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

  • 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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File URL: http://hdl.handle.net/10.1002/hec.1346
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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
Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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  1. McIntyre, Diane & Thiede, Michael & Dahlgren, Göran & Whitehead, Margaret, 2006. "What are the economic consequences for households of illness and of paying for health care in low- and middle-income country contexts?," Social Science & Medicine, Elsevier, vol. 62(4), pages 858-865, February.
  2. Liu, Yuanli & Hu, Shanlian & Fu, Wei & Hsiao, William C., 1996. "Is community financing necessary and feasible for rural China?," Health Policy, Elsevier, vol. 38(3), pages 155-171, December.
  3. Carrin, Guy & Ron, Aviva & Hui, Yang & Hong, Wang & Tuohong, Zhang & Licheng, Zhang & Shuo, Zhang & Yide, Ye & Jiaying, Chen & Qicheng, Jiang & Zhaoyang, Zhang & Jun, Yu & Xuesheng, Li, 1999. "The reform of the rural cooperative medical system in the People's Republic of China: interim experience in 14 pilot counties," Social Science & Medicine, Elsevier, vol. 48(7), pages 961-972, April.
  4. Waters, Hugh R. & Anderson, Gerard F. & Mays, Jim, 2004. "Measuring financial protection in health in the United States," Health Policy, Elsevier, vol. 69(3), pages 339-349, September.
  5. Yingyi Qian, 1988. "Urban and Rural Household Saving in China," IMF Staff Papers, Palgrave Macmillan, vol. 35(4), pages 592-627, December.
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