How effectively can the New Cooperative Medical Scheme in China reduce catastrophic health expenditure among the poor and non-poor?

Presenter: Luying Zhang, Fudan University

Abstract

Backgrounds: Before 2003, as nearly 80% of rural residents in China were not covered by any form of health insurance, large healthcare expenditure has impoverished many households. The Chinese government has implemented the New Cooperative Medical Scheme (NCMS) in rural areas since 2003, aiming to reduce rural residents’ economic burden of disease and relieve impoverishment through protection against catastrophic health expenditure (CHE).
Objectives: Since there are few empirical studies on the protection against CHE in NCMS and little evidence examining the equity between the poor and non-poor, this paper explores the effect of the NCMS on relieving patients’ CHE due to out-of-pocket health spending and evaluates which group, poor or non-poor benefits more from the NCMS reimbursement.
Methodology: The main data source is questionnaire survey in three Health VIII Support Project counties, Qianjiang, Yuexi and Datong. NCMS enrollees who hospitalized and obtained reimbursement in 2005 were randomly selected to answer questionnaires, 358 poor and 523 non-poor. Information concerning socio-economic status, hospitalization expenditure, reimbursement from NCMS and other sources was collected by questionnaire. In this research, CHE is defined as annual health expenditure greater than 10% of annual household expenditure according to the most common definition. Out-of-pocket payment for hospitalization is considered as health spending to calculate CHE. Two indicators, head count and overshoot are employed to measure incidence and intensity of CHE among poor and non-poor enrollees.
Results: Results revealed that before NCMS reimbursement, generally 85.5% of poor inpatients’ families and 65.3% of non-poor suffered CHE due to hospitalization in sampling counties and among those families who faced CHE, out-of-pocket hospitalization expenditure accounted for 44.8% of annual household expenditure in poor and 27.9% in non-poor, which meant occurrence and intensity of CHE was greater among poor inpatients. NCMS reimbursement had impact on reducing occurrence rate (3.6-29.2%) and intensity (8.2-11.1%) of CHE. Poor inpatients benefited more from NCMS than non-poor, whilst this effect was only substantial in lowering occurrence in Qianjiang county and reducing intensity in Datong county. Mentionably, more than half of patients’ families were still confronted with CHE after NCMS reimbursed in two counties. In addition, other reimbursement besides NCMS also helped relieve inpatients’ economic burden, which was dramatically represented in Datong.
Conclusions: NCMS is able to protect its members against CHE, but is only to a limited extent. Poor inpatients can acquire more protection than non-poor from NCMS. To further enhance the effect of NCMS, it is suggested that NCMS administrator should pay more attention to cost containment from supply side, re-design NCMS policy to increase reimbursement rate and continue seeking subsidies from other sources.