An analysis of inequities and inefficiencies in health and healthcare in China

Yang, Wei (2013) An analysis of inequities and inefficiencies in health and healthcare in China. PhD thesis, London School of Economics and Political Science.

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Abstract

China’s remarkable economic growth heralds substantial improvements in population health for the Chinese people. While economic growth in some respects acts as a positive stimulus to the health sector, it also brings challenges to the health system, in particular, a widening inequity in healthcare across the social spectrum, rising healthcare costs and low efficiency in health provision. The overarching aim of the thesis is to investigate whether inequities and inefficiencies exist in China’s healthcare system. It then seeks to understand, whether and to what extent a newly developed social health insurance scheme—the New Rural Cooperative Medical Scheme (NCMS)—responses to issues of inequities and inefficiencies in China’s healthcare system. This thesis uses a variety of analytical tools, such as the Concentration Index, Decomposition Analysis, Two-part Regression Analysis and Differences-in-Differences analysis. Data from a longitudinal individual level survey—the China Health and Nutrition Survey of 2004, 2006 and 2009—are used. The findings of this thesis suggest that inequalities in health and health care in China are ubiquitous and favouring better-off socioeconomic groups. Health status for the urban poor is surprisingly worse than their rural counterparts; more than two-thirds of the inequalities for the rural population are driven by socioeconomic factors. In rural areas, the NCMS was introduced to improve equity in access to healthcare and financial protection to rural farmers in 2003. This thesis finds that, even though the coverage of the NCMS reached more than 97% in 2009, the poor were still less likely to use formal care, such as preventive care, and were more likely to use folk doctor care compared with the rich. They may also have difficulty in meeting the costs of care that they need, and have to pay a substantial fraction of their incomes on healthcare. This thesis also finds that the NCMS may exacerbate the problem of inefficiency in healthcare provision because the scheme may lead to cost escalation in healthcare. Outpatient treatments for the NCMS participants incur significantly higher pre-reimbursement per episode costs than those for the uninsured. This pre-reimbursement inflation in costs is most noticeably observed at village clinics and township health centres—the backbone of the health system for poor rural farmers—than at county and municipal hospitals. This thesis urges policy makers to explore ways to improve equitable access and control supplier-induced demand in health care in China. In terms of the NCMS, it is important to improve the benefit package for both outpatient and inpatient care, and to offer additional benefits for the poor households. The government should also reform provider payment mechanism, regulate provider behavior, as well as implement other measures to prevent over prescribe of medicines and over supply of healthcare.

Item Type:	Thesis (PhD)
Additional Information:	© 2014 Wei Yang
Library of Congress subject classification:	H Social Sciences > HV Social pathology. Social and public welfare. Criminology J Political Science > JQ Political institutions Asia R Medicine > RA Public aspects of medicine > RA0421 Public health. Hygiene. Preventive Medicine
Sets:	Departments > Social Policy
Supervisor:	Kanavos, Panos
URI:	http://etheses.lse.ac.uk/id/eprint/893

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