The Impact of Health Insurance in Rural China: Evidence from the New Cooperative Medical Scheme

Posted: 15 Jun 2007

See all articles by Adam Wagstaff

Adam Wagstaff

World Bank - Development Research Group (DECRG)

Magnus Lindelow

World Bank

Jun Gao

Ministry of Health, Beijing-Center for Health Statistics and Information

Ling Xu

Ministry of Health, Beijing-Center for Health Statistics and Information

Qian Juncheng

Ministry of Health, Beijing-Center for Health Statistics and Information

Date Written: June 2007

Abstract

China's old rural Cooperative Medical Scheme (CMS) all but collapsed following the economic reforms of the early 1980s. In an effort to reduce financial risk and make health care more affordable, the Government of China recently began piloting of a new voluntary health insurance scheme for rural areas, commonly referred to as the New Cooperative Medical Scheme (NCMS). Using panel data from both households and providers, this paper provides an early assessment of the impact of the NCMS on medical expenditures, prevalence of catastrophic health care expenditures, use of health services, and facility revenues and activities. It shows NCMS enrollment is influenced by income level, health status, and other observable characteristics. Controlling for selection bias using differences-in-differences and matching methods, the paper finds that the scheme has increased utilization of health services. However, it has not reduced out-of-pocket spending or the risk of catastrophic health expenditures. The household level evidence is consistent with findings of increased service volumes and revenues at facility level.

Suggested Citation

Wagstaff, Adam and Lindelow, Magnus and Gao, Jun and Xu, Ling and Juncheng, Qian, The Impact of Health Insurance in Rural China: Evidence from the New Cooperative Medical Scheme (June 2007). iHEA 2007 6th World Congress: Explorations in Health Economics Paper. Available at SSRN: https://ssrn.com/abstract=993365

Adam Wagstaff

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/awagstaff

Magnus Lindelow

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Jun Gao

Ministry of Health, Beijing-Center for Health Statistics and Information ( email )

Beijing
China

Ling Xu

Ministry of Health, Beijing-Center for Health Statistics and Information ( email )

Beijing
China

Qian Juncheng

Ministry of Health, Beijing-Center for Health Statistics and Information ( email )

Beijing
China

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