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Health insurance and catastrophic illness: a report on the New Cooperative Medical System in rural China

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  • Hongmei Yi
  • Linxiu Zhang
  • Kim Singer
  • Scott Rozelle
  • Scott Atlas

Abstract

The overall goal of the paper is to understand the progress of the design and implementation of China's New Cooperative Medical System (NCMS) program between 2004 (the second year of the program) and 2007. In the paper we seek to assess some of the strengths and weaknesses of the program using a panel of national-representative, household survey data that were collected in 2005 and early 2008. According to our data, we confirm the recent reports by the Ministry of Health that there have been substantial improvements to the NCMS program in terms of coverage and participation. We also show that rural individuals also perceive an improvement in service by 2007. While the progress of the NCMS program is clear, there are still weaknesses. Most importantly, the program clearly does not meet one of its key goals of providing insurance against catastrophic illnesses. On average, individuals that required inpatient treatment in 2007 were reimbursed for 15% of their expenditures. Although this is higher than in 2004, on average, as the severity of the illness (in terms of expenditures on health care) rose, the real reimbursement rate (reimbursement amount/total expenditure on medical care) fell. The real reimbursement rate for illnesses that required expenditures between 4000 and 10 000 yuan (over 10 000 yuan) was only 11% (8%). Our analysis shows that one of the limiting factors is constrained funding. Copyright (C) 2009 John Wiley & Sons, Ltd.

Suggested Citation

  • Hongmei Yi & Linxiu Zhang & Kim Singer & Scott Rozelle & Scott Atlas, 2009. "Health insurance and catastrophic illness: a report on the New Cooperative Medical System in rural China," Health Economics, John Wiley & Sons, Ltd., vol. 18(S2), pages 119-127, July.
  • Handle: RePEc:wly:hlthec:v:18:y:2009:i:s2:p:s119-s127
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    File URL: http://hdl.handle.net/10.1002/hec.1510
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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. Winnie Yip & Adam Wagstaff & William C. Hsiao, 2009. "Economic analysis of China's health care system: turning a new page," Health Economics, John Wiley & Sons, Ltd., vol. 18(S2), pages 3-6, July.
    3. Chen, Yuyu & Jin, Ginger Zhe, 2012. "Does health insurance coverage lead to better health and educational outcomes? Evidence from rural China," Journal of Health Economics, Elsevier, vol. 31(1), pages 1-14.
    4. 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.
    5. 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.
    6. Cheung, Diana & Padieu, Ysaline, 2015. "Heterogeneity of the Effects of Health Insurance on Household Savings: Evidence from Rural China," World Development, Elsevier, vol. 66(C), pages 84-103.
    7. 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.
    8. Ligane Séne & Momath Cissé, 2015. "Catastrophic out-of-pocket payments for health and poverty nexus: evidence from Senegal," International Journal of Health Economics and Management, Springer, vol. 15(3), pages 307-328, September.
    9. Yeatts, Dale E. & Pei, Xiaomei & Cready, Cynthia M. & Shen, Yuying & Luo, Hao & Tan, Junxin, 2013. "Village characteristics and health of rural Chinese older adults: Examining the CHARLS Pilot Study of a rich and poor province," Social Science & Medicine, Elsevier, vol. 98(C), pages 71-78.
    10. Xiangping Jia & Franz Heidhues & Manfred Zeller, 2010. "Credit rationing of rural households in China," Agricultural Finance Review, Emerald Group Publishing, vol. 70(1), pages 37-54, May.
    11. Jens Hougaard & Lars Østerdal & Yi Yu, 2011. "The Chinese healthcare system," Applied Health Economics and Health Policy, Springer, vol. 9(1), pages 1-13, January.
    12. Das Gupta, Monica & Ebenstein, Avraham & Sharygin, Ethan Jennings, 2010. "China's marriage market and upcoming challenges for elderly men," Policy Research Working Paper Series 5351, The World Bank.

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