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Catastrophic medical payment and financial protection in rural China: evidence from the New Cooperative Medical Scheme in Shandong Province


Author Info

  • Xiaoyun Sun

    (Health Department of Shandong Province, Jinan, China)

  • Sukhan Jackson

    (School of Economics, University of Queensland, St Lucia, Brisbane, Australia)

  • Gordon Carmichael

    (National Centre for Epidemiology and Population Health, The Australian National University, Canberra, Australia)

  • Adrian C. Sleigh

    (National Centre for Epidemiology and Population Health, The Australian National University, Canberra, Australia)


Objective: To measure the impact of China's New Cooperative Medical Scheme (NCMS) on catastrophic medical payments of rural households in Linyi County, Shandong Province. Method: In 2005, from a stratified cluster sample of 3101 rural households, we identified 375 households that might be at risk of catastrophic payments by searching through NCMS claims and interviewing key informants. We interviewed these 375 households and confirmed that 231 had had catastrophic payments (≥ 40% of the households' capacity to pay; CTP) during 2004. A validity test of our screening method found another eight cases among immediate neighbours of these 375 households; by extrapolation, we obtained an adjusted total of 289 catastrophic households in the sample of 3101. We measured the impact of the NCMS on hardship alleviation by counterfactual analysis, comparing catastrophic payments before and after NCMS reimbursements. Result: The effect was twofold. Before NCMS intervention 8.98% of Linyi population had had catastrophic out-of-pocket payments compared with 8.25% after reimbursements. Catastrophic severity for households remaining in catastrophe after reimbursement dropped by 18.7% to an average of 6.34 times the household's CTP. Conclusion: Out-of-pocket medical payments remain a burden for rural households. Financial protection from the NCMS, with an average reimbursement of 17.8%, was modest and should be restructured to provide better benefits that are targeted to those in most need. Copyright © 2008 John Wiley & Sons, Ltd.

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Bibliographic Info

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

Volume (Year): 18 (2009)
Issue (Month): 1 ()
Pages: 103-119

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Handle: RePEc:wly:hlthec:v:18:y:2009:i:1:p:103-119

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  1. Liu, Yuanli & Hu, Shanlian & Fu, Wei & Hsiao, William C., 1996. "Is community financing necessary and feasible for rural China?," Health Policy, Elsevier, Elsevier, vol. 38(3), pages 155-171, December.
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Cited by:
  1. Niëns, L.M. & Brouwer, W.B.F., 2013. "Measuring the affordability of medicines: Importance and challenges," Health Policy, Elsevier, Elsevier, vol. 112(1), pages 45-52.
  2. Richard Herd, 2013. "The evolution of China’s social policies," Economic Change and Restructuring, Springer, Springer, vol. 46(1), pages 109-141, March.
  3. Martine Audibert & Xiao Xian Huang & Jacky Mathonnat & Aurore Pelissier & Ningshan Chen & Anning Ma, 2012. "Curative Activities of Township Hospitals in Weifang Prefecture, China: An Analysis of Environmental and Supply-Side Determinants," Working Papers, HAL halshs-00640742, HAL.
  4. 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., John Wiley & Sons, Ltd., vol. 18(S2), pages S7-S23, July.
  5. Liu, Hong & Zhao, Zhong, 2012. "Impact of China's Urban Resident Basic Medical Insurance on Health Care Utilization and Expenditure," IZA Discussion Papers 6768, Institute for the Study of Labor (IZA).
  6. Mebratie, A.D. & Sparrow, R.A. & Alemu, G. & Bedi, A.S., 2013. "Community-Based Health Insurance Schemes," ISS Working Papers - General Series, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague 568, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
  7. Caballes, Alvin B. & Söllner, Walter & Nañagas, Juan, 2012. "Financial protection mechanisms for inpatients at selected Philippine hospitals," Social Science & Medicine, Elsevier, Elsevier, vol. 75(10), pages 1820-1827.
  8. Xiong, Juyang & Hipgrave, David & Myklebust, Karoline & Guo, Sufang & Scherpbier, Robert W. & Tong, Xuetao & Yao, Lan & Moran, Andrew E., 2013. "Child health security in China: A survey of child health insurance coverage in diverse areas of the country," Social Science & Medicine, Elsevier, Elsevier, vol. 97(C), pages 15-19.
  9. Meiling Ying & Zaichao Du, 2012. "The effects of medical insurance on durables consumption in rural China," China Agricultural Economic Review, Emerald Group Publishing, Emerald Group Publishing, vol. 4(2), pages 176-187, May.
  10. Mohammad Hajizadeh & Hong Nghiem, 2011. "Out-of-pocket expenditures for hospital care in Iran: who is at risk of incurring catastrophic payments?," International Journal of Health Care Finance and Economics, Springer, Springer, vol. 11(4), pages 267-285, December.


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