Health care financing in China : equity in transition

Abstract

The aim of the thesis is 1) to assess equity in the provision, financing and utilization of health services in the study counties, after the launching of the Chinese health reform, in relation to income and health status, 2) to assess equity in utilization, financial barriers to care and poverty impact and the association of financial variables; alternative health insurance systerns and out-of-pocket financing and the association of non-financial variables; gender, age, education, occupation and geographical distance to health facilities.

The data collection was carried out from 1993 to 1996. Retrospective, cross-sectional and panel data were collected in an expenditure review, a household survey (n=5756) and a provider survey (n=1064). The health expenditure review was designed as a natural experiment with 'twin' counties, one insurance-based and one out-of-pocket funded. The data sources were health accounts and interviews with officials in two of the counties. The household and provider surveys were based on multi-stage sampling. The provider survey involved health staff at county hospitals, township hospitals and village health stations and included curative, preventative and traditional medicine. Triangulation of methods and perspectives improved validity. The analysis was based on quantitative methods, including multivariate analysis.

The study has shown that after the launching of the Chinese health reform (around 1985), the mix of health services shifted to less preventative and more curative services and a higher proportion of tertiary curative services. This was more pronounced in the insurance-based county. The majority of clinical doctors confirmed moral hazard by admitting that they alter prescriptions with consideration to the patients' financial status. A high level of inequity in illness, health care utilization, financing and financial difficulties was observed. Inequity in utilization was related to income, health insurance coverage and age. Registration at birth is a precondition for equal access. A gender bias was found in the high number of unregistered girls in five of the six counties, actual number of girls under 18 years at home exceeded the number reported in pregnancy histories by 22%. The elderly (8. 1% of the population) utilized a disproportionally small share (4%) of inpatient services. The ratio of negative pregnancy outcomes (miscarriage or still birth) increased by 170% from 1985-89 to 1990-95, while utilization of hospital delivery and qualified delivery supervision decreased. More than 90% of CMS (Cooperative Medical System) participants had qualified delivery supervision. The risk of adverse outcomes was 4.5 times higher for out-of-pocket paying mothers than for mothers with health insurance. CMS was associated with better health, three times less risk of illness with a duration of at least one month, five times less risk of financial difficulties and half the risk of care-induced debt. Other health insurance systerns were associated with higher costs, without reducing barriers to care or improving health.

It is suggested that equity has ethical, political and fiscal aspects. The decreasing share of public financing of health services signals a need to involve the Ministry of Finance in discussions how to ensure adequate levels of public funding for rural health care. Professional norms and ethics need to be revived with the objective of creating a health system with quality-oriented incentives and improved equity.