BackgroundMany countries are developing health financing mechanisms to pursue the goal of universal coverage. In China, a rural health insurance system entitled New Cooperative Medical Scheme (NCMS) is being developed since 2003. Although there is concern about whether the NCMS will influence the serious situation of inequity in health service utilization in rural China, there is only limited evidence available. This paper aims to assess the utilisation of outpatient and inpatient services among different income groups and provinces under NCMS in rural China.MethodsUsing multistage sampling processes, a cross-sectional household survey including 6,147 rural households and 22,636 individuals, was conducted in six counties in Shandong and Ningxia Provinces, China. Chi-square test, Poisson regression and log-linear regression were applied to analyze the association between NCMS and the utilization of outpatient and inpatient services and the length of stay for inpatients. Qualitative methods including individual interview and focus group discussion were applied to explain and complement the findings from the household survey.ResultsNCMS coverage was 95.9% in Shandong and 88.0% in Ningxia in 2006. NCMS membership had no significant association with outpatient service utilization regardless of income level and location.Inpatient service utilization has increased for the high income group under NCMS, but for the middle and low income, the change was not significant. Compared with non-members, NCMS members from Ningxia used inpatient services more frequently, while members from Shandong had a longer stay in hospital.High medical expenditure, low reimbursement rate and difference in NCMS policy design between regions were identified as the main reasons for the differences in health service utilization.ConclusionsOutpatient service utilization has not significantly changed under NCMS. Although utilization of inpatient service in general has increased under NCMS, people with high income tend to benefit more than the low income group. While providing financial protection against catastrophic medical expenditure is the principal focus of NCMS, this study recommends that outpatient services should be incorporated in future NCMS policy development. NCMS policy should also be more equity oriented to achieve its policy goal.

Decentralization is a highly popular concept, being a key element of Primary Health Care policies. There are, however, certain negative implications of decentralization that must be taken into account. These are analyzed in this article with particular reference to developing countries. The authors criticize the tendency for decentralization to be associated with state limitations, and discuss the dilemma of relating decentralization, which is the enhancement of the different, to equity, which is the promotion of equivalence. Those situations in which decentralization can strengthen political domination are described. The authors conclude by setting out a checklist of warning questions and issues to be taken into account to ensure that decentralization genuinely facilitates the Primary Health Care orientation of health policy.

Background: In 1997 there was a major reform of the government run urban health insurance system in China. The principal aims of the reform were to widen coverage of health insurance for the urban employed and contain medical costs. Following this reform there has been a transition from the dual system of the Government Insurance Scheme (GIS) and Labour Insurance Scheme (LIS) to the new Urban Employee Basic Health Insurance Scheme (BHIS).

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