Does health insurance reduce out-of-pocket expenditure? Heterogeneity among China's middle-aged and elderly

Zhang, A. , Nikoloski, Z. and Mossialos, E. (2017) Does health insurance reduce out-of-pocket expenditure? Heterogeneity among China's middle-aged and elderly. Social Science and Medicine, 190, pp. 11-19. (doi: 10.1016/j.socscimed.2017.08.005) (PMID:28823943)

Abstract

China's recent healthcare reforms aim to provide fair and affordable health services for its huge population. In this paper, we investigate the association between China's health insurance and out-of-pocket (OOP) healthcare expenditure. We further explore the heterogeneity in this association. Using data of 32,387 middle-aged and elderly individuals drawn from the 2011 and 2013 waves of China Health and Retirement Longitudinal Study (CHARLS), we report five findings. First, having health insurance increases the likelihood of utilizing healthcare and reduces inpatient OOP expenditure. Second, healthcare benefits are distributed unevenly: while low- and medium-income individuals are the main beneficiaries with reduced OOP expenditure, those faced with very high medical bills are still at risk, owing to limited and shallow coverage in certain aspects. Third, rural migrants hardly benefit from having health insurance, suggesting that institutional barriers are still in place. Fourth, health insurance does not increase patient visits to primary care facilities; hospitals are still the main provider of healthcare. Nonetheless, there is some evidence that patients shift from higher-tier to lower-tier hospitals. Last, OOP spending on pharmaceuticals is reduced for inpatient care but not for outpatient care, suggesting that people rely on inpatient care to obtain reimbursable drugs, putting further pressure on the already overcrowded hospitals. Our findings suggest that China's health insurance system has been effective in boosting healthcare utilization and lowering OOP hospitalization expenditure, but there still remain challenges due to the less generous rural scheme, shallow outpatient care coverage, lack of insurance portability, and an underdeveloped primary healthcare system.

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Zhang, Dr Anwen
• Authors: Zhang, A., Nikoloski, Z., and Mossialos, E.
• College/School: College of Social Sciences > Adam Smith Business School > Economics
• Journal Name: Social Science and Medicine
• Publisher: Elsevier
• ISSN: 0277-9536
• ISSN (Online): 1873-5347
• Published Online: 11 August 2017
• Copyright Holders: Copyright © 2017 Elsevier Ltd.
• First Published: First published in Social Science and Medicine 190: 11-19
• Publisher Policy: Reproduced in accordance with the publisher copyright policy