Correlation between New Cooperative Medical Scheme Policy Design and Catastrophic Medical Payment: Evidence from 25 Counties in Rural China

Abstract

Few studies have examined the association between the New Cooperative Medical Scheme (NCMS) policy design and its achievement of providing financial protection to rural residents. This study collected data on NCMS policy design and health care spending from 25 counties and rural households in their catchment areas. It shows that on average, NCMS has a growing but small effect on the reduction of catastrophic medical payment (CMP) incidence. If outpatient spending can be reimbursed from an NCMS pooled account, the incidence of CMP before a reimbursement and that after a reimbursement will be reduced. Higher nominal reimbursement rate for inpatient spending at provincial hospitals is correlated with higher incidence of CMP before a reimbursement. Higher ceiling for annual reimbursement from NCMS is associated with lower incidence of CMP after a reimbursement. Thus, NCMS policy design can be improved to strengthen its effects on the reduction of CMP incidence.

Keywords: catastrophic medical payments, New Cooperative Medical Scheme, policy design, rural China, variation