China's Health Care Expenditure/Revenue Analysis and Forecast using Macro-Econometric Model: correspondence of statistics and transition of policy

Presenter: Masayo Sato, Kansai University

Abstract

“How fast is health care spending increasing in China?” is one of the biggest concerns for China. The Chinese government made the health care reformation idea public on October 14, 2008. However, long-term fiscal resources were not clearly referred in it. (There was a vague expression of allotting the health care the revenue increase of finance.) Because it was declared to make medicare that covers the 'whole nation' in China by 2020, it is necessary to construct financially sustainable health care system considering the progress in ageing and the stall of economic growth.

This research establishes a macro-econometric model adapted to the Chinese economy, and by using the model, provides a simulation analysis of budget revenue/expenditure forecast and public health care policy. The paper is characterized by the emphasis not only the result of forecast and simulation but also on establishing the model's robustness and the statistics' accuracy by giving verification such as the comparison of estimated value and result data.

The verification result confirms that our model is capable of measuring the movement of the Chinese GDP and health care expenditure within the margin of error. It can be said that the paper has successfully designed a basic model applicable to the future Chinese macro-economy and the forecast of fiscal health expenditure and revenue, and also to policy simulation.

Objectives:
The objectives of this research are to provide basic information about where financing for China’s health care comes from, what it purchases, and to estimate future spending levels and trends.
- to supplement the lack of the close examination of statistics, such as non-continuousness of time-series data and population forecasting
- to construct the model of possible practical use. And
- to forecast the health and financial expenditure and revenueof China by using this model.

Results – model evaluation and Forecast -:
- Tables and figures are omitted for want of space.

Conclusion:
- Our model can predict economic activities in the short-run and partially show the convergence in the long-run.
- The forecasting results from the model is acceptable, so it can be used to evaluate policy impacts.
- The model should be expand and improve for a more accurate and comprehensive forecast and simulation. Big troubles for that are few of the statistics that can be used, and lacks of those continuance. Therefore, it is necessary to construct and maintain the data base simultaneously with the model construction.

Next step:
- The model is constructed in a way that it is difficult to indicate influence on the supply side derived from policy changes, since the model is a macro-model that has an emphasis on total demand. When considering the fact that a Public Health Care (Insurance) System reform is a crucial policy issue for future China, it is important to examine the improvement of the model, so that it could indicate the influence on the supply side.