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Health Insurance in China

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Healthcare Reform in China

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Abstract

Health insurance in China is the topic of this chapter. Up until the economic reforms of the 1980s, communities (a village or a group of villages) were managing the social welfare of their inhabitants. The system was extremely decentralized. With the collapse of the community medical system, existing public establishments were either replaced by private ones, or put into competition with them. As a result, the healthcare access system was no longer free of charge and became unaffordable to many. During the period of absence of a centralized public insurance system, this lack of access to treatment became a major problem; at first for the most vulnerable part of the population, and gradually for a greater and greater proportion of rural dwellers. As the question of healthcare costs causing widespread poverty became a pressing issue, different public health insurance programmes were implemented. Today, geographical inequity is still observed for these programmes. There is variability not only in terms of funding eligibility, types of illness or services to be covered, but also in terms of levels of benefits and payments methods. Concerning the private health insurance market, it was next to nothing in the early 2000s. Today, the rise of private health insurance schemes is supported by the Chinese government and is finding an audience among the emerging upper middle class.

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Notes

  1. 1.

    D. Blumenthal and W.N. Hsiao, “Privatization and its Discontents—The Evolving Chinese Healthcare System,” The New England Journal of Medicine, Vol. 353, No. 22, 2005, pp. 1165–1170.

  2. 2.

    Government insurance system. See further in this section.

  3. 3.

    Centre for Health Statistics and Information, 2004.

  4. 4.

    H. Wang, M. Gusmano, and Q. Cao, “An Evaluation of the Policy on Community Health Organisations in China: Will the Priority of New Healthcare Reform in China be a Success?” Health Policy, Vol. 99, No. 1, 2011, pp. 37–43.

  5. 5.

    The central government has considerably relaxed the residence permit system in order to encourage economic growth.

  6. 6.

    Therese Hesketh and Wei Xingzhu, “Health in China: From Mao to Market Reform,” The British Medical Journal, No. 314, 1997, pp. 1543–1545.

  7. 7.

    Winnie Yip and William C. Hsiao, “What Drove the Cycles of Chinese Health System Reforms?” Health Systems & Reform, Vol. 1, No. 1, 2015, pp. 52–61.

  8. 8.

    Xingzhu Liu and Junle Wang, “An Introduction to China’s Health Care System,” Journal of Public Health Policy, Vol. 12, No. 1, 1991, pp. 104–116.

  9. 9.

    This sanji zhi system is often translated as “County-township-village Three-tier Healthcare System”.

  10. 10.

    See Chap. 2 for more details.

  11. 11.

    John S. Akin, William H. Dow, Peter M. Lance, and Chung-Ping A. Loh, “Changes in Access to Health Care in China, 1989–1997,” art. cit.

  12. 12.

    Chinese Ministry of Health , Research Report on China National Health Accounts, Beijing, 2004; Winnie Yip and William C. Hsiao, “The Chinese Health System at a Crossroads,” Health Affairs, Vol. 27, No. 2, 2008, pp. 460–468. See the section on how the establishments were funded for further details.

  13. 13.

    Profit maximization under the nil profit constraint.

  14. 14.

    See Chapter 3, end of page 39

  15. 15.

    Liu Yuanli and Keqin Rao, “Providing Health Insurance in Rural China: From Research to Policy,” Journal of Health Politics, Policy and Law, Vol. 1, 2006, pp. 71–92.

  16. 16.

    S.L. Barber and L. Yao, “Development and Status of Health Insurance Systems in China,” The International Journal of Health Planning and Management, 2011.

  17. 17.

    Carine Milcent, “Healthcare-seeking Behaviour Changes in Rural China: The Situation of Farmers,” Working Paper, PSE No. 201423, 2015; Gerald Bloom and Gu Xingyuan, “Health Sector Reform: Lessons from China,” Social Science and Medicine, Vol. 45, No. 3, 1997, pp. 351–360; Therese Hesketh and Weixing Zhu, “Health in China: The Healthcare Market,” The British Medical Journal, No. 314, 1997, pp. 1616–1618; Jun Gao, Shenglan Tang, Rachel Tolhurst, and Keqing Rao, “Changing Access to Health Services in Urban China: Implications for Equity,” Health Policy and Planning, Vol. 16, No. 3, 2001, pp. 302–312.

  18. 18.

    The programme will also be offered in urban districts and county-level cities that include rural residents.

  19. 19.

    S.L. Barber and L. Yao, “Development and Status of Health Insurance Systems in China,” The International Journal of Health Planning and Management, 2011.

  20. 20.

    MoHRSS, 2013.

  21. 21.

