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Sleeping money: investigating the huge surpluses of social health insurance in China

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  • JunQiang Liu

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  • Tao Chen

Abstract

The spreading of social health insurance (SHI) worldwide poses challenges for fledging public administrators. Inefficiency, misuse and even corruption threaten the stewardship of those newly established health funds. This article examines a tricky situation faced by China’s largest SHI program: the basic health insurance (BHI) scheme for urban employees. BHI accumulated a 406 billion yuan surplus by 2009, although the reimbursement level was still low. Using a provincial level panel database, we find that the huge BHI surpluses are related to the (temporarily) decreasing dependency ratio, the steady growth of average wages, the extension of BHI coverage, and progress in social insurance agency building. The financial situations of local governments and risk pooling level also matter. Besides, medical savings accounts result in about one third of BHI surpluses. Although these findings are not causal, lessons drawn from this study can help to improve the governance and performance of SHI programs in developing countries. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • JunQiang Liu & Tao Chen, 2013. "Sleeping money: investigating the huge surpluses of social health insurance in China," International Journal of Health Economics and Management, Springer, vol. 13(3), pages 319-331, December.
  • Handle: RePEc:kap:ijhcfe:v:13:y:2013:i:3:p:319-331
    DOI: 10.1007/s10754-013-9134-5
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    File URL: http://hdl.handle.net/10.1007/s10754-013-9134-5
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    References listed on IDEAS

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    1. Liu, Yuanli & Rao, Keqin & Fei, John, 1998. "Economic transition and health transition: comparing China and Russia," Health Policy, Elsevier, vol. 44(2), pages 103-122, May.
    2. Win Lin Chou & Zijun Wang, 2009. "Regional inequality in China's health care expenditures," Health Economics, John Wiley & Sons, Ltd., vol. 18(S2), pages 137-146, July.
    3. Gregory Chow, 2006. "Are Chinese Official Statistics Reliable?," CESifo Economic Studies, CESifo, vol. 52(2), pages 396-414, June.
    4. Marwa Farag & A. Nandakumar & Stanley Wallack & Dominic Hodgkin & Gary Gaumer & Can Erbil, 2013. "Health expenditures, health outcomes and the role of good governance," International Journal of Health Economics and Management, Springer, vol. 13(1), pages 33-52, March.
    5. Liu, Yuanli, 2002. "Reforming China's urban health insurance system," Health Policy, Elsevier, vol. 60(2), pages 133-150, May.
    6. Ramesh, M. & Wu, Xun, 2009. "Health policy reform in China: Lessons from Asia," Social Science & Medicine, Elsevier, vol. 68(12), pages 2256-2262, June.
    7. Nyman, John A., 1999. "The economics of moral hazard revisited," Journal of Health Economics, Elsevier, vol. 18(6), pages 811-824, December.
    8. Liu, Gordon G. & Zhao, Zhongyun & Cai, Renhua & Yamada, Tetsuji & Yamada, Tadashi, 2002. "Equity in health care access to: assessing the urban health insurance reform in China," Social Science & Medicine, Elsevier, vol. 55(10), pages 1779-1794, November.
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    Cited by:

    1. Wouters, Olivier J. & Cylus, Jonathan & Yang, Wei & Thomson, Sarah & McKee, Martin, 2016. "Medical savings accounts: assessing their impact on efficiency, equity, and financial protection in health care," LSE Research Online Documents on Economics 65448, London School of Economics and Political Science, LSE Library.
    2. repec:spr:eujhec:v:18:y:2017:i:6:d:10.1007_s10198-016-0827-9 is not listed on IDEAS

    More about this item

    Keywords

    Social health insurance; Fund balances; Health program administration; I13;

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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