IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

The cost escalation of social health insurance plans in China: Its implication for public policy

  • Liu, Xingzhu
  • Hsiao, William C. L.
Registered author(s):

    China has been alarmed by its rapid rise in health care expenditures of social health insurance schemes. The health care expenditure per person for the 155 million people covered by the Chinese social insurance plans has been rising at an accelerative rate. We analyze why health care cost in China has risen, and show how other nations may benefit from this experience. The annual rate of increase in health expenditure per capita was only 3.1% during 1952 to 1978, the average rate rose to 8.2% during 1978 to 1985 and then 24.4% during 1985 to 1989. We found general inflation explained one-half of the high rates of increase between 1985-1989. Although China introduced patients co-payments in 1985, the residual expenditure per capita (after adjusting for general inflation and aging of the beneficiaries) increased at 7.4% per year due to the adoption of new technology, uses of more expensive drugs and increased quality of services. While we found the expenditure increases in China were largely caused by uncontrollable factors such as general inflation and aging of the population, we also found the change in Chinese hospital financing and payment policy caused rapid adoption of high-tech medicine and abusive usage of more expensive drugs which largely explained the annual increases in expenditures of 7.4% between 1985-1989. Chinese experience also shows that demand strategy (co-payment by patients) had very little effect to contain cost escalation.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.sciencedirect.com/science/article/B6VBF-3YS8D57-1M/2/a7feb1d290d290f734a4dfb0db5b3c7b
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Elsevier in its journal Social Science & Medicine.

    Volume (Year): 41 (1995)
    Issue (Month): 8 (October)
    Pages: 1095-1101

    as
    in new window

    Handle: RePEc:eee:socmed:v:41:y:1995:i:8:p:1095-1101
    Contact details of provider: Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/315/description#description

    Order Information: Postal: http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
    Web: http://www.elsevier.com/orderme/journalorderform.cws_home/315/journalorderform1/orderooc/id=654&ref=654_01_ooc_1&version=01

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:eee:socmed:v:41:y:1995:i:8:p:1095-1101. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.