    In rural areas, the public health insurance scheme mentioned here is known as the NCMS, or New Co-operative Medical Scheme.

  22. 22.

    Here, we are referring to the period after the NCMS was introduced in the country.

  23. 23.

    Joe C.B. Leung and Yuebin Xu, China’s Social Welfare: The Third Turning Point, ed. China Today, 2015.

  24. 24.

    China has 34 provincial-level administrative units: 23 provinces, four municipalities (Beijing, Tianjin, Shanghai, Chongqing), five autonomous regions (Guangxi, Inner Mongolia, Tibet, Ningxia, Xinjiang); and two special administrative regions (Hong Kong, Macau).

  25. 25.

    Y.B. Xu and X.M. Song, A Study on the Design and Implementation of the Rural Medical Assistance Program in China: Consultation Report to the Ministry of Health, unpublished, 2006.

  26. 26.

    Y.B. Xu and X.L. Zhang, “Rural Social Protection in China: Reform, Performance and Challenges,” In J. Midgley and K.L. Tangs (eds.), Social Policy and Poverty in East Asia: The Role of Social Security, London: Routledge, pp. 116–127, 2010.

  27. 27.

    Ministry of Civil Affairs, 2012 Annual Statistical Report on Social Service Development, 2012.

  28. 28.

    Q. Meng and S. Tang, Universal Health Care Coverage in China: Challenges and Opportunities, Procedia—Social and Behavioral Sciences, Vol. 77, pp. 330–340.

  29. 29.

    J. Pan and D. Shallcross, “Geographic Distribution of Hospital Beds Throughout China: A County-level Econometric Analysis,” International Journal for Equity in Health, Vol. 15, 2016.

  30. 30.

    M. Stabile and S. Thomson, “The Changing Role of Government in Financing Health Care: An International Perspective,” Journal of Economic Literature, Vol. 52, No. 2, 2014.

  31. 31.

    Excluding pilot programmes.

  32. 32.

    The non-portability of rights is partially due to the decentralized level of the public healthcare system implemented.

  33. 33.

    H. Wang, “A Dilemma of Chinese Healthcare Reform: How to Re-define Government Roles?” China Economic Review, Vol. 20, No. 4, 2009, pp. 598–604.

  34. 34.

    C. Dong and Y. Song, Impacts of Different Insurance Schemes on Non-communicable Diseases Services Utilization, Beijing: World Bank, 2009.

  35. 35.

    H. Wang, “A Dilemma of Chinese Healthcare Reform: How to Re-define Government Roles?” China Economic Review, Vol. 20, No. 4, 2009, pp. 598–604.

  36. 36.

    H. Liu, S. Gao, and J.A. Rizzo, “The Expansion of Public Health Insurance and the Demand for Private Health Insurance in Rural China,” China Economic Review, Vol. 22, No. 1, 2011, pp. 28–41.

  37. 37.

    H. Wang, M.K. Gusmano, and Q. Cao, “An Evaluation of the Policy on Community Health Organizations in China: Will the Priority of New Healthcare Reform in China be a Success?” Health Policy, Vol. 99, No. 1, 2011, pp. 37–43.

  38. 38.

    A. Wagstaff and S. Yu, “Do Health Sector Reforms have their Intended Impacts? The World Bank’s Health VIII Project in Gansu Province, China,” Journal of Health Economics, Vol. 26, No. 3, 2007, pp. 505–535.

  39. 39.

    Carine Milcent and Binzhen Wu, “How Do You Feel? The Effect of the New Cooperative Medical Scheme in China,” The Journal of Development Studies, Vol. 51, No. 12, 2015.

  40. 40.

    Pour plus de détails, il faut se référer aux modèles d’assurance. L’un des premiers modèles sur la sélection adverse est le modèle d’Akerlof. G. Akerlof, “The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism,” The Quarterly Journal of Economics, Vol. 84, No. 3, 1970.

  41. 41.

    T. McGuire, “Physician Agency,” In A.J. Culyer and J.P. Newhouse (eds.), The Handbook of Health Economics, Vol. 1, pp. 462–536, Amsterdam: Elsevier, 2000.

  42. 42.

    M. Feldstein, “The Rising Price of Physicians’ Service,” Review of Economics and Statistics, Vol. 52, 1970, pp. 121–133.

  43. 43.

    W. Chiu, “Health Insurance and the Welfare of Healthcare Consumers,” Journal of Public Economics, Vol. 64, No. 1, 1997, pp. 125–133.

  44. 44.

    Ibid.

  45. 45.

