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

Author

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  • 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)

Abstract

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.

Suggested Citation

  • Xiaoyun Sun & Sukhan Jackson & Gordon Carmichael & Adrian C. Sleigh, 2009. "Catastrophic medical payment and financial protection in rural China: evidence from the New Cooperative Medical Scheme in Shandong Province," Health Economics, John Wiley & Sons, Ltd., vol. 18(1), pages 103-119.
  • Handle: RePEc:wly:hlthec:v:18:y:2009:i:1:p:103-119
    DOI: 10.1002/hec.1346
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    References listed on IDEAS

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    Cited by:

    1. Caballes, Alvin B., 2015. "Institutional Financing of Catastrophic Health Expenditures," Philippine Journal of Development PJD 2013 Vol. 40 Nos. 1-2, Philippine Institute for Development Studies.
    2. Mebratie, A.D. & Sparrow, R.A. & Alemu, G. & Bedi, A.S., 2013. "Community-Based Health Insurance Schemes," ISS Working Papers - General Series 568, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    3. Zhou, Xu Dong & Li, Lu & Hesketh, Therese, 2014. "Health system reform in rural China: Voices of healthworkers and service-users," Social Science & Medicine, Elsevier, vol. 117(C), pages 134-141.
    4. repec:kap:ijhcfe:v:17:y:2017:i:3:d:10.1007_s10754-016-9203-7 is not listed on IDEAS
    5. Ebaidalla Mahjoub Ebaidalla & Mohammed Elhaj Mustafa Ali, 2017. "Determinants and Impact of Households’s Out-of-Pocket Health Care Expenditure in Sudan: Evidence From Urban and Rural Population," Working Papers 1170, Economic Research Forum, revised 12 2017.
    6. Grigorakis, Nikolaos & Floros, Christos & Tsangari, Haritini & Tsoukatos, Evangelos, 2016. "Out of pocket payments and social health insurance for private hospital care: Evidence from Greece," Health Policy, Elsevier, vol. 120(8), pages 948-959.
    7. 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.
    8. 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.
    9. Martine AUDIBERT & Jacky MATHONNAT & Aurore PELISSIER & Xiao Xian HUANG & Anning MA & Ningshan CHEN, 2011. "Curative Activities of Township Hospitals in Weifang Prefecture, China: An Analysis of Environmental and Supply-Side Determinants," Working Papers 201130, CERDI.
    10. 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, vol. 97(C), pages 15-19.
    11. 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).
    12. Cheng, Lingguo & Liu, Hong & Zhang, Ye & Zhao, Zhong, 2016. "The Health Implications of Social Pensions: Evidence from China's New Rural Pension Scheme," IZA Discussion Papers 9621, Institute for the Study of Labor (IZA).
    13. Richard Herd, 2013. "The evolution of China’s social policies," Economic Change and Restructuring, Springer, vol. 46(1), pages 109-141, March.
    14. Aurore Pelissier & Martine Audibert & Jacky Mathonnat & Xiao Xian Huang & Ningshan Chen & Anning Ma, 2012. "Curative Activities of Township Hospitals in Weifang Prefecture, China: An Analysis of Environmental and Supply-Side Determinants," Post-Print halshs-00640742, HAL.
    15. Martine AUDIBERT & Jacky MATHONNAT & Aurore PELISSIER & Xiao Xian HUANG & Anning MA & Ningshan CHEN, 2011. "Curative Activities of Township Hospitals in Weifang Prefecture, China: An Analysis of Environmental and Supply-Side Determinants," Working Papers 201130, CERDI.
    16. Meiling Ying & Zaichao Du, 2012. "The effects of medical insurance on durables consumption in rural China," China Agricultural Economic Review, Emerald Group Publishing, vol. 4(2), pages 176-187, May.
    17. Caballes, Alvin B. & Söllner, Walter & Nañagas, Juan, 2012. "Financial protection mechanisms for inpatients at selected Philippine hospitals," Social Science & Medicine, Elsevier, vol. 75(10), pages 1820-1827.
    18. Swadhin Mondal & Henry Lucas & David Peters & Barun Kanjilal, 2014. "Catastrophic out-of-pocket payment for healthcare and implications for household coping strategies: evidence from West Bengal, India," Economics Bulletin, AccessEcon, vol. 34(2), pages 1303-1316.
    19. Sun, Xiaoyun & Jackson, Sukhan & Carmichael, Gordon A. & Sleigh, Adrian C., 2009. "Prescribing behaviour of village doctors under China's New Cooperative Medical Scheme," Social Science & Medicine, Elsevier, vol. 68(10), pages 1775-1779, May.
    20. 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 Economics and Management, Springer, vol. 11(4), pages 267-285, December.
    21. Yu, Hao, 2015. "Universal health insurance coverage for 1.3 billion people: What accounts for China's success?," Health Policy, Elsevier, vol. 119(9), pages 1145-1152.
    22. Li, Cheng & Yu, Xuan & Butler, James R.G. & Yiengprugsawan, Vasoontara & Yu, Min, 2011. "Moving towards universal health insurance in China: Performance, issues and lessons from Thailand," Social Science & Medicine, Elsevier, vol. 73(3), pages 359-366, August.
    23. Liu, Kai & Wu, Qiaobing & Liu, Junqiang, 2014. "Examining the association between social health insurance participation and patients' out-of-pocket payments in China: The role of institutional arrangement," Social Science & Medicine, Elsevier, vol. 113(C), pages 95-103.
    24. Niëns, L.M. & Brouwer, W.B.F., 2013. "Measuring the affordability of medicines: Importance and challenges," Health Policy, Elsevier, vol. 112(1), pages 45-52.

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