demand for medical care in Japan: initial findings from a Japanese natural experiment," Applied Economics Letters, Taylor & Francis Journals, vol. 13(5), pages 273-277.
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    Cited by:
    1. Jonas Schreyögg & Markus Grabka, 2010. "Copayments for ambulatory care in Germany: a natural experiment using a difference-in-difference approach," The European Journal of Health Economics, Springer, vol. 11(3), pages 331-341, June.
    2. Xilong Pan & Hassan H. Dib & Minmin Zhu & Ying Zhang & Yang Fan, 2009. "Absence of appropriate hospitalization cost control for patients with medical insurance: a comparative analysis study," Health Economics, John Wiley & Sons, Ltd., vol. 18(10), pages 1146-1162.
    3. Adam Wagstaff & Winnie Yip & Magnus Lindelow & William C. Hsiao, 2009. "China's health system and its reform: a review of recent studies," Health Economics, John Wiley & Sons, Ltd., vol. 18(S2), pages S7-S23, July.

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