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China's health care reform: A tentative assessment

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  • Yip, Winnie
  • Hsiao, William

Abstract

China has recently unveiled an ambitious new health-care reform plan, entailing a doubling of government health spending as well as a number of concrete reforms. While the details of the plan have not yet been completely announced, we offer a preliminary assessment of how well the reform is likely to achieve its stated goal of assuring every citizen equal access to affordable basic health care. The reform is based on three fundamental tenets: strong role of government in health, commitment to equity, and willingness to experiment with regulated market approaches. Within this framework, the reform offers a number of laudable changes to the health system, including an increase in public health financing, an expansion of primary health facilities and an increase in subsidies to achieve universal insurance coverage. However, it fails to address the root causes of the wastes and inefficiencies plaguing China's health care system, such as a fragmented delivery system and provider incentives to over-provide expensive tests and services. We conclude that China should consider changing the provider payment method from fee-for-service to a prospective payment method such as DRG or capitation with pay-for-performance, and to develop purchasing agencies that represent the interests of the population so as to enhance competition.

Suggested Citation

  • Yip, Winnie & Hsiao, William, 2009. "China's health care reform: A tentative assessment," China Economic Review, Elsevier, vol. 20(4), pages 613-619, December.
  • Handle: RePEc:eee:chieco:v:20:y:2009:i:4:p:613-619
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    References listed on IDEAS

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    6. Hsiao, William C., 2007. "The political economy of Chinese health reform," Health Economics, Policy and Law, Cambridge University Press, vol. 2(03), pages 241-249, July.
    7. Xiaoyan Lei & Wanchuan Lin, 2009. "The New Cooperative Medical Scheme in rural China: does more coverage mean more service and better health?," Health Economics, John Wiley & Sons, Ltd., vol. 18(S2), pages 25-46, July.
    8. 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.
    9. 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 7-23, July.
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    Citations

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    Cited by:

    1. Ng, Ying Chu, 2011. "The productive efficiency of Chinese hospitals," China Economic Review, Elsevier, vol. 22(3), pages 428-439, September.
    2. Wang, Jian & Iversen, Tor & Hennig-Schmidt, Heike & Godager, Geir, 2017. "How Changes in Payment Schemes Influence Provision Behavior," HERO On line Working Paper Series 2017:2, Oslo University, Health Economics Research Programme.
    3. Liu, Hong & Sun, Qi & Zhao, Zhong, 2014. "Social learning and health insurance enrollment: Evidence from China's New Cooperative Medical Scheme," Journal of Economic Behavior & Organization, Elsevier, vol. 97(C), pages 84-102.
    4. Huijie Yan, 2015. "The Integration of Energy, Environment and Health Policies in China: A Review," Working Papers halshs-01247183, HAL.
    5. Liu, Hong & Zhao, Zhong, 2014. "Does health insurance matter? Evidence from China’s urban resident basic medical insurance," Journal of Comparative Economics, Elsevier, vol. 42(4), pages 1007-1020.
    6. Pan, Jay & Liu, Gordon G. & Gao, Chen, 2013. "How does separating government regulatory and operational control of public hospitals matter to healthcare supply?," China Economic Review, Elsevier, vol. 27(C), pages 1-14.
    7. Lijian Qin & Suwen Pan & Chenggang Wang & Zhongyi Jiang, 2012. "Adverse selection in China's New Rural Cooperative Medical Scheme," China Agricultural Economic Review, Emerald Group Publishing, vol. 4(1), pages 69-83, January.
    8. Qin, Xuezheng & Pan, Jay & Liu, Gordon G., 2014. "Does participating in health insurance benefit the migrant workers in China? An empirical investigation," China Economic Review, Elsevier, vol. 30(C), pages 263-278.
    9. Chu, Xueling & Chen, Qihui & Fang, Xiangming, 2013. "Can National Health Insurance Programs Improve Health Outcomes?—Re-Examining the Case of the New Cooperative Medical Scheme in Rural China," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150488, Agricultural and Applied Economics Association.
    10. Martine AUDIBERT & Jacky MATHONNAT & Yong HE, 2010. "Income Growth, Price Variation and Health Care Demand: A Mixed Logit Model Applied to Tow-period Comparison in Rural China," Working Papers 201035, CERDI.
    11. Atella, Vincenzo & Brugiavini, Agar & Pace, Noemi, 2015. "The health care system reform in China: Effects on out-of-pocket expenses and saving," China Economic Review, Elsevier, vol. 34(C), pages 182-195.
    12. Jacky MATHONNAT & Yong HE & Martine AUDIBERT, 2013. "Two-Period Comparison of Healthcare Demand with Income Growth and Population Aging in Rural China: Implications for Adjustment of the Healthcare Supply and Development," Working Papers 201315, CERDI.
    13. repec:aoj:agafsr:2017:p:37-44 is not listed on IDEAS
    14. Carine Milcent, 2011. "Baisse du recours aux soins dans les zones rurales en Chine," PSE - Labex "OSE-Ouvrir la Science Economique" halshs-00653450, HAL.
    15. Carine Milcent, 2011. "Baisse du recours aux soins dans les zones rurales en Chine," Working Papers halshs-00653450, HAL.
    16. Sun, Jiawei & Ma, Chao & Song, Ze & Gu, Hai, 2013. "Inequality of Opportunity in Health Care in China: Suggestion on the Construction of the Urban-Rural Integrated Medical Insurance System," MPRA Paper 49389, University Library of Munich, Germany.
    17. Xiaobo Peng & Dalton Conley, 2016. "The implication of health insurance for child development and maternal nutrition: evidence from China," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(5), pages 521-534, June.
    18. repec:bla:ijhplm:v:32:y:2017:i:3:p:307-316 is not listed on IDEAS
    19. Carine Milcent & Feng Jin, 2010. "Decrease in the healthcare demand in rural China: A side effect of the industrialization process?," Working Papers halshs-00564848, HAL.
    20. repec:eee:hepoli:v:121:y:2017:i:11:p:1177-1185 is not listed on IDEAS
    21. Liu, Hong & Gao, Song & Rizzo, John A., 2011. "The expansion of public health insurance and the demand for private health insurance in rural China," China Economic Review, Elsevier, vol. 22(1), pages 28-41, March.
    22. repec:bla:glopol:v:8:y:2017:i::p:110-116 is not listed on IDEAS

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