    H. Hong Liu and Z. Zhong Zhao, “Does Health Insurance Matter? Evidence from China’s Urban Resident Basic Medical Insurance ,” Journal of Comparative Economics, Vol. 42, No. 4, 2014, pp. 1007–1020.

  46. 46.

    K.S. Babiarz, G. Miller, H. Yi, L. Zhang, and S. Rozelle, “New Evidence on the Impact of China’s New Rural Cooperative Medical Scheme and its Implications for Rural Primary Healthcare: Multivariate difference-in-difference Analysis,” British Medical Journal, 2010, pp. 341–350.

  47. 47.

    H. Wang, “Impacts of Medicine Price on New Cooperative Medical Scheme,” China Price, Vol. 11, 2005, pp. 23–24 (in Chinese).

  48. 48.

    Shyama Kuruvilla, Julian Schweitzer, David Bishai, Sadia Chowdhury, Daniele Caramani, Laura Frost, Rafael Cortez, Bernadette Daelmans, Andres de Francisco, Taghreed Adam, Robert Cohen, Y. Natalia Alfonso, Jennifer Franz-Vasdeki, Seemeen Saadat, Beth Anne Pratt, Beatrice Eugster, Sarah Bandali, Pritha Venkatachalam, Rachael Hinton, John Murray, Sharon Arscott-Mills, Henrik Axelson, Blerta Maliqi, Intissar Sarker, Rama Lakshminarayanan, Troy Jacobs, Susan Jacks, Elizabeth Mason, Abdul Ghaffar, Nicholas Mays, Carole Presern, and Flavia Bustreo, “Success Factors for Women’s and Children’s Health Study Groups,” Bulletin of World Health Organisation, Vol. 92, No. 7, 2014, pp. 533–544. www.who.int/pmnch/successfactors/en. Accessed 31 October 2016. The source data are drawn from the China Health Statistics Yearbook.

  49. 49.

    China Health Statistical Yearbook, 2012.

  50. 50.

    World Health Organization (see http://apps.who.int//nha/database) http://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/healthcare%20systems%20and%20services/health%20international/hi10_china_healthcare_reform.ashx. Accessed September 2017.

  51. 51.

    Carine Milcent and Binzhen Wu “How Do You Feel? The Effect of the New Cooperative Medical Scheme in China,” The Journal of Development Studies, Vol. 51, No. 12, 2015, pp. 1585–1602.

  52. 52.

    A. Wagstaff, M. Lindelow, J. Gao, L. Xu, and J. Qian, “Extending Health Insurance to the Rural Population: An Impact Evaluation of China’s New Cooperative Medical Scheme,” Journal of Health Economics, Vol. 28, 2009, pp. 1–19.

  53. 53.

    X. Lei and S. Lin, “The New Cooperative Medical Scheme in Rural China: Does More Coverage Mean More Service and Better Health?” Health Economics, Vol. 18, 2009, pp. 25–46.

  54. 54.

    H. Hong Liu and Z. Zhong Zhao, “Does Health Insurance Matter? Evidence from China’s Urban Resident Basic Medical Insurance ,” Journal of Comparative Economics, Vol. 42, No. 4, 2014, pp. 1007–1020.

  55. 55.

    B. Koszegi, “Emotional Agency,” The Quarterly Journal of Economics, Vol. 121, No. 1, 2006, pp. 121–155.

  56. 56.

    C. Milcent and B. Wu, “How Do You Feel? The Effect of the New Cooperative Medical Scheme in China,” Journal of Development Studies, Vol. 51, No. 12, 2015, pp. 1585–1602.

  57. 57.

    China Yearbook, PwC Analysis 2015, www.pwccn.com. Accessed May 2016.

  58. 58.

    China Insurance Regulatory Commission, 2014.

  59. 59.

    S.L. Barber and L. Yao, Health Insurance Systems in China: A Briefing Note, World Health Report (2010), Background Paper 37, Geneva, Switzerland: World Health Organization, 2010.

  60. 60.

    China Insurance, Yearbook, 2010.

  61. 61.

    China Insurance, Yearbook 2014.

  62. 62.

    Ng Alexander and Süssmuth Dyckerhoff Claudia, “Private Health Insurance in China: Finding the Winning Formula,” Health International is published by McKinsey’s Healthcare Systems and McKinsey & Company, 2012.

    Results from the 2012 McKinsey Patient & Physician Survey among more than 1000 upper-middle-class consumers (yearly income greater than RMB 80,000).

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    Carine Milcent

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Milcent, C. (2018). Health Insurance in China. In: Healthcare Reform in China. Palgrave Pivot, Cham. https://doi.org/10.1007/978-3-319-69736-9_6

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