This paper explores the impact of the New Cooperative Medical Scheme (NCMS), a newly adopted public health insurance program in rural China. Using a longitudinal sample drawn from the China Health and Nutrition Survey (CHNS), we employed multiple estimation strategies (individual fixed-effect models, instrumental variable estimation, and difference-in-differences estimation with propensity score matching) to correct the potential selection bias. We find that participating in the NCMS significantly decreases the use of traditional Chinese folk doctors and increases the utilization of preventive care, particularly general physical examinations. However, we do not find that the NCMS decreases out-of-pocket expenditure nor do we find that it increases utilization of formal medical service or improves health status, as measured by self-reported health status and by sickness or injury in the past four weeks. Our study indicates that despite the wide expansion of coverage, the impact of the NCMS is still limited.

As the latest government effort to reform China's health care system, Urban Resident Basic Medical Insurance (URBMI) was piloted in seventy-nine cities during the summer of 2007, following State Council Policy Document 2007 No. 20's guidelines. This study presents the first economic analysis of URBMI, following a national household survey in nine representative Chinese cities. The survey aimed to answer three questions: Who is covered by the plan? Who gains from the plan? Who is most satisfied with the plan? We have found that there is a U-shaped relationship between URBMI participation rate and income. That is, the extremely rich or poor are the most likely to participate. Those with any inpatient treatment last year or with any chronic disease are also more likely to enroll in URBMI, indicating adverse selection into participation. We have also found that in reducing financial barriers to care, URBMI most significantly benefits the poor and those with previous inpatient care. Finally, those participants in the bottom 20% of family incomes are happier with URBMI than are their more affluent counterparts.

China has high rates of antibiotic abuse and antibiotic resistance but the causes are still a matter for debate. Strong physician financial incentives to prescribe are likely to be an important cause. However, patient demand (or physician beliefs about patient demand) is often cited and may also play a role. We use an audit study to examine the effect of removing financial incentives, and to try to separate out the effects of patient demand. We implement a number of different experimental treatments designed to try to rule out other possible explanations for our findings. Together, our results suggest that financial incentives are the main driver of antibiotic abuse in China, at least in the young and healthy population we draw on in our study.

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We ask how patient knowledge of appropriate antibiotic usage affects both physicians prescribing behavior and the physician-patient relationship. We conduct an audit study in which a pair of simulated patients with identical flu-like complaints visits the same physician. Simulated patient A is instructed to ask a question that showcases his/her knowledge of appropriate antibiotic use, whereas patient B is instructed to say nothing beyond describing his/her symptoms. We find that a patient's knowledge of appropriate antibiotics use reduces both antibiotic prescription rates and drug expenditures. Such knowledge also increases physicians' information provision about possible side effects, but has a negative impact on the quality of the physician-patient interactions.